Dec 17 2022
Basis Technologies

What is the Difference Between Paid Search and Display Advertising?


In the world of digital media, there are many different channels and tactics available to advertisers today. Each brings their own value and opportunity, as well as complexities. Two of the most commonly used channels are programmatic display advertising and paid search advertising. Advertisers often focus their efforts and budgets here, as both channels are well established, with a history of proven results.

Paid Search vs. Display Advertising

According to eMarketer, paid search ad spending is expected to continue growing in coming years. Paid search is estimated to make up 29.5% of overall digital ad spending in 2023, and over $136 billion dollars in the U.S. alone by 2026.

It’s important to note, however, that the rate of entry for net new advertisers to this channel is quite low. Rather, most advertisers are established in the paid search space and continue to find real value in performance as evidenced by advertisers’ continued investment.

How is search sustaining YoY growth? Paid search continues to evolve along with the digital media industry as a whole. The last two decades have brought forth many advances in paid search—including updates to ad formats and layouts, targeting tactics, and capabilities.

Paid Search and Machine Learning

One of the most recent enhancements is the power of machine learning through expanded bidding strategies, audience-based targeting, and responsive search ad formats. The introduction of machine learning in paid search has proven to be extremely valuable and allows for personalization and relevance at scale.

You may be thinking to yourself, "Audience-based targeting and machine learning must be similar to programmatic display." And you’re right—they are! Both channels are based on real-time bidding and go well beyond the KPI of driving traffic.

Instead, they drive performance with remarketing and look-a-like targeting. Additionally, both can scale. If you’re an advertiser with a limited budget, consider the targeting definitions—audiences, geography, or keywords—to ensure the budget aligns with the demand.

Differences Between Paid Search and Programmatic Display Ads

While there are similarities between programmatic display advertising and paid search, understanding the difference between the two and when it makes sense to use one and/or the other, can lead to more robust, strategic, and successful media plans.

Programmatic display advertising and paid search are inherently different in how they operate. Display advertising provides the opportunity to cast a wide net, proactively reaching people across the web, in more of a "push" approach. Display advertising is often thought of as the go-to media channel for building brand awareness, and usually considered an upper-funnel tactic. Impressions hold high value.

Paid search, on the other hand, uses a "pull" approach, with consumers searching for your product or service directly. Paid search is driven by intent only and plays a key role in targeting hand-raisers, requiring advertisers only pay for clicks. For this reason, clicks hold more value than impressions. This key difference is the driving force behind the power of paid search and the value it brings to advertisers.

Knowing that paid search operates as a pull approach, it is unique in the way that advertisers can reach an audience in the moments that matter most: ideally, when a user is raising their hand to inquire further about a product or service.

Despite the common misconception that paid search is solely a low-funnel tactic, with the right strategy and campaign set-up, advertisers can reach an audience at any stage of the consumer journey or media funnel. Whether a consumer is just beginning their research using non-branded keywords, or already ready to convert and using a branded keyword, a strategic, well-built paid search account can create touchpoints throughout the entire consumer journey.

Paid search drives results for various campaign objectives, or KPIs. Whether the goal is to generate leads, sales, phone calls, in-store visits, or other custom actions, the immediacy of results and the opportunity to optimize quickly is extremely valuable in paid search.

Advertisers may notice results within hours after launch and (depending on scale) may begin making optimizations early on, in order to drive efficiencies. Testing strategies are easily deployed within paid search campaigns to better understand several factors that drive campaign performance.

Advertisers are likely to test ad copy, bidding strategies, audience search trends (days of the week or hours of the day), and more. Paid search is not a set-it-and-forget-it channel. Instead, it requires ongoing optimizations, which in turn provide strong results.

Using Paid Search Along with Display Ads

While paid search is not as wide-reaching as display advertising, it allows advertisers the opportunity to maximize their returns by utilizing a combination of machine learning and human intelligence to reach  audiences. Studies show that programmatic display advertising, partnered with paid search, provides powerful results and an overall performance lift.

Marketers commonly lean on attribution tools to measure how clicks from search and display advertising work together to drive performance and compare effectiveness across both channels. Tools such as Skai, Google’s Search Ads 360, or even Facebook’s Attribution Measurement Tool help de-duplicate conversions across search, display, and other ad platforms.

At Basis Technologies, we don’t recommend using one channel over the other. Tweak your strategy and shared learnings between the two, particularly around audiences and messaging—and you’ll have the optimal tool to drive success!

Learn more about Display Advertising with Basis Technologies