Digital advertising is the practice of promoting your products and services online through a range of ad formats and digital channels.
For True Classic Cofounder Ryan Bartlett, it’s delivered results.
“We rely so much on converting people on these platforms because it drives the business,” he says on an episode of the Shopify Masters podcast.
Ryan’s approach was to spend $25 to $50 per day on paid ads (initially, all on Facebook) to test concepts, fund more ad spend as revenue grew, and rapidly scale “winners.” It helped fuel its growth—in 2025, the brand reported that it was approaching $1 billion in revenue.
This guide covers what digital advertising is, its benefits and formats, common pricing models, and tips for using digital advertising effectively.
What is digital advertising?
Digital advertising is the practice of promoting your products or services via online advertising platforms as part of a larger marketing strategy. You can run digital ads on various channels, including social media platforms, websites, search engines, mobile apps, and emails. Digital ads can take several forms, including text, images, and video.
Benefits of digital advertising
Here are some of the benefits of using digital advertising in your marketing strategy:
Targeting
With digital ads, you have the option to target users more precisely than is possible with physical ads.
Connecting your Shopify store to Facebook and Instagram or TikTok, for example, can help you retarget social media users who have previously visited your site.
You can also incorporate personalization via dynamic creative optimization (DCO), which customizes online ads in real time so that individual customers see a different version of an ad.
Tracking
You can use digital marketing analytics to evaluate your ads’ effectiveness and iterate your campaigns accordingly. While traditional advertising methods, like magazine and billboard ads, often rely on estimates, digital ad platforms report impressions and clicks. These metrics can support more accurate performance monitoring and marketing attribution.
For example, Shopify’s built-in analytics track sales and number of orders attributed to a specific ad campaign.
Flexibility
In a digital setting, you can react to real-time data by updating campaign content, increasing or decreasing your ad spend on a platform, and refining your ad audiences. For example, you can A/B test different ad copy and visuals to see which are more effective.
Some platforms have built-in A/B testing tools, like Google Ads. Google Ads’ Performance Max campaigns also use an AI-powered DCO feature to combine creative assets (headlines, descriptions, images, and videos) and automatically optimize ad delivery based on conversion goals. It then adjusts ads in real time to maximize conversions.
Types of digital advertising
Here are six common types of digital ads:
Search ads
Paid search ads appear on search engine results pages (SERPs) in response to relevant terms. Advertisers bid for these placements through keywords or automated targeting, and the content mimics a search result, featuring a link and a brief description.
Answer engine ads
In 2026, ChatGPT launched ads for eligible users aged 18 and older with Free and Go plans. These ads appear in a labeled box below the chatbot’s answer to their prompts, rather than as part of the chatbot’s response itself.
Audio ads
Businesses distribute audio ads through streaming services, which play them between songs or incorporate them into podcast episodes.
Video ads
Video ads can appear on websites and social media platforms or be distributed through streaming services.
In-stream ads run in video players on websites like YouTube, Vimeo, and Facebook. Vertical video ads can blend into a user’s TikTok or Instagram feed.
You can connect your Shopify store to Google and YouTube to help you create video ads—and even shoppable ads.
Display ads
Display advertising involves placing ads, like banner ads and interstitial ads, within website content. They typically combine text with visuals, like still images, animations, or video content. The Google Display Network is a major platform in display ads.
Social media ads
Social media advertising is any ad format served on a social media platform, such as Instagram, Facebook, TikTok, LinkedIn, and X.
Digital advertising pricing models
If you’re ready to spend on paid traffic, here’s a breakdown of common pricing models from advertising platforms:
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Cost per mille (CPM):CPM prices ads per thousand impressions (mille is Latin for “thousand”).
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Pay-per-click (PPC): PPC ads charge the advertiser each time a user clicks on them.
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Cost per action (CPA): CPA measures the average advertising cost of specific actions, like a click or conversion.
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Cost per view (CPV): CPV charges advertisers for qualifying video views or interactions.
Tips for digital advertising
- Start with organic content and boost your winners
- Use AI to rapidly iterate
- Track your return on ad spend
Digital advertising aims to educate, excite, and influence consumers, ultimately driving conversions. Here are tips to support your digital advertising strategy:
Start with organic content and boost your winners
Marketing consultant Nik Sharma, who has worked with direct to consumer brands like JuneShine and Caraway, recommends testing content organically before investing in paid content. On an episode of the Shopify Masters podcast, Nik says it’s best to trial run organic content first, then use paid ads to boost the visibility of your high-performing creative.
“If you start with organic and validate what works, you’ve already got proof that there’s a good chance that’ll work when it comes to paid,” he says.
Book Box founders Kate Blazeska and Carl Matheson had success with this approach.
“For us, if it’s performing organically, it always performs on paid advertisements because you are promoting it to the right audience,” says Carl in a Shopify interview.
When an ad created with a micro-influencer had huge organic success, they used the organic content in paid ad campaigns through Meta.
Marketing analytics tools can help you identify which ads perform well organically so you can put your ad spend dollars behind promising creative.
Use AI to rapidly iterate
AI tools can speed up the process of creating ads and generating variations to A/B test. For example, Ridge CEO Sean Frank built an AI-powered ad factory to automatically generate new static ads to support the accessories brand’s significant investment in digital advertising.
“I took our best-performing ads—the ones my design team created that I know work—and fed them into a custom GPT,” he says on Shopify Masters. “Then we automated the whole process, so it’s constantly generating new variations and dropping them into a Google Drive, ready for our team to review and deploy.”
In addition to ad content creation, AI-powered dynamic ads can swap out creative elements to deliver personalized ads to individuals.
You can use a variety of AI apps to assist with ad iteration—including tools like Glowtify, which generates complete digital advertising campaigns with specific and actionable goals.
Track your return on ad spend
Return on ad spend (ROAS) measures how much revenue you generate for every dollar spent on a marketing campaign. ROAS helps marketing teams understand if their ad creative and messages, audience segmentation, and costs to create and run ads are delivering measurable value in business revenue.
Your break-even ROAS depends on your profit margins and other costs. A campaign can generate more revenue than it spends on advertising without necessarily being profitable.
A “good” ROAS varies by industry and a business’s marketing goals. “We always make sure our ROAS is at least a 2.3,” By Rosie Jane Founder and CEO Rosie Johnston says on Shopify Masters, meaning every dollar the brand spends on advertising returns $2.30 in revenue. The brand uses this target to guide advertising spend and help ensure that marketing campaigns stay profitable.
You can also look at ROAS for a specific customer segment to learn how different groups are impacting your ROAS. True Classic Cofounder and Chairman Ryan Bartlett prioritizes tracking ROAS for new customers (NC) over total ROAS to evaluate customer acquisition efficiency.
“New customer ROAS is what we look at now more than anything,” he says on Shopify Masters. “When I wake up and I open up Triple Whale, and I look at our dashboards, NC ROAS is my number one metric. And if it’s like 0.7, we way overspent this morning. If I wake up and it’s like 1.5, we’re like, wow, today’s gonna be wildly profitable.”
You might set a break-even ROAS for a customer’s first purchase, a strategy used by clothing brand Unbound Merino.
“If we break even on the first purchase, I think that’s worth it because the customers come back,” CEO Dan Demsky says on Shopify Masters.
From there, the brand scaled its ad spend, with Dan reporting an overall ROAS of at least three.
If you use Shop Campaigns, you can track your ROAS and set ROAS targets using Shopify’s native platform tools, increasing your spend when you’re comfortably hitting or exceeding your target.
Digital advertising FAQ
What is meant by digital advertising?
Digital advertising involves purchasing paid ads to promote your products or services online. As a key aspect of digital marketing, it includes social media advertising and search advertising while excluding print advertising or television commercials, which are forms of traditional advertising.
How much does digital advertising cost?
Digital advertising costs vary by platform, ad type, campaign objective, and industry competition. With a variety of ad formats, you can set flexible budgets and choose strategies matching your resources.
How do beginners start digital advertising?
To execute a digital ad campaign, start by setting clear campaign goals and defining your target audience. Allocate a budget and choose the right ad networks. Create high-quality assets, launch your campaign, and continuously monitor and optimize its performance.
