Search Ads: Ultimate Guide to Search Advertising

Search Ads: Ultimate Guide to Search Advertising
Article by DesignRush DesignRush
Last Updated: November 30, 2022

53% of people turn to the internet to research about products before purchasing to make sure they’re making the right decision.

Considering this important statistic, companies began incorporating search advertising campaigns into their marketing initiatives.

Ads on search engines, or simply search ads, target the exact keywords consumers enter, increasing the traffic on business websites and bringing a high conversion probability.

As one of the most effective marketing methods, search ads generated $84.7 billion in revenue to search engine platforms in 2021 in the U.S. market only.

Since consumers tend to shop more than ever, search ads are an excellent opportunity for growing businesses of all kinds.

This article will introduce everything you should know to start a search advertising campaign.

Let’s start.

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What Are Search Ads?

Search advertising, also called Google advertising and paid search advertising, falls under the umbrella of search engine marketing (SEM).

Whenever users perform a search on Google or any other search engine, it will display sponsored and organic search results in a fraction of a second.

The sponsored search results are the search ads.

Google usually displays search ads on the top or the bottom of search engine result pages (SERP). They are labeled with a little green square saying “Ad” on the left.

3 Main Search Ad Components

Each search ad has three main elements: headline, URL address and description text. These three elements aim for the same goal — to convince a user to click on the ad.

1. Headline

Headlines attract the most attention; therefore, they should be appealing, convincing and relevant to the search query. Optimize headlines with keywords to draw the audience most likely to convert. If possible, include a call to action (CTA) in the headline text.

Google and Bing allow entering two headlines with a maximum length of 30 characters. Yahoo allows you to choose only one headline, but significantly longer — up to 50 characters.

2. The URL Address

The URL is placed directly underneath your ad’s headline and provides users with your website address and a clue on which landing page they will end up on if they click on your ad.

The URL is colored in green and can be up to 35 characters long. On all search engine advertising platforms, except for Bing, where it is shown as bold, the URL component has the same characteristics.

3. Description Text

Description text should provide enough convincing reasons for users to click on your ad. The reader should get a clear image of the benefits advertised products or services deliver.

Google and Bing limit description text to 80 characters, while Yahoo offers almost twice as much: 150! Also, Yahoo includes two predefined CTAs under description text that begins with “Learn more about” and “Read more.”

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How Does Search Advertisement Work?

Search ads work on a pay-per-click (PPC) principle, an auction-based advertising model.

Every time a user clicks on the ad, the business pays a predefined fee. The placement, frequency of appearing in SERP, and the price depend on the bid and quality score.

Here is how bidding functions:

  • Advertisers decide the maximum amount they are willing to spend for a click (bid) and the total amount for the entire advertising campaign (budget).
  • Once the bidding is over and all companies that compete for the exact keywords have entered their offers, the search engine advertising platform calculates the quality score, which determines positioning.

As you can see, search ads are highly cost-effective. Businesses pay only when users click on their ad — not for an impression but for a real conversion chance.

Search Ads Formats

Search ads are available in several formats:

Text Ads

Text ads are the primary and most common search ad type.

They consist of the headline, URL address and short description.

Text Ads With Ad Extensions

Text ads with extensions contain additional information about your company besides the main textual content.

Extensions can contain call or message buttons, location directions, links to relevant web pages, prices, lead forms or other important information.

Dynamic Search Ads

Dynamic search ads are the most advanced search ad types since they use artificial intelligence (AI) to automatically generate ad components using your website content.

Dynamic search advertisement incorporates all relevant keywords for your niche (even those you might choose to omit). All you have to do is create an ad description — AI will take care of the rest.

Product Shopping Ads

Product shopping ads respond to users' shopping intent directed to one or more of your products. It displays to highly-qualified leads, ready to make a purchase.

Product-oriented ads show the title, product image, price and your company’s name.

Showcase Shopping Ads

Showcase shopping ads are extended product shopping ads.

Instead of showing one product’s specifications, they group related products and allow users to browse a wider variety of your offerings. You can choose which products will appear under the same ad when creating a showcase.

Call-Only Ads

Reserved for mobile search results, call-only ads have all characteristics of text ads. However, instead of leading to a landing page like other types of search ads, call-only ads encourage users to call your company.

App Promotion Ads

If your goal is to promote an app on search engines, Google Play Store or YouTube, app promotion ads are the right choice for you.

Depending on your goals, you can choose between three subtypes of app promotion ads:

  • App installs
  • App engagement
  • App pre-registration

Best Platforms for Search Advertising

Most search engine platforms provide search advertising. Google offers Google Ads, Bing has Microsoft Ads, and Yahoo delivers Native Advertising.

Let's take a look at search engine market share worldwide in 2022:

  • Google - 92.37%
  • Bing - 3.57%
  • Yahoo - 1.31%
  • Yandex - 0.82%
  • DuckDuckGo - 0.61%
  • Baidu - 0.58%

It’s not surprising that Google generates the most traffic of all search engines, but that doesn't mean it should be the only platform you advertise on. A combined approach, which includes other search engines, could bring you the most success.

For example, 40.59% of Bing users come from China. At the same time, Yandex is the most utilized search engine in Russia and countries that belong to the former Soviet Union.

5 Key Metrics to Measure the Success of Your Search Advertising Campaign

One of the main benefits of search ads is that they bring almost instant results.

With an adequate PPC strategy, you will notice an increase in traffic and sales shortly after your ad starts running.

Monitoring key metrics can give you valuable insight into your ad’s performance. Once you know what’s bringing results (and what is not), you can adjust and optimize your advertising campaign to its maximum potential.

Here are the most important search ad metrics you should track:

1. Click-Through Rate (CTR)

The CTR is one of the most commonly used metrics for PPC reporting. It shows the number of visitors who clicked on your search ad and ended up on your landing page. Those visitors are considered to be interested parties, aka leads.

To calculate CTR:

Clicks ÷ Impressions = CTR

Dividing the number of actual clicks on your ad by the number of times the ad is displayed gives the total CTR.

Average CTR depends on many factors, including keyword difficulty and the industry. However, the average CTR for search ads across all industries is 1.91%.

CTR shows how well you designed your search ad. If it is high, you’re doing a good job. If it is low, adjust your ad’s headline, targeted keywords, ad copy or CTA (or all of these factors).

2. Conversion Rate

Conversion rate shows how many leads followed your CTA and performed the desired action on your landing page, whether it is a purchase, subscribing to your newsletter list or completing a survey.

To calculate the conversion rate:

  • Total conversions ÷ total interactions = CR
  • Divide the total number of conversions by the total ad interactions to determine conversion rate.
  • High CTR and low conversion rate indicate your ad is attracting unqualified leads; therefore, you should improve audience targeting.

3. Cost-per-Action (CPA)

CPA is the total cost you pay every time a user follows your CTA and performs the desired action on your landing page. It is a cost for one conversion, regardless of its type.

CPA is an important metric because it shows the ratio between the money you’re investing and the money you’re earning — aka, return on investment (ROI) on your advertising campaign.

4. Quality Score

Google defines quality score as “an estimate of the quality of your ads, keywords, and landing pages. Higher quality ads can lead to lower prices and better ad positions.”

Three important components determine the quality score your ad will get:

  • Click-through rate
  • Ad relevance
  • Landing page experience

The quality score can range on a scale from 1 to 10 and it gives valuable insights into your ad’s performance:

  • Quality score of 1 to 5 shows your ad is underperforming compared to competitor ads, and there is a small probability that it will appear in search results when the keyword matches the user's query. If three quality score components rate below average, your quality score will be rated five or lower.
  • Quality score of 6 indicates ad keyword is competitive, but it performs averagely compared to other keywords that target the same traffic. If quality score components rate average or below average, the final score will probably be six.
  • Quality score of 7 to 10 shows your keyword is very competitive and you’re getting higher CTR than other keywords that target the same traffic. If all three quality score components are above average, your final score will be seven or higher.

To improve your quality score, follow these practices:

Make sure the ad’s headline and description are relevant to the searcher's intent.

  • Optimize the landing page and make it responsive for different devices.
  • Create appealing ad copy and CTA.
  • Use negative keywords to avoid unqualified leads.

5. Wasted Spend

You don't want to see wasted spend in your search advertising campaigns. It shows the amount of money you wasted on clicks that didn't convert.

If wasted spending is high, consider changing the target audience, ad copy and keywords. Keep adjusting your campaign until you find the formula that brings success.

Search Ads: Final Word

The first search result page on Google gets between 71 and 92% of all web traffic, and your search ads could be among those results.

Search advertising is an effective and diverse SEM strategy that can help grow your business, regardless of its niche and size.

You can advertise on different search engine platforms using various types and formats of search ads.

Monitoring key metrics will provide valuable insights into your audience’s online behavior and the effectiveness of your strategy. You’ll be able to adjust it until you reach high-qualified prospects and accomplish your business goals.

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