Practitioner · Lesson 2 of 5
Display and native formats explained
About 9 minutes · Yogender Kumar, Managing Partner
By the end of this lesson you'll be able to
- Explain the main display sizes and how native ads differ
- Match each format to the job it does best
- Compare formats by cost per sale rather than by CPM
Why this matters
Your DSP offers banners at £2.50 per thousand and native ads at £6. The banner looks like the bargain. Whether it is depends on what each format does once it's on screen.
The core idea
Display ads are the familiar boxes and strips around a page. Most inventory comes in a few standard sizes:
- 300 × 250, the medium rectangle, which fits almost anywhere, including mobile.
- 320 × 50, the mobile banner along the top or bottom of a screen.
- 728 × 90, the leaderboard across the top of a desktop page.
- 300 × 600, the half page, a large unit beside desktop articles.
Native ads match the look of the page around them: a headline, an image and a short line of text, placed in a feed or under an article. They're labelled as ads or sponsored content, but they read like part of the page.
Video runs before, during or between content, or inside articles, and is often priced per completed view.
Each format does a different job:
- Display is cheap reach. It works well for retargeting, reminding people who've already visited your site, which Track 5 covers.
- Native earns more attention for a new message, so it suits content and offers that need a few words to explain.
- Video tells a story, and usually works best when people can watch with the sound on.
Worked example
Brightwell Bikes is an imaginary UK bike shop selling electric bikes online, so the figures are illustrative. It tests two formats with the same audience and £3,000 each.
Display, at a £2.50 CPM:
- £3,000 buys 1,200,000 impressions.
- 0.1% are clicked: 1,200 clicks, at £2.50 each.
- 1% of visitors buy: 12 sales. Cost per sale £250.
Native, at a £6 CPM:
- £3,000 buys 500,000 impressions.
- 0.4% are clicked: 2,000 clicks, at £1.50 each.
- 0.8% of visitors buy: 16 sales. Cost per sale £187.50.
Native costs more than twice as much per thousand, but each sale costs 25% less. Its visitors buy slightly less often, because some are still researching. There are about two-thirds more of them, though, because the ad explains the offer before the click.
I'd keep both. Native finds new buyers. Display reminds people who've already visited, where it's at its best.
Brightwell Bikes: £3,000 on each format
In practice
- Supply the main standard sizes (these four are the most common), so your ads can run on most sites.
- Write native headlines like article titles, and match the landing page to the promise.
- Split results by format before deciding what works.
- Compare formats on cost per sale, with the same audience and budget.
- Refresh creative every few weeks, before people stop noticing it.
Common mistakes
- Comparing CPMs across formats. Native and video cost more per thousand by design. Compare cost per sale.
- One banner size only. It shuts you out of most placements. Supply the standard set.
- Native ads that oversell. A headline the landing page doesn't deliver wastes the click and hurts trust. Keep the promise exact.
Try it yourself
Display costs £3 per thousand, 0.12% of impressions are clicked and 1.5% of visitors buy. Native costs £7 per thousand, 0.35% are clicked and 1% buy. What's the cost per sale on each?
Show answer
Display: 1,000 impressions bring 1.2 clicks, so a click costs £3 ÷ 1.2 = £2.50. A sale costs £2.50 ÷ 0.015 = £166.67. Native: 1,000 impressions bring 3.5 clicks, so a click costs £7 ÷ 3.5 = £2. A sale costs £2 ÷ 0.01 = £200. This time display wins, by about £33 a sale.
Quick check
Not scored. Pick an answer to see the explanation.
What makes an ad native?
Which display size fits almost anywhere, including mobile?
Key takeaways
- Display is cheap reach, best for reminding people who know you.
- Native earns attention for a new message, at a higher CPM.
- Compare formats by cost per sale with the same audience and budget.
- Supply the standard display sizes so your ads can run widely.