What factors should businesses consider when choosing the right type of paid advertising? Is cost the sole determining factor, or are there other crucial considerations businesses need to weigh to use the most suitable advertising format? 

This article aims to shed light on the distinctions between Search Ads and Display Ads, providing valuable insights to assist businesses in making more informed and precise decisions. Let’s find out!

Search Ads

What are Search Ads?

Search ads are online advertisements on search engine results pages (SERPs). These ads are typically text-based and are displayed when a user searches for specific keywords or phrases related to the advertiser’s product or service.

Search ads often appear at the top or bottom of the search results page, and advertisers pay for these ads based on a pay-per-click (PPC) model, meaning they pay when a user clicks on the ad.

Display Ads

Display ads are visual advertisements that include images, graphics, and sometimes multimedia elements. These ads are displayed on websites within the Google Display Network (GDN) or other advertising networks. 

Unlike Search ads, Display ads are not triggered by a user’s search query but are shown to users based on their interests, behavior, demographics, or other targeting criteria.

Display ads can appear on various websites across the internet, and advertisers often pay for them based on impressions (cost per thousand impressions or CPM) or clicks (cost per click or CPC).

The average metrics for Search Ads and Display Ads

Average click-through rate by industry

The average click-through rate (CTR) for Google Ads varies across industries. For Search, the average CTR is 5.06%, reaching a high of 7.83% in the Travel and Tourism industry and a low of 3.27% for Law and Government. 

On the Display network, the average CTR is considerably lower at 0.50%, with Business and Industrial achieving a high of 0.64% and Health having the lowest at 0.37%.

While multiple factors affect CTR, such as ad copy, CTAs, and ad extensions, audience targeting plays a significant role. If your CTR needs to improve, it may indicate accurate targeting or the need to implement segmented marketing campaigns.

Average cost per click by industry

Google Ads cost per click varies across industries, with an average of $2.41 for Search ads and $0.59 for Display ads.

Both CPC and ROI play crucial roles in ensuring the financial success of your PPC campaigns. CPC determines the cost of your clicks, while ROI depends on the value you derive from that investment. It is essential to identify and target cost-effective and valuable clicks. There are two primary approaches to achieve this:

Improving quality score

• Select highly relevant keywords that align with your ad copy and landing page content. 
• Craft compelling ad copy with clear messaging and integrate keywords strategically. 
• Optimize your landing pages for speed and mobile devices, ensuring a seamless user experience.

Expanding and refining keywords

• Add new relevant and valuable keywords to your campaigns while eliminating irrelevant or overpriced clicks. 
• Regularly designate negative keywords to filter out traffic from searchers with low conversion potential, thus maintaining control over your average cost per click.

Average conversion rates by industry

The average conversion rate across all industries is 4.40% for search campaigns, whereas Display campaigns have a lower average of 0.57%.

Search ads tend to achieve higher conversion rates than display ads, primarily attributed to the Search Network’s ability to connect advertisers with users actively seeking specific products. 

In the Search Network, users actively search for specific products, services, or information, indicating a clear intent to fulfill a particular need. This active and purposeful engagement makes users within the Search Network more likely to convert into customers.

Conversely, Display ads often target users who may be more passively browsing content or engaging with websites for various purposes. These users may have a vague product or service in mind, resulting in a lower intent to make an immediate purchase or conversion.

Average cost per action (CPA) by industry

The average CPA in Google Ads varies across industries, with the Search Network averaging $56.11 and the Display Network averaging $90.80.

Did you notice that only the CPA graph includes display averages that are higher than search averages? The reason is that search advertising has users actively searching for specific keywords because they already know what they are looking for.

On the other hand, the Display advertising caters to passive searchers. These users may have a vague goal when browsing, resulting in lower intent. As a result, click-through rates, conversion rates, and cost-per-click tend to be lower on the Display Network.

What are Search Ads best for?

Capture high-quality leads

Search Ads are more targeted and generally receive a higher click-through rate (CTR) because the keywords and ads include the phrases users are searching for. This means you can continually refine your searches so that only people who want to buy your products or services are sent to your websites. 

Focus on the local audience

Search ads allow businesses to focus on the local market by targeting keywords relevant to the specific location. This is particularly valuable for businesses that operate in specific regions and want to concentrate their marketing efforts where their target audience is located.

By combining keyword targeting with geographic, language, gender, age, and affinity targeting options, businesses can precisely reach their local audience.

Have a short sales cycle for products or services

Designed to capture users near the point of purchase, search ads effectively influence potential customers who are already in the decision-making phase. This eliminates the need for prolonged advertising efforts and aligns well with businesses that have a rapid sales process.

Promote emergency products

You should begin with search ads if you provide urgent or emergency services like plumbing, locksmithing, towing, emergency veterinary care, or electrical repairs. 

These are services that people are unlikely to consider while casually reading a blog or scrolling through Facebook and stumbling upon your display ad. Instead, when someone faces an immediate issue like being locked out of their car or their pet falling ill suddenly, they are more likely to search for a service to help them immediately. 

Note that these urgently needed services are typically searched for on mobile devices. Consider using call extensions to streamline the process for the searcher in need, as in the example ad above.

Have a limited marketing budget

Search ads are often based on a pay-per-click (PPC) system. Businesses only pay when users click on their ads, giving them better control over their spending and making it a cost-effective option for those with limited financial resources.

What are Display Ads best for?

Focus on eye-catching and appealing visual images

Display ads are a powerful strategy for visually oriented products like clothing, cars, beauty, and pet care. Unlike regular text-based PPC ads, Display ads allow design and customization of the ad’s graphics, videos, audio, and your brand’s visual elements. This helps these products grab users’ attention and convey your message more effectively and quickly.

Use short, impactful phrases, key value propositions, or explanatory graphics to engage viewers quickly.

Reach niche markets

Display ads effectively increase brand awareness by appearing on websites that potential customers frequently visit. With Google’s ability to match keywords and ads to relevant web pages across its vast network of over 2 million websites on the Google Display Network (GDN), you can easily target a niche audience with interest-oriented and contextual ads.

Build your brand awareness

According to Mega Digital, consumers nowadays must encounter a brand at least ten times before considering engaging with it. 

While Search ads only appear when consumers actively search for your product or service, Display ads reach consumers before they realize their need for your products. This generates initial interest and establishes brand awareness among your intended audience more effectively.

Have a longer sales cycle for products or services

The sales cycle tends to be lengthier for products and services requiring substantial investments, such as insurance, education, enterprise software, automobiles, jewelry, etc. Therefore, ensuring that your brand stays top-of-mind for prospects as they consider making a purchase is crucial. This is achieved through advertising strategies like:

• Cross-channel marketing: Putting ads on different devices and online places to help people decide to buy what you’re selling.
• Omni-channel marketing: Ensuring people have a smooth experience when looking to buy, no matter where they are online.
• Retargeting: Showing ads to people who have checked out your brand before so they remember you even after leaving your website.

Conclusion

While Search Ads excel in capturing users seeking information or products, Display Ads shine in building brand awareness and engaging a broader audience. The optimal choice depends on the specific goals and nature of the campaign. A balanced approach, integrating both types strategically, might be the key to a comprehensive and effective digital marketing strategy.

Reference: Instapage