Display Ads vs Search Ads: Which Should Your Small Business Use?
Here is the question we hear constantly from small business owners: “Should I be running Search ads or Display ads?” And almost every time, they have already made up their mind before asking. They are either spending everything on Search because it feels safer, or they tried Display once, saw a terrible click-through rate, and wrote it off entirely.
Both reactions are wrong. Not slightly wrong. Properly, costing-you-money wrong.
Search ads and Display ads are fundamentally different tools designed for different jobs. Comparing them side by side without context is like asking whether a hammer is better than a screwdriver. The answer depends entirely on what you are trying to build.
Let us cut through the noise and give you an honest, practical breakdown of when each format works, what they actually cost, and how smart small businesses use both together.
The Numbers You Need to Know
Before we get into strategy, look at the raw data. These figures represent industry averages across Google Ads, and they tell a clear story about how differently these two ad types perform.
Click-Through Rate
Click-Through Rate
vs Search Ads
Yes, the CTR gap is enormous. Display ads get clicked far less often. But that does not make them worse. It makes them different. Display ads are seen by vastly more people for a fraction of the cost. If you are judging Display purely on CTR, you are measuring the wrong thing.
Search ads cost more per click because people clicking them are actively looking for what you sell. That intent has a price. Display clicks are cheaper because the audience is browsing, not buying – yet. Context matters more than any single metric.
Search Ads vs Display Ads: The Full Comparison
Here is a direct, side-by-side breakdown of how these two ad formats stack up across every factor that matters to your budget and results.
| Factor | Search Ads | Display Ads |
|---|---|---|
| Intent Level | High – user is actively searching | Low to medium – user is browsing content |
| Cost Per Click | £2–£8 average (higher in competitive sectors) | £0.50–£2 average (significantly cheaper) |
| Click-Through Rate | 3.17% average | 0.46% average |
| Conversion Rate | 3–5% average | 0.5–1% average (higher with remarketing) |
| Best For | Capturing demand, driving direct sales and enquiries | Building awareness, remarketing, staying visible |
| Ad Format | Text-based (headlines, descriptions, extensions) | Visual (images, banners, responsive display, video) |
| Audience Stage | Bottom of funnel – ready to act | Top and middle of funnel – discovering and considering |
| Placement | Google search results pages only | Across 35 million+ websites, apps, YouTube and Gmail |
The takeaway is clear. Search ads win on conversion and intent. Display ads win on reach and cost. Neither is universally better, and treating them as interchangeable is one of the most expensive mistakes a small business can make.
When to Use Each: Four Scenarios That Actually Matter
Forget the vague advice. Here are four specific situations and the right call for each one.
Search: Capturing High-Intent Leads
When someone types “emergency plumber near me” or “best accountant for small business,” they are ready to hire. Search ads put you directly in front of people with their wallets out. If you have a service-based business and need leads now, Search is where your first pounds should go. The CPC is higher, but the conversion rate justifies every penny.
Display: Building Brand Awareness
Launching a new product? Entering a new market? Nobody is searching for you yet because they do not know you exist. Display ads let you reach thousands of relevant people across the web for a fraction of what Search would cost. You are planting seeds. The clicks will come later, but the impressions start working immediately.
Display: Remarketing to Warm Audiences
This is where Display advertising truly shines. Someone visited your site but did not convert? Remarketing display ads follow them across the web, keeping your brand front and centre. Remarketing display campaigns routinely see conversion rates 2-3x higher than standard Display. It is the cheapest way to recapture lost leads, and every small business should be running it.
Both: Full-Funnel Strategy
The businesses that grow fastest use both formats together in a deliberate system. Display at the top attracts and educates. Search at the bottom converts. Remarketing display bridges the gap. This is not about doubling your budget. It is about making every pound work harder by meeting customers at every stage of their decision.
Why Most Small Businesses Get This Wrong
The biggest mistake we see is judging both ad types by the same KPIs. A business owner runs Display ads, sees a 0.4% CTR, panics, and kills the campaign. Meanwhile, they have no idea that those Display impressions made their Search ads convert 20% better because prospects recognised the brand.
Google’s own research shows that Display advertising increases branded search volume by up to 30%. People who see your Display ads are more likely to search for you by name later. When they do, your Search ads pick them up at a fraction of the competition’s CPC because branded search is cheap.
The second mistake is running Display with the wrong targeting. Broad, untargeted Display campaigns are a money pit. But tightly targeted Display – using custom audiences, in-market segments, or remarketing lists – performs like a completely different channel. The targeting is the strategy.
What About Performance Max?
Yes, Google keeps pushing Performance Max campaigns that blend Search and Display automatically. And yes, they can work. But here is our honest take: for small businesses with limited budgets, you lose too much control. You cannot see what is performing where, and Google’s algorithm optimises for its own revenue as much as your results.
We prefer running Search and Display as separate campaigns with clear budgets and distinct goals. You get better data, better optimisation levers, and you actually understand what is driving results. Transparency matters when every pound counts.
The Smart Budget Split
There is no universal formula, but after managing hundreds of small business accounts, here is the framework we come back to again and again:
- New businesses (under 12 months): 70% Search, 20% Display remarketing, 10% Display prospecting. You need conversions to survive, so Search gets the lion’s share. But start building remarketing audiences from day one.
- Established businesses (growth phase): 50% Search, 25% Display remarketing, 25% Display prospecting. You have proven your offer converts. Now it is time to pour fuel on the top of the funnel and increase your reach.
- Competitive or saturated markets: 40% Search, 30% Display remarketing, 30% Display prospecting. When Search CPCs are brutal, Display becomes your pressure release valve. Build familiarity cheaply, then convert through branded Search at lower cost.
The golden rule: never allocate 100% to either channel. Even a small Display remarketing budget of £5 per day can dramatically improve your overall return. Cutting it to zero is almost always a false economy.
The Metrics That Actually Matter
Stop comparing apples to oranges. Measure each channel by what it is designed to do:
- Search Ads: Track cost per conversion, conversion rate, return on ad spend (ROAS), and impression share. These are your bottom-line numbers.
- Display Prospecting: Track cost per thousand impressions (CPM), reach, frequency, and view-through conversions. If you only look at last-click conversions, you will always undervalue Display.
- Display Remarketing: Track conversion rate, cost per conversion, and return visitor rate. This should be your highest-performing Display segment by a wide margin.
View-through conversions are the metric most small businesses ignore entirely. Someone sees your Display ad, does not click it, but later visits your site and converts. Google tracks this, and the numbers are often significant. If you are not reviewing view-through data, you are flying blind on half your ad spend.
The Verdict: Use Both, But Use Them Properly
Search and Display are not competitors. They are partners. The businesses winning on Google Ads in 2026 run both formats with clear roles, distinct budgets, and proper attribution. If you are ready to build a Google Ads strategy that actually makes sense for your budget, DPOM can help.
