Online advertising is paid promotion delivered through internet-connected media, such as search results, websites, apps, social networks and streaming services. The advertiser pays to place a message before an audience.
The message might promote a product, a service, an organization or a cause. It can be designed to build awareness, prompt an inquiry or encourage a purchase. An immediate sale is not the only possible objective.
How is advertising different from online marketing?
Online marketing is the broader activity. It can include paid advertisements, a company’s own website, search engine optimization, email campaigns and unpaid social media posts. Advertising describes the paid promotional element.
A bakery paying for a sponsored search result is advertising. The same bakery publishing an unpaid recipe on its own website is conducting online marketing without buying that placement. Both activities can serve short-term or long-term goals.
OpenStax places advertising within the promotion mix, alongside other ways an organization communicates with customers. The distinction concerns the activity and arrangement, rather than simply how quickly results are expected.
What are the main online advertising formats?
Search ads can appear alongside search results. Display ads use images, text or other creative material on websites and apps. A banner is one display format.
Social media ads can appear in feeds, stories and other placements. Video ads can run before, during or after a video, or appear elsewhere in a feed. In-app advertising describes where an ad appears, so it can overlap with display and video formats.
Native advertising follows the style or format of the surrounding content. It can resemble an article, a recommended-content item or a social post. It is not restricted to a piece of writing.
The U.S. Federal Trade Commission explains that native ads must not mislead people about their commercial nature. Whether a particular disclosure is needed depends on the presentation, but an ad must not falsely appear to be independent editorial material.
Affiliate promotion uses a referral arrangement. An affiliate may earn a commission for a qualifying sale, lead or other agreed action. A click does not automatically earn a commission under every program.
How are ads selected and paid for?
A placement may be bought directly from a publisher or through an advertising platform. Some systems use auctions. Depending on the arrangement, charges can relate to impressions, clicks, video views or agreed actions.
Ads may be selected using the page’s subject, a search query, an approximate location or audience information. They are not always based on a person’s browsing history, and the same format can be delivered in different ways.
Measurement also has limits. Consent choices, browser restrictions, device changes and the platform’s methods can affect what is recorded. An advertiser does not automatically learn every page a viewer subsequently visits.
An example using impressions, clicks and purchases
Imagine a fictional campaign costing $100. Its ads record 10,000 impressions, 200 clicks and 10 purchases attributed to those clicks. For this simplified example, each converting click produces one counted purchase.
An impression is a recorded appearance of an ad. One person may generate several impressions. A click records an interaction, while a conversion is a specified action, such as a purchase or registration.
The click-through rate, or CTR, is clicks divided by impressions: 200 ÷ 10,000 × 100 = 2%. In this example, purchases divided by clicks give a 5% click-to-purchase rate.
Average cost per click is $100 ÷ 200 = $0.50, and advertising cost per attributed purchase is $100 ÷ 10 = $10. These are different measures. None alone tells us whether the campaign made a profit.
What does an attributed result tell us?
Attribution assigns credit to an advertisement or other contact under a chosen measurement rule and time window. A customer might see several messages before buying, and different rules can distribute credit differently.
An attributed purchase is therefore not, by itself, proof that the advertisement caused a purchase that would otherwise never have happened. Revenue, product costs, returns and other expenses are also needed to assess the commercial result.
Last checked and updated on November 3, 2026 by the MBN editorial team.