What Are Search Ads and Display Ads?
They solve different problems.
Search ads are text-based advertisements that appear on search engine results pages when users type specific queries. Display ads are visual advertisements — images, banners, or rich media — that appear across websites, apps, and video platforms within an ad network. According to Google Ads Help, the Google Display Network alone reaches over 90% of global internet users across more than 2 million websites. The core difference: search ads respond to expressed intent, while display ads generate awareness among passive audiences.
Search ads show up when someone types "buy running shoes size 10" into Google. The user has declared what they want. Your ad appears alongside organic results, competing for a click from a buyer who is actively shopping. You pay per click, and that click carries high purchase probability because the user initiated the interaction.
Display ads work differently. They appear as banners, images, or video units while someone reads a news article, checks the weather, or watches a YouTube video. The user did not ask to see your ad. You are interrupting their activity with a visual message designed to create interest, build recognition, or bring back a previous visitor.
Both ad types live inside Google Ads, but they operate on fundamentally different mechanics. Search ads are pull marketing — capturing existing demand. Display ads are push marketing — generating new demand or reinforcing existing awareness. Choosing the wrong type for your objective wastes budget. Choosing the right one compounds returns.
Search ads outperform display ads on every direct-response metric. The average search ad CTR is 3.17% compared to 0.46% for display, and search conversion rates average 3.75% versus 0.77% for display, according to WordStream's 2024 industry benchmarks. However, display ads cost 60–80% less per click and reach audiences that search ads cannot touch — people who have never searched for your product.
Raw click-through and conversion rate comparisons favor search ads by a wide margin. But those numbers miss a critical nuance: the two ad types serve different stages of the buying process. Comparing their conversion rates is like comparing a store greeter's sales to a checkout clerk's sales — they have different jobs.
Here is how the two ad types compare across the metrics that matter for ecommerce:
| Metric | Search Ads | Display Ads |
|---|
| Avg. CTR | 3.17% | 0.46% |
| Avg. CPC (ecommerce) | $1.16–$2.69 | $0.30–$0.70 |
| Avg. conversion rate | 3.75% | 0.77% |
| Avg. cost per acquisition | $45–$65 | $60–$90 (prospecting), $20–$40 (remarketing) |
| Reach potential | Limited to search volume | 90%+ of internet users |
| Creative format | Text only (Search), product feed (Shopping) | Image, video, responsive, HTML5 |
| Audience targeting | Keyword intent | Demographics, interests, placements, remarketing |
| Best funnel stage | Bottom (purchase intent) | Top (awareness) and mid (consideration) |
Sources: WordStream, Google Ads Help
The CPA gap narrows significantly for display remarketing. When display ads target people who already visited your site — cart abandoners, product page viewers, past purchasers — conversion rates jump to 2–5x the display average. That is why Google Ads remarketing campaigns on the Display Network often deliver the lowest CPAs in an entire account.
Use a CPC calculator to model how the cost difference between search and display clicks affects your acquisition costs at your specific conversion rate.
When Should You Use Search Ads?
Search ads are the right choice when buyers actively search for your product, your category has measurable keyword volume, and your goal is direct-response conversions. They perform strongest for products that solve a known problem — supplements, replacement parts, professional services, software — where the buyer already understands what they need and is comparing options.
Search ads earn their budget in five specific scenarios:
1. Your product category has search demand. Open Google Keyword Planner and check monthly volume for "[buy] + [your product]" and related terms. If there are 500+ searches per month for your core terms, search ads can deliver consistent acquisition volume.
2. You sell products with a short consideration cycle. Items under $100 with clear utility — phone cases, vitamins, pet supplies, cleaning products — convert well from search because the decision path is short. The user searches, compares, and buys in one session.
3. You compete on price or value. Search results are inherently comparative. Shoppers clicking search ads often check multiple results. If your offer is competitive — strong price, free shipping, good reviews — search ads drive profitable conversions. If you are 3x the price with no visible differentiation, you will pay for clicks that buy elsewhere.
4. You want measurable, attributable revenue. Search ads produce the cleanest attribution data. A click on a search ad that leads to a purchase within 30 days is straightforward to track and value. This makes search ads the preferred channel for CFOs and performance marketers who need clear ROI reporting.
5. You need revenue fast. A search campaign targeting high-intent keywords can generate purchases within 48 hours of launch. Display campaigns typically need weeks to optimize. For brands in a cash-constrained growth phase, search delivers faster payback.
Search ads do have limits. They cannot reach people who do not know your product exists. They cannot build brand recognition. And they are constrained by search volume — if only 200 people per month search for your product type, search ads alone will not scale your business.
When Should You Use Display Ads?
Display ads are the right choice when you need to build awareness with audiences who have never searched for your product, when you want to retarget site visitors across the web, or when your product requires visual demonstration to communicate its value. Display campaigns excel for new product launches, brand-building, and re-engaging warm audiences at low CPMs.
Display ads justify their budget in these scenarios:
1. Your product requires visual storytelling. Fashion, home decor, beauty, food — categories where the product's visual appeal drives desire. A text-based search ad cannot convey the texture of a leather bag or the aesthetic of a living room setup. Display ads show the product in context.
2. You are launching a new product or category. Nobody searches for a product they have never heard of. If you have invented a new type of kitchen tool or formulated a skincare ingredient that does not exist in the market yet, display ads introduce the concept to potential buyers before search demand exists.
3. You want to retarget visitors who did not convert. Display remarketing is one of the highest-ROI advertising tactics available. Showing product-specific banner ads to people who viewed those exact products on your site generates conversion rates 2–5x higher than prospecting display campaigns. Pair this with remarketing strategy across email and other channels.
4. You need massive reach at low cost. Display CPMs range from $1–$5, meaning you can put your brand in front of 1,000 people for a few dollars. For awareness-stage campaigns where the goal is recognition rather than immediate clicks, display is the most cost-efficient format.
5. Your search campaigns are already maxed out. If you have captured all profitable search volume and need to grow, display ads open a new demand source. They reach the 95%+ of your target market who are not actively searching at any given moment.
The weakness of display ads: low attention. Users are not there to see your ad. Banner blindness is real — a study by Infolinks found that 86% of consumers experience banner blindness. Your creative must earn attention in under 2 seconds or it gets ignored. This makes creative quality the single biggest lever in display campaign performance.
Which Ad Type Works Best for Each Business Goal?
The optimal ad type depends on your objective, not your preference. Search ads win for direct purchases, lead generation, and competitive conquesting. Display ads win for brand awareness, remarketing, and product launches. Some goals — like full-funnel growth — require both running simultaneously with distinct budgets and KPIs.
Here is a decision matrix mapping common ecommerce goals to the right ad type:
| Business Goal | Best Ad Type | Why | Key Metric |
|---|
| Immediate sales | Search | Captures existing purchase intent | ROAS, CPA |
| Brand awareness | Display | Massive reach at low CPM | Impressions, reach, brand lift |
| Remarketing / retargeting | Display | Visual product reminders across the web | ROAS, view-through conversions |
| New product launch | Display first, then Search | Build awareness before demand exists | CPM, then CPA as search volume grows |
| Competitor conquesting | Search | Bid on competitor brand terms | Impression share, CPA |
| Lead generation | Search | Intent-driven form fills | Cost per lead, lead quality |
| Seasonal promotions | Both | Search captures demand surge, Display amplifies | Blended ROAS |
| Market expansion (new geo) | Display first, then Search | Build recognition in new territory | Reach, then conversion rate |
| Customer win-back | Display | Visual reminders to lapsed buyers | Reactivation rate, CPA |
| Cross-sell / upsell | Display | Show related products to existing buyers | Revenue per customer, AOV |
The mistake most advertisers make: using display ads for direct-response goals, then declaring display "does not work" when conversion rates are low. Display is not designed to convert cold audiences on the first impression. It is designed to introduce, remind, and reinforce — creating the conditions for a search ad or direct visit to close the sale.
How Should You Split Budget Between Search and Display?
For ecommerce brands starting out, allocate 70–80% of budget to search ads and 20–30% to display remarketing. As search campaigns become profitable and reach volume ceilings, shift incrementally toward display prospecting. Mature brands typically settle at 50–60% search and 40–50% display, according to Google's best practices documentation. The ratio should be driven by marginal ROAS — each dollar goes to whichever channel returns more.
Budget allocation is not a fixed formula. It shifts based on your stage:
Stage 1: Launch (months 1–3). Put 80% into search. Target high-intent, high-volume keywords. Use the remaining 20% for display remarketing only — retargeting website visitors and cart abandoners. Do not spend on display prospecting yet. You need revenue and data before you can afford awareness spending.
Stage 2: Growth (months 4–8). Search campaigns are profitable. Shift to 65% search, 20% display remarketing, 15% display prospecting. The prospecting budget tests audience segments, creative formats, and placements. Measure view-through conversions and assisted conversions — not just last-click — to understand display's true contribution.
Stage 3: Scale (months 9+). Search volume is maxed. You have winning display creative and proven audiences. Move to 50% search, 25% display remarketing, 25% display prospecting. Display now functions as a demand generation engine feeding search campaigns. Monitor branded search volume as a proxy for display effectiveness.
Track marketing attribution across both channels to understand how display impressions influence later search conversions. Last-click attribution dramatically undervalues display advertising.
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ConversionStudio helps ecommerce brands build high-converting ad campaigns across search and display. Generate landing pages, ad copy, and conversion-optimized offers tailored to each channel. Start free at ConversionStudio.
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What Are the Most Common Mistakes When Running Both Ad Types?
The three costliest mistakes: running display ads with search-campaign expectations, failing to exclude converters from remarketing audiences, and using identical creative across both channels. Each mistake wastes 20–40% of the affected budget. The fix for all three is treating search and display as separate systems with distinct goals, audiences, and success metrics.
Mistake 1: Judging display ads by search metrics. Search ads convert at 3–4%. Display prospecting converts at under 1%. If you hold display to search-level CPA targets, you will pause every display campaign before it generates enough data to optimize. Instead, measure display on CPM, reach, and assisted conversions for prospecting — and CPA only for remarketing.
Mistake 2: Not excluding converters. Showing remarketing ads to people who already purchased wastes impressions and irritates customers. Always create a "purchasers" audience list and exclude it from acquisition campaigns. The exception: cross-sell campaigns intentionally targeting past buyers with complementary products.
Mistake 3: Using the same creative everywhere. Search ads are text. Display ads are visual. But even within display, prospecting creative should differ from remarketing creative. Prospecting ads introduce your brand and value proposition. Remarketing ads show specific products the visitor already viewed, with urgency or incentive messaging. One-size-fits-all creative underperforms in both contexts.
Mistake 4: Ignoring frequency caps. Without frequency limits, display ads can show the same person your banner 50+ times in a week. After 5–7 impressions, additional views generate annoyance rather than conversions. Set frequency caps at 3–5 impressions per user per day for prospecting and 5–7 per day for remarketing.
Mistake 5: Skipping negative keywords on search. Irrelevant search queries drain budget fast. Terms like "free," "jobs," or "how to make" attached to your product keywords generate clicks from people who will never buy. Review search term reports weekly and build a negative keyword strategy to protect margins.
How Do Search and Display Ads Work Together in a Full Funnel?
The highest-performing ecommerce ad accounts use search and display as complementary layers in a single funnel. Display prospecting introduces the brand at the top. Search captures mid-funnel research queries. Display remarketing re-engages visitors who did not convert. Search branded campaigns close the final purchase. This layered approach produces 20–30% higher blended ROAS than either channel running independently, according to Google's cross-network data.
The full-funnel sequence works like this:
Top of funnel — Display prospecting. Target in-market audiences, affinity audiences, and lookalikes of your best customers. The goal is not conversions — it is qualified website visits. Measure success by cost per site visit and time on site. These visitors become your remarketing pool.
Mid-funnel — Search non-branded. Visitors who saw your display ads and became curious will search for your product category. Your search campaigns capture these queries. The display impression made your brand name familiar, increasing CTR on your search ads versus competitors they have never heard of.
Mid-funnel — Display remarketing. Visitors who clicked a search ad but did not buy see display remarketing ads across the web. Dynamic remarketing shows them the exact products they viewed. This keeps your brand present during the consideration phase without requiring another search.
Bottom of funnel — Search branded. After multiple touchpoints — a display ad, a search click, a remarketing banner — the buyer searches your brand name directly. Branded search campaigns close this conversion at the lowest CPA in your account, typically $5–15 for ecommerce.
The compounding effect: every dollar spent on display prospecting increases the pool of people who will later search for your brand or product. That increased search volume feeds your search campaigns. The search campaigns generate site visitors who feed your remarketing lists. The remarketing converts those visitors into buyers. Each layer makes the others more efficient.
This is the same cross-channel dynamic at work in Google Ads vs Facebook Ads strategies — the platforms reinforce each other when treated as a system.
How Will AI and Automation Change Search and Display Advertising?
Google's Performance Max campaigns already blur the line between search and display by automatically allocating budget across Search, Display, YouTube, Gmail, and Discover based on real-time signals. By 2026, most ecommerce advertisers use Performance Max for at least part of their spend. The shift reduces manual channel selection but increases the importance of creative inputs and audience signals — because the algorithm optimizes delivery, but you still control the message.
Three trends are reshaping the search-vs-display decision:
1. Performance Max replaces manual allocation. Performance Max campaigns run across all Google surfaces simultaneously. You provide creative assets (text, images, video), audience signals, and a conversion goal. Google's AI decides when to show a search ad versus a display ad versus a YouTube ad for each individual user. This does not eliminate the need to understand search vs display — it shifts the skill from media buying to creative strategy and signal quality.
2. First-party data replaces third-party cookies. As cookie-based tracking degrades, display remarketing relies more on Customer Match (email lists) and Google's logged-in user data. Brands with strong email collection and first-party data will maintain remarketing effectiveness. Brands relying solely on pixel-based audiences will see display performance decline.
3. AI-generated creative scales display. The bottleneck for display advertising has always been creative production — you need dozens of image and video variations to test. AI tools now generate ad creative variations at scale, reducing the cost and time barrier. This makes display prospecting more accessible for smaller brands that previously could not afford the creative volume.
The strategic implication: understanding when to deploy search versus display messaging remains critical even as automation handles the delivery mechanics. The machine needs high-quality inputs. Knowing that a prospecting audience needs awareness-stage creative while a remarketing audience needs urgency-stage creative is a human decision that determines whether the algorithm succeeds or fails.
Frequently Asked Questions
Are search ads more expensive than display ads?
On a per-click basis, yes. Search ads cost $1.16–$2.69 per click for ecommerce, while display ads cost $0.30–$0.70. But cost per acquisition tells a different story. Search clicks convert at 3–4x the rate of display clicks, which means the cost to acquire an actual customer is often comparable or lower on search. The cheapest acquisition channel depends on your product, audience, and creative quality. Model your specific numbers with a CPC calculator.
Can I run search and display ads in the same campaign?
Google's Performance Max campaigns run across both search and display inventory automatically. However, most experienced advertisers still run dedicated Search campaigns and dedicated Display campaigns separately to maintain control over budgets, bidding, and reporting. Separating them lets you set different CPA targets for each channel and prevents display impressions from consuming budget meant for high-intent search clicks.
How do I know if my display ads are actually working?
Do not judge display ads by last-click conversions alone. Check view-through conversions (users who saw your display ad, did not click, but later converted through another channel), assisted conversions in Google Analytics, and lift in branded search volume. If branded searches increase proportionally with display spend, your display campaigns are generating demand that search campaigns then capture.
Should I start with search ads or display ads?
Start with search ads if your product category has existing search demand (500+ monthly searches for core terms). Start with display ads only if you are launching a product nobody has heard of or entering a market where search volume does not exist yet. Most ecommerce brands should launch search first, add display remarketing within the first month, and layer in display prospecting once search campaigns are profitable.
What is the minimum budget to test both ad types?
Allocate at least $30–50/day for search and $15–25/day for display remarketing. Run for a minimum of 30 days to gather meaningful data. Total minimum test budget: $1,350–$2,250 for a single month. Underfunding either channel produces unreliable data and premature conclusions. Scale budget toward whichever channel shows stronger marginal returns after the initial test period.
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