Most small business owners who come to us after years of running our agency have already spent money on display advertising without fully understanding what they bought. They know it involves banners and images, but the mechanics — where ads appear, how budgets get consumed, what makes a campaign actually perform — remain foggy. That gap is expensive.
Display advertising is a visual-based form of paid advertising that places image, video, or rich media ads across millions of websites, apps, and YouTube, targeting audiences by behaviour, interest, or browsing history rather than search intent.
What Is Display Ads: The Clear Definition
Display ads are paid visual placements that appear outside search results. Unlike pay-per-click search ads, which target people actively searching for something, display ads reach people while they are doing something else entirely — reading an article, checking the weather, watching a video.
The Google Display Network (GDN) is the dominant infrastructure for this. It spans over two million websites and reaches more than 90% of internet users globally. When you see a banner for a product you browsed last week, that is almost certainly a display ad served through a network like this.
Understanding what is display ads means understanding one fundamental distinction: you are interrupting, not responding. Search ads meet intent. Display ads create or reactivate it. Neither is superior — they serve different purposes — but conflating them leads to wasted budget and misplaced expectations.
For SMEs in particular, the question of what is display ads is worth answering properly before committing spend, because the audience targeting options, the bidding mechanics, and the creative requirements are entirely different from search.
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How Display Advertising Actually Works
When an advertiser sets up a display campaign, they define who they want to reach using signals like interests, demographics, in-market behaviour, remarketing lists, or contextual keywords that match the content of a page. Google's ad auction then determines in real time whether to show that ad to a user on a given page, and at what cost.
The pricing model is usually CPM (cost per thousand impressions) or CPC (cost per click), depending on campaign goals. Brand awareness campaigns tend to favour CPM. Remarketing campaigns, where you are targeting people who have already visited your site, often favour CPC because click-through rates are higher and the intent to convert is stronger.
One thing we noticed repeatedly over nine years at the agency: advertisers underestimate how quickly display budgets can be consumed by irrelevant placements. Without negative placement lists and regular exclusions, your ads can appear on low-quality sites, mobile apps aimed at children, or parked domains that generate zero real traffic. The network is vast, and that breadth is both the opportunity and the risk.
Bid strategies also behave differently here. Target CPA and Target ROAS bidding on display campaigns require sufficient conversion data to function well — typically at least 50 conversions per month at the campaign level. Below that threshold, manual or enhanced CPC bidding often produces more predictable results.
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Display Ads vs Search Ads: Key Differences
If you are working out where display advertising fits into your marketing mix, the comparison with search is the most useful starting point. The two channel types are complementary, but they operate on fundamentally different logic.
| Feature | Display Ads | Search Ads |
|---|---|---|
| Targeting basis | Audience behaviour, interests, context | Keyword intent |
| Ad format | Image, video, rich media, HTML5 | Text-based |
| Typical CPM/CPC | Lower CPC, variable CPM | Higher CPC |
| User mindset | Passive, browsing | Active, searching |
| Primary use | Awareness, remarketing | Demand capture |
| Conversion rate | Generally lower | Generally higher |
| Creative requirement | Visual assets required | Headline and description copy |
This table simplifies a complex picture, but the core point holds: display advertising is better suited to building awareness and re-engaging past visitors than to capturing people who are ready to buy right now. For more on how search fits alongside this, see our guide to what is paid search marketing.
The mistake most SMEs make is expecting display campaigns to produce the same conversion rates as search. They will not. That is not a failure — it is simply the wrong benchmark.
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Display Ad Formats You Need to Know
Responsive Display Ads
Responsive display ads (RDAs) are now the default format in Google Ads. You supply up to 15 images, 5 headlines, 5 descriptions, and a logo, and Google's machine learning assembles combinations automatically to suit available ad slots. The appeal is obvious: one upload adapts to hundreds of placement sizes without manual resizing.
The trade-off is control. With RDAs, you cannot predict exactly which headline will appear alongside which image. For brands with strict visual guidelines or nuanced messaging, this matters. We have seen RDA combinations produce contradictory messages when assets are not curated carefully — a sale-focused headline paired with a premium brand image, for example.
Static and Uploaded Display Ads
Uploaded ads — where you provide finished image files at specific dimensions — give you full creative control. The standard sizes are 300x250, 728x90, 160x600, and 300x600. These are the placements that command the most inventory across the GDN.
The downside is production overhead. Each size needs a separate asset, and if your creative is not performing, you need to produce new versions before testing. For SMEs without an in-house designer, this can slow iteration considerably.
Video Display Ads
Video ads served through the GDN (as opposed to YouTube-specific campaigns) can appear in-stream or in-banner. They tend to have higher engagement but also higher production requirements. For most SMEs, video display is worth exploring once search and remarketing campaigns are already profitable — not as a first channel.
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Audience Targeting Options for Display
The targeting depth available in display advertising is one of its genuine advantages over other forms of visual advertising. Understanding what is display ads in a practical sense means understanding these targeting layers.
In-market audiences target users who Google has identified as actively researching a product or service category. If someone has visited multiple car insurance comparison pages recently, they will appear in the auto insurance in-market audience.
Affinity audiences target by longer-term interests — things like cooking, fitness, or travel. These are broader and better suited to brand awareness than direct response.
Custom intent audiences let you define your own audience based on search terms they have used or URLs they have visited. This is one of the more powerful options for SMEs because it lets you target people who have been searching for your competitors or your product category specifically.
Remarketing lists are arguably the highest-value display targeting available to most SMEs. These audiences have already visited your site, so they have demonstrated some level of interest. Remarketing campaigns consistently outperform cold audience campaigns in our experience, often by a significant margin in both click-through rate and conversion rate.
For a broader view of how budget allocation works across different Google Ads campaign types, see how much Google Ads costs for SMEs.
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Common Mistakes SMEs Make With Display Campaigns
After running campaigns for clients across a wide range of sectors, certain patterns emerge consistently. These are the errors worth knowing before you spend.
The first is running display campaigns with no remarketing audience exclusions from cold audience campaigns. Without this, you are paying cold CPMs to reach people who may have already converted — or paying twice for the same person at different bid levels.
The second is ignoring the placement report. The GDN will serve ads on content that has nothing to do with your business unless you tell it not to. Checking placements weekly and adding irrelevant sites to your exclusion list is not optional — it is the difference between a campaign that improves over time and one that haemorrhages budget.
The third mistake is treating display as a set-and-forget channel. Display campaigns require regular attention: creative refreshes to combat ad fatigue, bid adjustments as seasonal patterns shift, and audience list maintenance. If your campaigns have been running for three months without a single change, they are almost certainly underperforming. This is exactly the kind of ongoing management that Overtime handles — logging into accounts, pausing underperformers, and adjusting bids without you needing to stay on top of it daily.
For SMEs who also run search campaigns alongside display, understanding how to fix high cost per acquisition is closely related to these same placement and bid management disciplines.
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Is Display Advertising Right for Your SME in 2026
Display advertising is not universally the right channel for every business at every stage. It performs best when you have an existing audience to remarket to, a visual product or brand, or a longer buying cycle where staying visible over time influences a purchase decision.
It is less well-suited to businesses with very small budgets (below roughly £500 per month), limited creative assets, or products with zero visual differentiation. If your conversion window is very short and your margin is tight, search advertising will almost always produce faster, more measurable returns. You can read more about structuring that side of your activity in our Google pay-per-click management guide.
For businesses that have already established profitable search campaigns, display — particularly remarketing — is a natural and cost-effective next step. The CPCs are generally lower, and the ability to stay in front of past visitors while they are deciding is genuinely valuable in categories with longer consideration periods.
As AI-driven campaign management becomes more capable, the management overhead that made display campaigns daunting for SMEs is reducing. Automated bid strategies, responsive formats, and AI agents like Overtime that actively monitor and adjust campaigns are making it more realistic for smaller businesses to run display campaigns without a dedicated specialist.
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What Is Display Ads: Applying This to Your Campaigns
Now that the mechanics are clear, the practical question is what to do with this. If you are new to display advertising, start with remarketing. Set up a remarketing list for site visitors, exclude anyone who has already converted, and run a responsive display campaign with a clear offer. Keep the daily budget low initially — £10 to £20 per day is enough to gather data — and check the placement report after the first two weeks.
If you are already running display campaigns and struggling to see results, the placement report and audience targeting are almost always where the problem lies. Pull both reports, exclude the irrelevant placements, tighten the audience targeting, and give the campaign two to three weeks to respond before drawing conclusions.
Understanding what is display ads is the starting point, but active management determines whether the channel delivers. That means regular bid reviews, creative refreshes every six to eight weeks, and ongoing exclusion list maintenance — the operational work that many SMEs simply do not have time to do consistently. Overtime manages exactly this: it logs into your Google Ads account, pauses underperforming ads, reallocates budget toward what is working, and sends you a plain-English summary so you always know what is happening without having to live inside the platform.
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Frequently Asked Questions
What is display ads and how is it different from search advertising?
Display ads are visual placements — images, banners, or video — that appear across websites, apps, and YouTube while users are browsing. Search ads are text-based and appear when someone types a specific query into Google. The core difference is intent: search ads respond to active demand, while display ads create or reactivate it.
How much do display ads cost for a small business?
Costs vary significantly based on targeting, industry, and format. CPM rates on the Google Display Network typically range from £0.50 to £3.00 for broad audiences, with remarketing audiences often costing more per click but converting at a higher rate. A workable starting budget for testing is around £300 to £500 per month. See our full breakdown of Google Ads costs for SMEs.
Why are my display ads getting impressions but no clicks?
Low click-through rates on display are normal — industry averages sit around 0.1% to 0.35% — but consistently poor performance usually points to weak creative, irrelevant placements, or audience targeting that is too broad. Check your placement report, refresh your ad creative, and consider narrowing your audience before increasing spend.
Should SMEs run display ads before search ads?
Generally no. Search ads capture existing demand and tend to produce faster, more measurable returns for businesses with limited budgets. Display advertising is most effective as a complement to search — particularly for remarketing to people who have already visited your site through a search campaign. Establish a profitable search foundation first.
Can display ads work for B2B businesses?
Yes, though the approach differs from B2C. B2B display campaigns work best with custom intent audiences based on competitor research terms, LinkedIn-matched audience data layered in, and longer remarketing windows that reflect longer buying cycles. Expect lower click-through rates and a longer path to conversion than in consumer-facing categories.