Display Ads, Search Ads, and Social Media Ads: Pros and Cons

By Evan LePage

Social

Image by Yuya Sekiguchi under CC BY 2.0
Image by Yuya Sekiguchi under CC BY 2.0

In 2014, global internet advertising spend reached $133 billion. In the United States, online ad spend is expected to surpass television spend by next year. Internet advertising is already the second most popular advertising channel in the world, and growing. If you don’t start capitalizing on this trend, you may risk missing out on valuable advertising opportunities.

All of that advertising budget doesn’t fall onto one format, however. This money is split between a number of digital ad types and channels. With the launch of our new ads product, we’ve been thinking a lot about how our customers are spending their paid media budgets. The three most common types are display ads, search ads, and social media ads. Each has its own advantages and disadvantages, but the key to getting the most bang for your buck is really to test out the platforms and find the one which best meets your unique business and goals. You might end up using all three.

If you’re unsure of where to allocate your budget, we’ve broken down the pros and cons of each internet advertising format below:

Display ads

An example of a display ad on the Huffington Post website
An example of a display ad on the Huffington Post website

Overview

If you don’t use an ad blocker, or remember a time before it existed, you’ve probably been exposed to thousands of display ads. These advertisements appear above, below, alongside and even in the middle of webpage content, and are found across every imaginable style and type of website. Display ads actually reach over 90 percent of internet users worldwide, whether they want to see them or not.

Strengths

Wide-reaching

From websites, to apps, to email, display ads have found a place into almost every online property. Their reach is astounding: Google’s Display Network reaches over 2 million websites. This makes them a popular decision for brand building, since display ads align well with a goal of getting your name in front of as many people as possible.

Less competition

Due to their prevalence, display ads aren’t such a competitive format. You’re not competing for air time, or for specific search pages, or for a prime slot on a much-talked about hashtag; you’re simply building an ad with mass appeal and trusting Google (or other display ad hosts, but let’s be honest) to get it out into the world.

Flexible

Display ads have the advantage of being fairly flexible, in terms of style and format. While you might be limited by the space allocated to the ads, display ads can come as videos, images, gifs, interactives, games and text. They can also be flashy and fun or serious and unimposing—that’s up to you. This flexibility, and the very visual nature of display ads, is a definite advantage, especially as visuals come to dominate text online. Wordstream claims that text-only display ads can actually increase costs by 381 percent compared to higher quality visual ads—not an insignificant number.

Weaknesses

Lack of reputation management

With display ads, you’re not always in control of where your ads appear. This has, on occasion, resulted in very awkward and even damaging situations for brands. While this is a rare occurrence, this lack of control is too much for some brands to risk.

 Ouch. Image via E-consultancy.
Ouch. Image via E-consultancy.

Widely ignored

The truth is, most people ignore display ads. After years of overexposure, they’ve faded into the background, going unnoticed and un-clicked by the vast majority of internet users. The average display ad click-through rate is 0.06 percent. People like to quote statistics that say you’re more likely to scale Mount Everest, survive a plane crash or complete Navy SEAL training than click a banner ad. Whether or not that’s entirely accurate, you get the point.

Association with spam

Another downside to display ads is that they’ve earned a bad reputation as spammy nuisances, offering little to no value. Many internet users even equate display ads with spam, especially the ads that autoplay or force you to close them in order to proceed. In 2011, a study found that 84 percent of 25 to 34-year-olds have left a favorite website because of intrusive or irrelevant advertising. For brands selling video games or energy drinks, this may not be a problem, but many businesses won’t want that sentiment associated with their brand.

Summary

The reach of display ads is near endless, and that means you won’t have to worry too much about competition. What you do have to worry about is wasting your money—not to mention the growth of ad-block plugins. No matter how strong your ad is, it won’t make an impact if people are literally blocking it from their pages.

Search ads

 Search ads above and below a Google search
Search ads above and below a Google search

Overview

How many times a day do you Google something? Google now processes over 40,000 search queries every second on average, which translates to over 3.5 billion searches per day and 1.2 trillion searches per year worldwide. Search ads, the most common form of PPC (pay per click) advertising, look to capitalize on that incredible traffic. They appear either at the top or on the side of your Google search results, and are usually placed based on how related they are to the results of a specific search query. Forrester expects search ads to benefit the most from growing ad budgets over the next few years, which is largely thanks to the following strengths.

Strengths

Quality of leads, conversion

People who land on your search ads actually sought out the subject matter in question. You’re not trying to take someone’s attention away from their current activity, but injecting your content into that activity. They went looking for something and you’re doing your best to provide it, or at least something reasonably close to it. In marketing speak, you’re essentially capturing people in the later stages of the buying process.

In this way, search ads drive qualified leads and conversions, since people are more responsive to ads for content they’re actually looking for. If you’re buying a new apartment, you might actually flip through that Ikea flyer you usually toss in the recycling.

Simplicity

Most search ads are text online, and are very restrictive in terms of style and character count. While many might say that’s limiting, it’s also very simple. Google provides templates that advertisers can simply fill in with their copy. Ease of use is a huge factor for online advertisers, especially those who are just getting into the game. The simplicity of search ads is, in that way, a huge plus.

Weaknesses

Price

Search ads can be very competitive, and the cost of these ads will vary entirely depending on your competition. The average cost-per-click of search ads on Google AdWords is between one and two dollars. Depending on your industry, you may spend anywhere from 70 cents to five dollars per click (up to $60 for the most expensive keywords). That’s important to consider: you’re paying for clicks. If you get 100 clicks that don’t lead to sales, you’re quickly losing money. The average small business using AdWords for search ads will spend between $100,000 and $120,000 per year. The price forces many small businesses to look for alternatives.

Non-visual

As more and more businesses are turning their attention towards visual content on social networks like Instagram and Pinterest, search ads force them in the opposite direction. Search ads are very non-visual, and the only noteworthy image is a little yellow tab that marks them as an “ad.” That makes it tough to stand out and catch the eye of any prospects. I mean, which of the following two ads are you more likely to share?

USB Mac Hub Search Ad

USB Mac Hub Display Ad

No broad appeal

Search ads are built to target a specific audience, which is great for granular campaigns or niche services. But if you’re trying to attract a new audience to your brand, and build something with wide appeal or viral potential, search ads just won’t fit the bill. The best, most-talked about ads today are those that are shareable, especially on social media, and search ads lack nearly all the qualities expected from shareable content.

Summary

Search ads are a source of high-quality leads, since everyone that sees your ad will have been actively searching for information that you can then provide. These ads are also very simple, but that can be a weakness since they’re non-visual and don’t have the broad appeal that makes certain ads resonate in today’s social media world. Plus, search ads also suffer from the AdBlock syndrome.

Social media ads

 A look at a typical Promoted Tweet within the Twitter stream
A look at a typical Promoted Tweet within the Twitter stream

Overview

Advertisers spent $5.1 billion on social media advertising in 2013. Although this is still just a chunk of advertising spend, this figure is expected to exceed $14 billion by 2018. In the third quarter of 2014, Facebook brought in $2.96 billion in advertising revenue, 66 percent of which came from mobile ads. Twitter generated 85 percent of its total revenue from mobile advertising in the same quarter, representing about $320 million. And that isn’t just from the Fortune 500 crowd. By June of last year, nearly 80 percent of US marketers were using promoted Tweets.

In other words, social media ads are growing, and fast. Here are some simple reasons why:

Strengths

Targeting

The biggest advantage of social media advertising really is the targeting functionality. Where traditional advertising suffered from inefficiency, Twitter, LinkedIn, Facebook and other social media advertising platforms offer very effective targeting capabilities. On Twitter, you can target people’s networks, so you know what type of audience you’re going to reach. On Facebook, you have the ability to target people based on their distinct interests. On LinkedIn, you can target people based on their job titles or business experience. All of the data gathered by these social networks become an incredible advertising asset for businesses to utilize to reach their perfect audience.

 A look at LinkedIn's ad targeting capabilities
A look at LinkedIn’s ad targeting capabilities

Price

Social media ads, in general, are affordable for most marketers. A 2014 survey asked 200 B2B marketers to rate the cost of demand generation channels based on the cost per lead. Just over 50 percent of the respondents ranked social media as “very low cost” or “somewhat low cost.” This compares to 42.5 percent for search ads, and 41.7 percent for display ads.

The cost of Twitter ads depends on the ad type, but Promoted Tweets and accounts might cost you anywhere from 50 cents to $10 per engagement (video view, link click, follow, etc.) based on how targeted your ad is. The average cost of Facebook ads will also vary between businesses and ad types. Some sources report Facebook ads averaging around 25 cents for every 1,000 impressions while others point to it being around six or seven dollars.

If those numbers don’t have you convinced, consider that, with social media advertising, you get to test your content out in the wild for free, see how it performs, and only promote your best content. Other platforms don’t offer the same opportunity. Plus, if an ad doesn’t bring you immediate results, you can pull it fast to save your business money.

The price is also good, due to the…

Effectiveness

On Facebook, desktop ads have 8.1x higher click-through rates and mobile ads have 9.1x higher click-through rates than normal web ads. Meanwhile, Promoted Tweets have shown average engagement rates of 1-3 percent—much higher than traditional banner ads.

Simply put, social media ads are effective. They allow you to connect with a very specific audience with content that has been tested for free and you know will strike a chord. They’re flexible, visual, and allow you to push visual content that is built to be shareable, so viewers can actually contribute to your reach.

As with any ad, the effectiveness is dependent on you using the platform correctly. In the case of social media, that means knowing your audience and ensuring that you’re joining the conversation, not trying to distract people from it. People are more receptive to social media ads that provide value and share the qualities of great social media content, including being visual, emotional and sharable.

Accessibility

Any business or individual can use social media advertising. The functionality is built right into the networks they’re already using. In your Hootsuite dashboard, we’ve simplified the Facebook advertising process so it only takes two clicks. This simplicity is a huge advantage for social media advertising. The learning curve is short, which saves you from costly mistakes.

Weaknesses

Stakeholder doubts

Social media is a relatively new platform for advertising. As a new tool, you may have a hard time convincing your stakeholders of its value. People may try to call it a fad or believe the numbers are inflated. They might not understand it, or see how social media ads can be tied back to revenue and broader business goals. These doubts are normal. It’s up to you to gather the data that illustrates the real power of these ads.

Adoption

Another side effect of being a relatively new platform is that people are slow to adopt it. Other people in your organization may not want to need to learn another channel or have to manage another platform. They might be hesitant to take on ads on a platform that they have no experience on. They may find it complicated, especially those who don’t use certain social networks in their private lives. These impediments to adoption can be eliminated with the above evidence, and simple social media education.

Turnover

Social media moves quickly. With social media advertising, you need to move quickly as well. You should regularly be rotating your ads, replacing them with fresh or timely content.

This might seem like a hassle or a time suck, but businesses need to realize that social media ads should mimic their organic social presence. Social media content should always be monitored to see what’s performing well and what isn’t. You should also be regularly posting new content to social profiles. That organic process provides you with everything you need to create and refresh your social media ads.

Summary

Social media is a fantastic advertising option, especially for small businesses. Though no one loves ads, social media emphasizes reaching the right audience with great content, of joining the conversation rather than interrupting it. Its strengths are in its targeting power, cost and effectiveness. And while you may encounter skepticism from higher-ups or other colleagues, social media education can usually put those doubts to bed.

Are you sold on social media advertising? Check out our beginner’s guide and get started with your advertising today.

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