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Online advertising

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Online advertising, often called digital or web advertising, is a marketing method that uses the internet to promote products and services.

Display advertising and programmatic advertising diagram - Diaz Ruiz 2025
Display advertising and programmatic advertising diagram - Diaz Ruiz 2025

This industry spans many digital platforms, including social media, search engines, email, and mobile applications. It serves as a vital way for businesses to reach specific audiences across the globe. Because it is so widespread, online advertising has become a massive economic force. It connects advertisers, who want to show their products, with publishers, who provide the digital space for those ads to appear.

Ad serving square
Ad serving square

The process of delivering an ad involves several specialized participants. An advertiser provides the content, while a publisher integrates that content into their website or app. Advertising agencies often help create the ad copy. An ad server acts as the technological engine that delivers the ad and tracks its performance statistics. Sometimes, advertising affiliates perform independent promotional work for the advertiser. In modern systems, much of this is handled through programmatic advertising. This is a method where software, rather than humans, automates the sale and delivery of ads.

Display advertising and programmatic advertising diagram - Diaz Ruiz 2025
Display advertising and programmatic advertising diagram - Diaz Ruiz 2025

Programmatic advertising relies on complex data to decide which ads to show. Ad servers often use cookies, which are unique identifiers for specific computers, to track user behavior. This allows for several specialized targeting methods. Behavioral targeting aggregates data from multiple websites to build a profile of a user's interests. Retargeting uses cookies to show ads to people who left a website without buying anything. Contextual advertising displays ads that are related to the specific content on a webpage. Advertisers also use geotargeting, which uses an IP address to guess a user's geographic location.

Wikimedia Donation Banners
Wikimedia Donation Banners

There are many distinct types of display advertising used today. Web banner advertising involves graphical ads, like traditional frame ads, placed on a webpage. Some banners use rich media, which includes interactive elements like video, audio, or buttons. Pop-up ads open in a new window above the visitor's current window, while pop-under ads open underneath it. Floating ads, or overlay ads, appear superimposed over the website content. Expanding ads change their size based on user actions, such as mouse movements. News Feed Ads, also called Sponsored Stories, are unique because they blend into the social media updates a user is already reading.

Made for Advertising (MFA) website
Made for Advertising (MFA) website

The history of online advertising began with strict rules. Early internet predecessors like ARPANET and NSFNet had policies that banned commercial activities by for-profit groups. The NSFNet began phasing out this ban in 1991. One of the first major examples of email marketing occurred on May 3, 1978, when Gary Thuerk sent an email to ARPANET users to advertise a DEC computer. By 1993, Global Network Navigator sold the first clickable web ad. In 1994, banner advertising became mainstream when HotWired sold ads to companies like AT&T. One early AT&T ad even achieved a 44% click-through rate by linking to an online art museum tour.

Economic data shows how quickly this field has grown. In 2016, internet advertising revenues in the United States surpassed those of cable and broadcast television. In 2017, US internet advertising revenues totaled $83.0 billion, which was a 14% increase from the $72.50 billion earned in 2016. By 2019, research estimated that US online advertising spending reached $125.2 billion. This amount was $54.8 billion higher than the $70.4 billion spent on television. This massive shift shows how much digital platforms have changed the way companies spend money.

1929- Advertising revenue as percent of GDP (US)
1929- Advertising revenue as percent of GDP (US)

Despite its success, online advertising faces many challenges and controversies. Many users find ads disruptive and use ad blocking software to avoid them. Some practices, like "trick banners" that imitate system messages to induce clicks, can deceive users. Because of these issues, many practices are increasingly subject to regulation. Additionally, declining ad revenue has forced some publishers to place their content behind paywalls. This creates a complex relationship between the people who create content and the companies that fund it through digital marketing.

Made for Advertising (MFA) website
Made for Advertising (MFA) website
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1929- Advertising revenue as percent of...
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Wikimedia Donation Banners.png
File:Display advertising and programmatic advertising diagram - Diaz Ruiz 2025.jpg
Display advertising and programmatic...
File:Ad serving square.svg
Ad serving square.svg
File:Made for Advertising (MFA) website.jpg
Made for Advertising (MFA) website.jpg
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