Advertising is not new. In fact, there\u2019s proof that advertising has been around since before modern history. The Egyptians used papyrus to make sales messages and wall posters; the ruins of Pompeii feature political campaign ads.Yet the industry today looks much different than it did in the pre-modern era\u2026 and it continues to evolve.First there was the print ad \u2014 found in newspapers and magazines, beginning in the 19th century. Then there was the Radio ad in the 1920s, followed by television advertising in the 1940s.Now, more and more, those advertising dollars are making their way online.In fact, media agency Magna is forecasting that digital media will account for 44% of all ad money spent globally this year \u2014 and they\u2019re projecting that it will be 50% by 2020. That\u2019s a projected $237 billion dollars this year, and $291 billion by 2020.But even online, advertising continues to evolve.The Three Types of Digital Advertising Used TodayOver half of all digital advertising dollars (51% according to Investopedia) goes to either Google or Facebook, so they are who we\u2019ll focus on for this article.Each of these services offer several different types of ads \u2014 and, as we\u2019ve discussed before, you\u2019ll want to target your ads depending on which service you\u2019re using.But what kinds of ads do they offer? And how can you utilize each of those types wisely for the best advantage?The first type of ad each service offers is the one most people think about when they think of ads and the internet: an ad that gets displayed based on demographics.The principle here is simple \u2014 it\u2019s similar to how ads are placed in magazines or newspapers. An advertiser identifies a demographic or demographic information that it feels matches the user or consumer it is trying to reach. Then it pays to show an ad to people who match that demographic information. These may be search ads or a display ads\u2026 but in either case, you determine the criteria based on your understanding of your customers.So, for example, you tell the service in question you want to reach female cat owners between 40-50 years old; or maybe you want to show your ads to people who are searching for \u201chow to tell if my cat is sick.\u201d In either case, you feed that information into the service, and it shows your ad to the users it has that match that data.Usually, they will have many users who match the data you input, and will show your ads to a lot of people. However, only a small percentage may actually be a good match for your product, and will click through to your site and then make a purchase.This type of ad is best for reaching cold leads \u2014 introducing them to your business and what you have to offer.The second type of ad each service offers allows you to upload a list of your best customers and then either market to them directly OR ask the system to find user just like your best customers.On Facebook this is called Lookalike Audiences. In Google\u2019s Adwords it is called Customer Match.This is pretty powerful stuff.Instead of you trying to identify demographics and traits your best customers share based on the information you have available about them, you can plug their emails or other identifying information into Google or Facebook, and they will look at all the data they have and do it for you.You can tell the system to find people who are only 5% different, or who are 10% different from your best customers\u2026 and it will.Think about that for a moment.As of June 2018, Facebook had an average of 1.47 billion daily active users. 68% of US adults use Facebook, according to Pew research, and they spend an average of 20 minutes on the site per day.And each time one of those users logs in and likes a page, status update, or watches a funny cat video, Facebook collects data on them. It collects location data, device information, relationship data, and more.And a quick google search shows that 1.17 billion people use Google search each day.Google\u2019s own page on what information they collect explicitly states that they collect information on: the things users search for, the sites they visit, the videos they watch, ads they click on, their location, their device usage, their IP address, the emails sent and received, contacts added, calendar events, photos and videos uploaded, docs, sheets and slides on drive, users names, email addresses and passwords, birthdays, gender, phone numbers, country\u2026That\u2019s a lot of data \u2014 and, more importantly, it\u2019s a lot more data that you\u2019d easily be able to collect yourself, which makes this a very powerful tool.The third type of ad each service offers is a retargeting ad. Retargeting ads show your ad to people who have already clicked on a previous ad or who have visited your website.Retargeting ads rely on a tiny bit of code that Google or Facebook provides that you add to your website \u2014 when that code loads, those services now know that that visitor has been to your site, and they can use that information to show that person ads.Retargeting ads are a step up from demographic based ads; they\u2019re typically cheaper and typically have a higher ROI. However, they require you to get those visitors to your site first.You\u2019ve almost certainly experienced these \u2014 you click on a video or go to a website, and suddenly ads from that company are following you everywhere. Amazon is particularly notorious for this. You check out a product, or a few products of a specific type, and suddenly you\u2019re seeing Amazon ads for that product everywhere you go.How to Build a Smart Digital Advertising StrategyOf course, it takes more than just knowing your options to use these different ad types wisely, and build a successful digital advertising strategy.Take retargeting ads, for example.While you could simply show product ads to people who have visited your website, the real power of this type of ad is that you can segment those users by their behavior while they were on your site and show them ads that are related to those behaviors.Let\u2019s say someone came to your website, looked around a bit, and then clicked over to your pricing page\u2026 where they promptly decided to leave.We could make an educated guess that price was a significant factor in that purchase decision (although price is never the true reason a customer doesn\u2019t buy). You can then add that user to a retargeting list that shows them and any others who followed a similar behavior pattern an ad for a discount.Take that one step further. What about those shoppers who added a product to their cart, just to abandon it before completing the purchase?You can use retargeting here, too.An estimated 75% of all shopping carts are abandoned. Imagine if just a fraction of the customers who abandon their carts were lured back and decided to buy\u2026 we\u2019re talking a potentially significant increase in revenue.In fact, one luxury retailer increased sales 171% with smart retargeting campaigns.And that\u2019s really just the beginning.When you use the different types of advertising to feed into each other, you can essentially create a marketing funnel before ever collecting a user\u2019s email address \u2014 what I call a \u201cbuilding a pre-nurture funnel.\u201dBut that\u2019s a whole other article.Which types of advertising have you tried? What results did you see? Is there anything you\u2019ll do differently based on what you\u2019ve read here?