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Do Search Ads Work?

Apr 5, 2017
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Do search ads work? Do they really drive more business to the companies who use them? Google generates more than $45 billion in revenue from search ads each year. But what is the ROI for the businesses spending their marketing budget on search ads? According to data from Accenture, digital media now accounts for 41% of large companies’ ad spend and is expected to exceed 50% by 2018. As more and more companies lean on digital to drive their business, marking sure it works is extremely important.
Before we dive into the metrics of search ads, we need to set them apart from other forms of digital advertising. The two most prominent forms of digital ads are search and display. Let’s look at the differences. 
 

Search Ads

 
Search ads are a type of paid advertising, commonly known as pay-per-click advertising or PPC, that typically displays at the top and bottom of search engines. Search advertising is used to directly target people who are searching for specific answers within a search engine.
 

Display Ads

 
Display ads, commonly known as banner ads, are shown to your target audience whenever they are surfing online, but not searching for your product or service. Social ads fall into this category as well. 
 
These two types of ads serve very different purposes. Display ads are commonly used to expand reach, grow brand awareness and influence social channels. Search ads, on the other hand, are focused on reaching the searcher directly where they are looking for answers. 
 

But Do They Work? 

 
The biggest issues I’ve seen when it comes to effective search engine marketing is the misunderstanding of search. Many people who are doing their own ad management create ads that are intrusive or irrelevant. Creating search ad copy is very similar to creating page titles and descriptions. The users searching for answers don’t want to see pushy advertisements, they want help! Check out this article from Wordstream to see what really bad ads look like. 
 
When you create messaging that speaks to your audience's pain points and solves the problems they are having, search ads can actually work very well. The great thing about digital ads is that you can measure the effectiveness of them much more accurately than traditional ads. You can see trends and make decisions based on real user data. For instance, the average click-through rate on AdWords paid search ads is about 2%. So optimizing your ads to hit this mark, or better yet exceed it, can result in more sales. 
 

Here are a few statistics you can’t ignore: 

 
  • Eighty-five percent of retailers surveyed said search marketing (including paid and SEO) was the most effective customer acquisition tactic
  • Nineteen percent of brand marketers expect to significantly increase their paid search investments next year. 
  • Search Advertising, at an average annual growth rate of 9.4%, is expected to reach a total market size of US$142.5 billion in 2021. 
  • Global Search Advertising market volume was about US$90.7 billion in 2016.
  • Search Advertising, at an average annual growth rate of 9.4%, is expected to reach a total market size of US$142.5 billion in 2021.
 
Read more stats in this post from Iron Paper. 
 

What About Other Platforms? 

 
Search ads are not exclusive to search engines themselves. Local directories, such as Yelp, also sell search ads. To test the effectiveness of their own search ads, Yelp allowed researchers to perform a test of their ads to see their results. They had to agree to allow the researchers to publish their findings no matter what. A bold move in my opinion. Yelp’s Senior VP for Business Operations made a great statement about the experiment. “Don’t shy away having your product or service scrutinized by third-party research and review sites. If some results are poor, you’ve done your company a favor by drawing attention to a problem your team can now tackle.”
 
So what did the researchers find? They found that while they ran the ads for certain businesses, their Yelp pages got 22% more desktop browsers, 30% more on mobile and an average increase of 25% across all devices. Users also requested directions 18% more, made 13% more calls and clicked through to the businesses website 9% more. When they stopped the ads, the differences disappeared. They concluded Yelp's ads were helpful to businesses that typically don’t advertise because it gives them more exposure to users. Read more about this experiment in this HBR article.
 
So, what we see from research and feedback from the industry is that yes, search ads do work. But you need to create relevant ads that match or exceed the searchers' expectations and intentions. Focus on solving problems and positioning your company's products and services as the best solution. 
 
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Ryan Shelley, CPBI

By Ryan Shelley, CPBI

Ryan is passionate about helping companies make a more personal connection online with their customers and prospects. He is a regular contributor to Search Engine Land, the largest and most popular SEO news site on the web. His works have also been featured on the HubSpot Blog, Business2Community and by LinkedIn Marketing Solutions.

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