Marketing teams will spend about $700bn on digital ads this year. That figure accounts for over two-thirds of overall ad spending.
For most businesses, conversions are what matters. That’s not to say that things like brand awareness or middle-of-funnel content aren’t crucial to the buyer’s journey. It’s just that sometimes you need to get quick results that affect the bottom line.
So, let’s look at the different ad campaign types available and see which ones convert the best in 2023.
Paid search ads
Paid search ads show above and beside organic search engine results page (SERP) content when users input search queries. The two most popular platforms for search ads are Google and Bing.
Paid search ads are usually quite simple and feature a headline, some copy, and a link to a URL.
When to use paid search ads:
Paid search ads are about leveraging users’ intent. Because they return results based on the keywords or phrases that users enter, you can target people at various stages of the sales funnel.
There is also a lot of flexibility within paid search. While they have many differences, Shopping Ads also fall under the paid search category.
Search ads average conversion rate: 4.2%
Social media ads
Social media ads refer to any placements that happen on social platforms. That means the various possible campaign types on Facebook, LinkedIn, TikTok, Instagram, Twitter, etc.
When to use social media ads:
You can do all sorts of ad campaigns on social media. They are perfect for any stage of the marketing funnel, provided you choose the right campaign type. Additionally, each platform has a specific type of audience. For example, LinkedIn is good for B2B marketing, while TikTok is a better option if you’re targeting those under 25s.
Social media ads’ average conversion rate: 1.25%
Display ads
Display ads are affordable, simple to create, and relatively basic. They’re the types of ads you see on:
- banners
- blogs
- websites
- apps
- search engine results pages
- video streaming platforms like YouTube
- ad space on email
So, basically everywhere.
When to use Display ads:
Display ads let you target users based on demographics, interests, behavior, or the websites, apps, or video they are engaging with. While this means your reach and impression are bigger, it’s not as precise as targeting based on search intent via keywords.
As such, display ads have lower conversion rates because the ads aren’t always relevant to each user.
Display ads average conversion rate: 0.1%
Video ads
Video ads appear on YouTube, Facebook, Instagram, and specific video streaming platforms. They typically play before the video users want to watch and can be skippable or non-skippable.
When to use videos ads:
Video ads are great for awareness and middle-of-the-funnel activities. However, one big drawback is that they can be expensive and time-consuming to produce. While you can use them to match search intent (i.e., clickable YouTube ads that appear beside organic search), they are typically placed based on audience interests.
Video ads’ average conversion rate: 1.84%
Mobile ads
Mobile ads are an umbrella term for several different ads types, including SMS marketing and in-app banner ads. Despite being considered mobile ads, both campaign types have drastically different click-through rates. SMS can generate as much as 19% for promotions, but in-app ads perform roughly in line with banner or display ads.
When to use mobile ads:
You can’t send SMS ads without the user’s permission. As a result, they are best for things like upselling, cross-selling, and promotions to existing customers (i.e., retargeting).
On the other hand, in-app ads are good for awareness and can be effective if you get the right alignment between placement and your target audience.
Mobile ads average conversion rate: 0.06%
Native ads
Native advertising is a type of ad that fits in with its surroundings. For example, they look like the other articles in your Reddit, Facebook, website, or app newsfeed. Because they blend in with other articles, they are less obtrusive and can counter phenomena like “ad blindness.”
When to use native ads:
Native ads are great for brand awareness, web traffic, and lead gen for B2C and B2B customers.
Native ad’s average conversion rate: 0.3%
Retargeting ads
Retargeting ads are a way of re-engaging people already familiar with your brand. You can use them to connect with people who have abandoned shopping carts, leads that went cold, subscribers, or customers who have become inactive.
When to use retargeting ads:
Retargeting ads are a great option when you have an existing email list or data in your CRM platform. While finding new audiences is essential, circling back to people you’ve already engaged can be very fruitful.
You can also use them to cross-sell or upsell existing customers by offering offers, promotions, or product recommendations.
Retargeting ad’s average conversion rate: 0.7%
Email marketing
Email marketing ads are simply ad copy you send to your marketing list. Recipients need to give permission for you to send these ads, so building up a list takes time and effort.
When to use email marketing ads:
If you want to use email marketing, you must have customer details. However, they’re a great way to nurture leads or engage existing eCommerce customers to buy some items.
Email marketing ad average conversion rate: 2.6%
Audio ads
If you listen to podcasts or use a non-premium version of Spotify, you’ll know all about audio ads.
When to use audio ads:
It’s unfair to judge audio ads on their click-through rates, but Spotify suggests they convert about 0.06% of the time. These ads are really about driving awareness of your brand.
Average audio ad conversion rate: 0.06%
Final thoughts
And the winner is… paid search ads.
Looking at the average conversion rates and seeing figures like 0.06%, you might think these numbers are pretty low. But you must remember that they mix good and bad campaigns.
If you want to beat these numbers, you can use an AI ad optimization tool like Amanda AI to help with ad creation, keyword research, audience targeting, and finding suitable placements.
With the right approach, you’ll outperform the average and your competitors.
