What Is Paid Search Advertising?

August 14


What Is Paid Search Advertising?

By Hanson Cheng

August 14, 2023

  • minute read
  • Last Updated on August 14, 2023 by Hanson Cheng

    Paid search advertising, also known as search engine marketing (SEM), is a form of digital advertising in which advertisers create ads that appear within search engine results pages (SERPs) for specific search queries. These ads typically appear at the top or bottom of the page, and are identified as “sponsored” or “ad” content.

    Paid search advertising allows businesses to reach their target audience by targeting specific keywords and demographics, and only paying when a user clicks on their ad. This method of advertising has proven to be highly effective, with over 70% of visitors who click on paid ads converting into customers. In this article, we will explore the ins and outs of paid search advertising and how it can benefit your business.



    Paid search advertising, also called pay-per-click (PPC) advertising, is an approach used by marketers to direct targeted traffic to their websites. In this advertising model, the marketer places ads on a search engine results page (SERP) and pays each time a user clicks on the ad. Paid search advertising is designed to serve the needs of both advertisers and users. For marketers, it’s a way to reach a specific audience at the right time and place. For users, it can be a valuable tool to find the products and services they need quickly and efficiently.

    Paid search advertising is typically used by businesses of all sizes, from small startups to large corporations, to drive traffic to their websites, generate leads, and increase sales. The success of a paid search advertising campaign depends on a variety of factors, including keyword selection, ad placement, and bid amount. A successful paid search advertising campaign can help businesses achieve their marketing goals and increase their return on investment (ROI).


    As one of the oldest forms of digital marketing, paid search advertising has an extensive history tracing back to the mid-1990s. In the early days, paid search advertising was referred to as contextual advertising, which involved displaying ads based on the content of the website being viewed. However, it wasn’t until the launch of Google AdWords in 2000 that paid search advertising gained widespread popularity.

    AdWords demonstrated the effectiveness of search-based advertising by providing a platform for businesses to bid on specific keywords and phrases, placing ads at the top and bottom of search engine results pages. As Google’s dominance over the search engine market grew, so did its influence on paid search advertising. In 2019, Google held over 92% of the market share for search engines, making it the go-to platform for paid search advertising.

    However, competitors such as Bing and Yahoo have attempted to challenge Google’s dominance. Over the years, paid search advertising has evolved to include a wide range of features, such as ad extensions, remarketing, and real-time bidding. As technology continues to evolve, so too does paid search advertising. Advertisers are now able to use machine learning and AI technologies to optimize their ad campaigns, making it easier than ever to reach a highly targeted audience.


    As digital marketing continues to evolve, paid search advertising has become increasingly vital for businesses of all sizes and across all industries. Paid search advertising, also known as pay-per-click (PPC) advertising, is a marketing tactic in which companies pay to have their ads appear at the top of search engine results pages (SERPs) for specific keywords and phrases. What makes paid search advertising so important is its ability to drive targeted traffic to a business’s website.

    By appearing at the top of SERPs, businesses are able to reach potential customers at the exact moment they are searching for relevant information or products. Additionally, paid search advertising is highly measurable, allowing businesses to accurately track their return on investment and adjust their strategies accordingly.

    Another reason why paid search advertising is crucial is its ability to complement other digital marketing efforts. While search engine optimization (SEO) is an important long-term strategy for improving organic search rankings, it can take months or even years to see results. With paid search advertising, businesses can see immediate results and use it to supplement their SEO efforts. Furthermore, paid search advertising allows businesses to target specific demographics, geographic areas, and even times of day, providing unparalleled flexibility and control over their ads.

    In today’s highly competitive digital landscape, businesses simply cannot afford to ignore paid search advertising. It offers a cost-effective and efficient way to reach potential customers, and with the right strategy, can yield impressive results for businesses of all sizes and industries.


    Using paid search advertising is an effective way to attract customers to your business, increase brand awareness, and improve your bottom line. One of the biggest benefits of paid search ads is that they are targeted to users who are actively searching for products or services that your business offers, which means they are more likely to convert into paying customers.

    Additionally, paid search advertising provides measurable results, allowing you to track the success of your campaigns and make data-driven decisions to optimize them. Another advantage of paid search ads is their flexibility, as you can adjust your campaigns in real-time based on their performance or changes in your business. Furthermore, paid search campaigns can be customized to fit any budget, allowing businesses of all sizes to compete for clicks and conversions.

    Finally, paid search advertising is a cost-effective way to reach new customers and promote your products or services, as you only pay for clicks or impressions, making it easier to manage your advertising spend. In conclusion, paid search advertising offers numerous benefits for businesses looking to reach their target audience and increase their online visibility and revenue.


    While paid search advertising has many benefits, it also has its drawbacks. One of the biggest drawbacks of paid search advertising is the potential for overspending. This is especially true for businesses that are new to paid search advertising and don’t have a lot of experience in setting budgets and bids. Another drawback is the constant need to monitor and adjust campaigns to ensure that they’re performing well.

    This can be time-consuming and requires a lot of expertise. Additionally, paid search advertising can be quite competitive, and businesses may find themselves struggling to keep up with competitors who have more resources to devote to their campaigns. Finally, paid search advertising may not be suitable for all businesses, particularly those that are targeting very specific demographics or niche markets. For these businesses, other forms of advertising may be more effective.

    Types Of Paid Search Advertising

    Search Ads

    One of the most popular forms of paid search advertising is through search ads. Search ads are the ads that appear at the top of the search engine results page (SERP) when a user enters a query that matches the keywords that an advertiser has bid on. Search ads are keyword-driven, meaning that the advertiser must select specific keywords that they want their ads to show up for. When a user types in a search term that matches the advertiser’s keywords, the ad is eligible to appear.

    Search ads typically come in the form of text-based ads. These ads show up as the first results on the SERP, even before the organic search results. Search ads typically have a headline, description, and display URL. The headline is the first thing that users see and features the advertiser’s business name or keyword. The description provides more details about the product or service being offered. Finally, the display URL is the website address that the user will be taken to upon clicking the ad.

    Search ads are effective because they allow advertisers to target users who are actively searching for products or services that the advertiser offers. This means that the user is already in the consideration stage of the purchasing process, and the search ads serve as a way to capture their attention and direct them to the advertiser’s website. Additionally, search ads are a cost-effective means of advertising because advertisers only pay when a user clicks on their ad, meaning that they aren’t wasting money on clicks that don’t result in conversions.

    To optimize search ads, advertisers must focus on selecting the right keywords to target, writing compelling headlines and descriptions, and making sure that their landing pages offer a seamless user experience. By doing so, advertisers can ensure that their search ads are appealing to users and effectively driving conversions.

    Display Ads

    One of the most popular forms of paid search advertising includes display ads, which are graphical advertisements that can be placed on a range of websites and landing pages. These ads can take various forms, including banners, pop-ups, videos, and interactive ads.

    Display ads are a way for businesses to reach their target audience by placing their ads on websites that their target consumers frequently visit. Display advertising has evolved from traditional static banners to dynamic ads that have the ability to showcase personalized offers based on the user’s behavior. These ads are often measured by click-through rates, conversion rates, and impressions, allowing companies to analyze their campaigns and make appropriate changes to optimize performance.

    Display ads can be targeted based on various factors including demographics such as age, gender, location, interests, and behaviors. Some popular platforms for displaying ads include Google Display Network, Facebook, and LinkedIn. Google Display Network is a comprehensive platform that allows advertisers to display their ads across millions of websites, ranging from news sites to blogs to e-commerce websites. Facebook and LinkedIn also offer display ad options, with Facebook providing detailed targeting based on user behavior and demographics. LinkedIn, on the other hand, allows businesses to target their ads based on users’ job titles, companies, and industries.

    One of the significant benefits of display ads is their high-level targeting capabilities, allowing businesses to reach their most relevant audience easily. Display ads can also boost brand awareness, as they can be visually appealing and memorable as they are placed on high-traffic websites. With increasing competition in the digital industry, display ads are becoming more expensive, but their conversion rates and return on investment justify the cost for most businesses.

    In conclusion, display ads are a valuable tool for businesses to reach their target audience by placing their ads on websites and landing pages that their users frequently visit. Display ads have evolved from static banners to dynamic ads that can showcase personalized offers based on the user’s behavior. With their detailed targeting capabilities and measurement tools, businesses can analyze their campaigns and optimize their performances. While display ads are becoming costlier with the increasing competition, the benefits of high conversion rates and return on investment continue to justify their usage for most companies.

    Shopping Ads

    One of the most effective ways to monetize e-commerce efforts is through shopping ads. Also known as product listing ads (PLAs), shopping ads are a type of paid search advertising in which a product image, title, price, and store name are displayed to users. The system of shopping ads is based on the Google Merchant Center, which requires merchants to upload their product catalog and create data feeds in a specific format. The most crucial aspect of any shopping ad campaign is selecting the right keywords and bids to maximize exposure to a target audience.

    Unlike traditional PPC ads, shopping ads are often more appealing and visually engaging because they present products directly to users. Due to the format and placement, shopping ads often occupy a premium location in search results which increases the likelihood of users clicking on them. Shopping ads are unique in that they can drive higher click-through rates (CTRs) and conversion rates than traditional PPC ads.

    The main reason is that shopping ads are tailored to display relevant products based on users’ search queries. As a result, users are more likely to click on shopping ads since they meet their immediate needs. Additionally, shopping ads can be optimized for specific targeting options such as location, demographics, and device type. This feature is instrumental in ensuring that the right product is displayed to the right user at the right time, leading to increased ROI.

    Video Ads

    Among the different types of paid search advertising, video ads play a significant role in connecting with audiences on a deeper level. Video ads enable businesses to communicate their message through engaging, captivating visuals that combine sound, motion, and imagery. These ads are targeted to specific demographics to generate more leads and sales. Video ads are typically posted on platforms like YouTube, Facebook, Twitter, and Instagram.

    They have a higher click-through rate compared to other forms of advertising and are proven to be more effective at driving conversions when combined with landing pages. There are two types of video ads; in-stream ads and discovery ads. In-stream ads are video ads that appear before, during, or after a user watches content. Discovery ads are video ads that appear on the search results page of a platform.

    Both types of ads can be targeted to a particular audience based on location, demographics, interests, and more. Video ads are becoming increasingly popular due to the rise of mobile video consumption, which has made it easier than ever to reach a broad audience. Video ads are a great way to generate brand awareness, showcase products or services, and drive traffic to your website. By using video ads as part of a paid search advertising campaign, businesses can create a more significant impact and reach their target audience more effectively.

    App Ads

    App advertising refers to paid ads that promote mobile applications. App ads appear in various formats such as banners, video ads, and search ads. The purpose of app ads is to encourage users to download or engage with a particular app. Companies with mobile apps can benefit from using app ads to increase their visibility and acquire new users. The success of an app ad campaign is measured by the number of downloads and the engagement rate of the app. Apple Search Ads and Google Ads are two popular platforms for creating and managing app ads.

    One of the benefits of using app ads is the ability to target specific audiences. Mobile app developers can target users based on demographics, interests, and location. This allows app owners to create personalized experiences for different users. App ads can also help mobile app developers to increase app visibility in app stores. By increasing visibility, more users are likely to download the app. Another benefit of app ads is that they can help increase app engagement. By providing a customized experience, users are more likely to interact with the app on a regular basis. This can lead to higher user retention rates, which are important metrics for app success.

    When creating an app ad campaign, it is important to consider the ad format. Banner ads are the most common type of app ad. They are displayed at the top or bottom of the screen and appear in various sizes. Video ads offer a more engaging experience for users. They can be used to showcase key features of the app or demonstrate how it works. Search ads are another type of app ad that allows the app to appear in a search result. This can help increase app visibility and target users who are actively searching for specific apps.

    App ads are becoming increasingly popular as more people use mobile devices. With the right targeting and ad format, companies can increase app downloads and engagement rates. By utilizing platforms such as Apple Search Ads and Google Ads, app owners can create effective campaigns and measure their success. App ads are a valuable tool for any company looking to increase their mobile app presence.

    Social Media Ads

    Social media ads have become an incredibly popular way for businesses to reach their target audience. With the rise of social media platforms like Facebook, Instagram, Twitter, and LinkedIn, these ads have become an effective way to boost brand awareness, generate leads, and drive conversions. The key to success with social media ads lies in targeting the right audience and creating compelling ads that grab their attention.

    Social media advertising allows businesses to be very specific in terms of who they are targeting, allowing for hyper-targeted campaigns that result in higher conversion rates. Additionally, social media advertising offers a range of ad formats including photo ads, video ads, carousel ads, and sponsored posts that can be tailored to fit a company’s specific needs and objectives. Overall, social media advertising is a powerful tool that can help businesses increase their visibility online and drive growth.


    Understanding paid search advertising is crucial for anyone who wants to succeed in digital marketing. It is a form of online advertising that allows you to display ads on search engine results pages. By bidding on specific keywords, businesses can target consumers who are actively searching for their products or services, increasing the chances of conversion. Paid search advertising is not only cost-effective but also provides a measurable return on investment.

    However, it requires a thorough understanding of search engine algorithms and consumer behavior, as well as constant monitoring and optimization. Effective keywords research and ad copy are critical components of any paid search advertising campaign. In addition, landing pages must be carefully designed to ensure that visitors are motivated to take action.

    Paid search advertising is a continually evolving field, with new technologies and strategies emerging every day. Therefore, staying up-to-date with the latest trends and best practices is essential for success. Overall, paid search advertising is a valuable tool for reaching your target audience and increasing brand visibility, but it requires knowledge and expertise to execute effectively.

    What Is Paid Search Advertising: FAQ

    What Is Paid Search Advertising?

    Paid search advertising is a digital marketing strategy that allows businesses to place their ads in front of an audience actively searching for specific keywords. These ads appear at the top of the search results page and are paid per click, making it a cost-effective way to reach a highly targeted audience.

    What Are The Benefits Of Paid Search Advertising?

    Paid search advertising offers several benefits to businesses, including increased visibility, more targeted traffic, and the ability to track and measure campaign performance. It is also highly flexible, allowing businesses to adjust their campaigns in real-time based on performance data.

    How Does Paid Search Advertising Work?

    Paid search advertising operates on a bidding system, where advertisers bid on specific keywords related to their products or services. These keywords trigger their ads, which appear at the top of the search results page when a user enters the keyword into the search engine. Advertisers are charged for each click on their ad, making it a cost-effective way to reach a targeted audience.

    How Much Does Paid Search Advertising Cost?

    The cost of paid search advertising varies depending on several factors, such as industry, competition, and keyword relevance. Advertisers bid on selected keywords, with the highest bidder achieving top ad placement. However, it’s important to note that advertisers only pay when someone clicks on their ad.

    How Do I Create A Successful Paid Search Advertising Campaign?

    To create a successful paid search advertising campaign, businesses should research keywords relevant to their products or services, craft compelling ad copy, and use targeting options to reach a specific audience. They should also continually monitor and optimize their campaigns to improve performance and achieve their marketing goals.

    What Platforms Can I Use For Paid Search Advertising?

    The most popular platforms for paid search advertising are Google Ads and Bing Ads. Google Ads is the largest and most widely used platform, while Bing Ads offers a lower cost per click and can be an excellent alternative for businesses looking to reach a different audience.

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    Hanson Cheng

    About the author

    Living in Portugal with my wife and puppies.
    Scaling online businesses and sharing lessons learned on this website and in our email newsletter.

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