Display advertising
Visual ads - banners, rich media, video units - bought on websites and apps, historically the workhorse of programmatic. Cheap reach with famously low click rates; its defensible use is visibility and retargeting, not response.
Where it's used
Used for reach, retargeting and contextual placements. Good for keeping a brand visible cheaply. Judge it on viewability and incrementality, not on clicks.
How to calculate it
Spend = Impressions ÷ 1,000 × CPM
CTR = Clicks ÷ Impressions
Cost per click = Spend ÷ Clicks
Worked example
Illustrative numbersA sports brand buys 2,000,000 banner impressions at a $2 CPM and gets 1,000 clicks.
Spend
2,000,000 impressions ÷ 1,000 × $2 = $4,000
CTR
1,000 clicks ÷ 2,000,000 impressions = 0.05%
Cost per click
$4,000 ÷ 1,000 clicks = $4
What it tells you
Judged by clicks, this looks awful. But the same $4,000 bought 2 million cheap exposures, which is the actual reason to run it.