It can be tough for any advertiser to determine whether to use search ads or display ads in their online campaigns. It’s an imperative decision to make because using the wrong ad format could waste a significant percentage of your paid advertising budget.
What are Search and Display Ads?
Search Ads
Paid search advertising is one of the most popular forms of PPC advertising, where brands pay (using an auction-based model) to have their ads displayed above and below organic search engine results when users search certain keywords. These ads aim to capture users who are actively looking for information, products, or services similar to what you offer.
An example of a search ad might be when you search for “best SEO tools” and see a listing for SEO Tool X at the top of your search results. These ads usually come with a clear headline, a short description, and a display URL, making it easy for users to understand what is being offered at a glance.
Search ads are driven by relevance; the better your ad matches the user’s search intent, the higher the click-through rate (CTR) will be. This leads to more efficient use of your advertising budget and better overall performance of your campaigns.
Display Ads
Display ads are a form of “push” advertising that appear based on various targeting parameters, reaching users across the Google Display Network (GDN) rather than just in search results. These ads are typically visual and can include images, videos, and interactive elements to engage the audience.
For instance, a display ad might feature a vibrant banner for Product Y on a blog that discusses digital marketing trends. They are not limited to search queries and can appear on a wide variety of websites that are part of the ad network, making them excellent for reaching a broad audience.
Display ads can be creepy-effective when utilized for remarketing. If you’ve ever visited a website, added a product to your cart, but didn’t complete the purchase, you’ve likely seen ads for that product follow you around the internet. This is no coincidence and is an effective way to nudge users back into the purchasing funnel.
Comparing the Metrics for Search & Display Ads
Average Conversion Rate (CVR)
The average conversion rate across all industries is 4.40% for search campaigns, while the average for display campaigns is only 0.57%. This data suggests that search ads are more effective at driving immediate actions like purchases or sign-ups. However, the actual conversion rate can vary significantly depending on the industry, target audience, and quality of the ad copy and landing page.
For example, in the finance industry, search ads might show a conversion rate of 5.01%, while display ads could be much lower around 0.89%. The high intent behind searches related to financial services often translates into higher conversion rates. This is why understanding industry benchmarks can help gauge the success of your campaigns.
Average Cost Per Click (CPC)
The average Google Ads CPC is $2.41 for search network ads, and only $0.59 for display network ads. Display ads offer a more cost-effective way to build brand awareness, but they may not always drive immediate conversions as effectively as search ads.
However, it’s essential to monitor your CPC closely. Let’s say you are selling a high-margin product like luxury watches. A higher CPC might be justifiable if the search ads convert well enough to provide a significant return on investment (ROI). In contrast, if you’re promoting a low-margin product, you might favor display ads due to their lower CPC, despite the lower immediate conversion rate.
When to Use Each Ad Type
6 Reasons to Use Search Ads
- To Supplement Organic Traffic: Search ads can enhance your presence on search engines while you build your organic rankings. They are particularly useful for seasonal promotions or when launching a new product.
- To Capture High-Quality Leads: Use specific keywords that match user search intent to attract highly interested prospects. For instance, a B2B software company could target terms like “best CRM for small businesses.”
- When Catering to a Local Audience: Search ads can be targeted to specific geographic locations, ideal for local businesses like restaurants, law firms, or medical practices. This is particularly effective if combined with location-based keywords, such as “best sushi restaurant in New York.”
- If You Have a Short Sales Cycle: Search ads are effective for products with a quick decision-making process, such as fast-moving consumer goods (FMCGs). Immediate visibility for keywords like “buy running shoes online” can lead to quick purchases.
- To Promote Emergency Products: Great for urgent services like plumbing or emergency repair, where users have immediate needs. They could use keywords like “emergency plumber near me.”
- If You Have a Smaller Budget: Search ads can be scaled to fit tighter budgets and are highly measurable. This allows for precise ROI calculations and adjustments to maximize efficiency.
4 Reasons to Use Display Ads
- If Your Product or Service is More Visual: Display ads can use images and videos to effectively showcase visual products like clothing, cars, and beauty products. Brands can use rich media formats to create engaging ads that capture attention.
- To Create Awareness Among Those with Passive Intent: Ideal for generating interest among users who may not be actively searching for your product but might be intrigued by visual ads. For example, a beautifully designed banner ad for a new tech gadget can catch the eye of tech enthusiasts browsing a related blog.
- If You Have a Longer Sales Cycle: Display ads can keep your brand top-of-mind throughout a longer decision-making process. In industries like automotive, insurance, or real estate, prolonged exposure can encourage potential customers to consider your offerings when they are ready to buy.
- To Reach Niche Markets: Effective for targeting specific audience segments that frequent particular websites or online communities. For instance, a niche fitness equipment brand might choose to display ads on health and wellness blogs, reaching a more targeted audience.
Setting Up Display and Search Ad Campaigns
Creating a Campaign on Google Search Network
To set up a search ad campaign, start by identifying your target keywords using tools like Google’s Keyword Planner or SEMrush. These tools help determine the estimated search volume and competition for each keyword. Once you have your keywords, create ad groups and craft compelling ad copy. Google offers multiple ad extensions – like site links, callouts, and structured snippets – to include additional information and improve CTR.
For example, a local bakery might target keywords like “best cupcakes in Chicago” and use ad extensions to highlight different flavors, special promotions, and customer reviews. This provides users with multiple reasons to visit the bakery’s website or store.
Creating a Campaign on Google Display Network
For display advertising, use the Google Display Network to create visually appealing ads that grab attention across various websites. Define your audience based on demographics, interests, in-market segments, or remarketing lists. Google provides a wide range of ad formats, including responsive display ads, which automatically adjust size, appearance, and format to fit available ad spaces.
Let’s say you’re promoting a travel agency offering adventure tours. You can create engaging image and video ads showcasing the destinations and activities. Target travel enthusiasts who have previously visited travel blogs or shown interest in travel-related content. This way, you can build interest and drive traffic to your landing page.
Which Will It Be: Display Ads or Search Ads?
The choice between search ads and display ads isn’t always clear-cut. It depends on your marketing goals, budget, product type, and target audience. Search ads are highly effective for targeting users with immediate intent to purchase, while display ads are powerful tools for building brand awareness and engaging users across various stages of the buying journey.
For a comprehensive strategy, consider using both types of ads. For instance, you can begin with a display campaign to create initial awareness and follow up with search ads to capture the interest of users who started looking into your product or service.
Ready to Turn More Ad Clicks into Conversions?
Both ad formats have their benefits, and both can be extremely useful in different situations. However, understanding the differences and knowing when to use each one can help you make the most of your advertising strategy. If you’re looking to deepen your knowledge, sign up for our Digital Marketing Course today and take your advertising skills to the next level!
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