Display Ads vs Search Ads: A Comprehensive Guide

Advertising online presents a tough choice for any marketer: should you invest in search ads or display ads for your next campaign? Each type has its unique strengths and limitations, and choosing the wrong one can lead to wasted ad spend and missed opportunities. This guide covers everything you need to know about search and display ads, breaking down the differences, benefits, and best-use cases to help you make an informed decision.

What Are Search and Display Ads?

Search Ads

Search ads are part of paid search advertising, a popular pay-per-click (PPC) model where brands bid on keywords and appear on search engine results pages (SERPs).

They’re designed to target users actively looking for specific products or services, showing up above or below organic results. Search ads are text-based and typically include three main elements: a headline, display URL, and description. Google Ads’ bidding system determines ad ranking, with factors like bid amount and Quality Score influencing cost per click (CPC) and visibility.

Example: A search for “online doctor” may show a text ad for a telemedicine service directly above organic search results on Google.

Display Ads

Display ads appear across Google’s Display Network (GDN), which spans over 2 million websites, reaching more than 90% of online users. Unlike search ads, display ads focus on “push” marketing — they’re strategically placed on websites, social media feeds, email inboxes, and even apps, appearing based on targeting settings rather than active search intent.

These ads can include rich media formats such as banners, videos, and graphics, which are well-suited for engaging users during passive browsing.

Examples of placements for display ads include:

• Social Media Feeds: Ads may appear natively in a user’s news feed on platforms like Facebook.
• Banner Ads: Positioned above or beside the main content on a website, often using attention-grabbing visuals.
• Email Ads: Displayed within email services like Gmail, often starting as text ads and expanding into images when clicked.

Search Ads vs. Display Ads: A Comparison of Key Metrics

When comparing search and display ads, two critical metrics are conversion rate (CVR) and cost per click (CPC).

• Average Conversion Rate:

• • Search Ads: 4.40% (all industries)
  • Display Ads: 0.57%

  Search ads drive more conversions as they cater to users with higher intent, actively searching for solutions to their needs.

• Average Cost per Click:

• • Search Ads: $2.41
  • Display Ads: $0.59

  Display ads are generally more cost-effective but may result in lower conversion rates due to lower intent from users.

When to Use Search Ads: 6 Key Scenarios

To Supplement Organic Traffic
For businesses that can’t wait for SEO to deliver results, search ads are a powerful short-term solution for gaining visibility while organic rankings improve. Search ads direct users to solutions promptly, making them an excellent option for capturing immediate demand.

To Capture High-Quality Leads
Search ads offer extensive keyword targeting options, allowing advertisers to use negative keywords to filter out irrelevant searches. This precision ensures that ads are displayed to high-intent users, leading to higher-quality leads and better conversion rates.

When Targeting a Local Audience
Search ads are effective for businesses that serve local customers. By setting geographic targeting, businesses can connect with users within a specific area who are searching for local services, unlike display ads that cast a wider, sometimes global, reach.

For Short Sales Cycles
If your product or service has a quick purchase cycle, search ads are often more effective. Display ads may be less efficient for these scenarios as they work better for building awareness over time rather than converting immediately.

To Promote Emergency Products or Services
Search ads are perfect for emergency services such as plumbers, locksmiths, or emergency veterinary care, where users are likely to search for solutions immediately rather than passively seeing an ad while browsing.

If You’re Operating on a Smaller Budget
With search ads, you have the flexibility to control costs and target specific audiences. New businesses with limited ad budgets can benefit from the higher conversion rates of search ads, maximizing ROI.

When to Use Display Ads: 4 Key Scenarios

If Your Product or Service Is Highly Visual
Display ads can showcase products through images and videos, making them ideal for visual-based industries like fashion, home decor, and entertainment. Visual storytelling can effectively capture attention and interest, even if users aren’t actively searching for your products.

To Build Awareness Among Users with Passive Intent
Display ads reach users during the discovery phase, capturing attention and cultivating interest in a brand or product. Display campaigns are especially useful for building demand among users who may not yet realize they need your product, creating a lasting impression through repeated exposure.

For Long Sales Cycles
If your product or service requires significant research or a lengthy decision-making process (e.g., real estate, higher education, or high-value software), display ads are ideal for staying top of mind. Techniques like retargeting can help keep your brand visible to users who have already shown interest but aren’t ready to convert.

To Reach Niche Markets
With interest and contextual targeting, display ads let you connect with niche audiences who frequent specific websites. By aligning your ads with relevant content on the GDN, you can effectively drive brand awareness in highly specific market segments.

How to Optimize Campaigns: Combining Search and Display Ads for Maximum ROI

Google suggests using both search and display campaigns to maximize reach and engagement. However, simply casting a wide net isn’t always effective. Here are some strategies for using search and display ads together:

• Cross-Channel Marketing: Create a consistent message across search and display channels to reinforce your brand. This approach allows users to encounter your brand at multiple touchpoints, increasing the likelihood of conversion.
• Omni-Channel Marketing: Make sure that users have a seamless experience with your brand across various platforms, allowing them to move smoothly through the customer journey.
• Retargeting: Use display ads to re-engage users who clicked on a search ad but didn’t convert. By staying visible, you can prompt them to revisit your site when they’re ready to make a purchase.

Summary: Choosing the Right Ad Type for Your Campaign

To maximize your advertising results, use search ads if:

• You need immediate results and higher-quality leads.
• You have a high-intent, local, or emergency-focused target audience.
• You’re working with a smaller budget and need to control ad spend tightly.

Consider display ads if:

• Your product or service benefits from visual appeal.
• You aim to build brand awareness and reach users in the discovery phase.
• You’re targeting a niche market with a longer sales cycle.

FAQs

What is the primary difference between search ads and display ads?

Search ads appear on search engine results pages and target users actively searching for specific keywords, making them high-intent. Display ads are visual and appear across the Google Display Network, targeting users based on interests, demographics, or behaviors.

Which ad type is more cost-effective?

Display ads are generally more cost-effective, with a lower average CPC of $0.59 compared to $2.41 for search ads. However, search ads typically yield higher conversion rates due to targeting high-intent users.

When should I use search ads over display ads?

Use search ads when targeting users with high intent, like those searching for solutions or local services, or if you have a limited budget and need direct conversions.

Are display ads effective for retargeting?

Yes, display ads are highly effective for retargeting. They allow you to stay top-of-mind for users who previously interacted with your brand, helping with longer sales cycles and nurturing potential leads.

Can I use search and display ads together?

Absolutely. Using both ad types enables you to capture immediate demand (search ads) while building awareness and brand recall over time (display ads). Combining them can yield higher reach and overall campaign performance.

What industries benefit most from display ads?

Visual industries like fashion, travel, and lifestyle benefit from display ads. Products that require visual appeal or demonstration, such as eCommerce, also see success with display advertising.

What is the average click-through rate for search ads vs. display ads?

Search ads typically have a higher CTR as they target high-intent users, averaging around 1.91%. Display ads have a lower CTR, usually under 0.5%, as they target users based on interest or demographic data, not active search intent.

Conclusion

Incorporating both search and display ads in your marketing strategy allows you to leverage each type’s strengths, reaching users when they’re ready to convert and building awareness among those still considering. By choosing the right ad type for each campaign, you can make the most of your ad spend and drive more effective results for your business.