CPC for listing ads (paid search ads) rises year after year. Search alone limits how many new people you can reach.
In 2026, more ad managers are facing these challenges.
One way to address them is with display ads. The Google Display Network (GDN) can reach a vast number of internet users worldwide. Adding Yahoo! JAPAN Ads Display Ads (YDA) extends that coverage even further within Japan.
Yet many advertisers say, "We tried running banners but got no results," "We only use retargeting," or "We don't know how to split our budget with search ads." Display ads offer considerable flexibility in setup, but that also makes it easy to waste ad spend without a strategy.
This article explains display ad fundamentals, the characteristics of each format, key settings for Google Ads and Yahoo! JAPAN Ads, and practical techniques for maximizing cost-effectiveness.
Source: Google
What are display ads? The key difference from search ads
Google Ads Help also describes search and display ads as reaching users at different stages. The basic difference is that search ads (listing ads) reach people who are searching for specific products or services, while display ads reach a broader audience, including people relatively early in the buying cycle.
Comparison | Listing ads (search ads) | Display ads |
|---|---|---|
Where ads appear | Search results pages (Google Search, the Shopping tab, Google Images, Google Maps, and more) and affiliated search partner sites | Websites and apps in the Google Display Network, YouTube, Gmail, and more |
User stage (intent) | Searching for a specific product or service | A broad audience, including people relatively early in the buying cycle |
Main formats | Primarily text formats, such as responsive search ads combining headlines (up to 15) and descriptions (up to 4) | Primarily responsive formats combining images, ad headlines, logos, videos, and descriptions |
Basis for targeting | Search keywords entered by users | Audiences (groups such as website visitors and people considering a purchase) and content (context specified through keywords, topics, and placements) |
Best suited objectives | Reaching customers who are ready to buy and supporting comparison and consideration | Capturing interest early in the buying cycle and maintaining contact with a broad audience |
Typical pricing approaches | Primarily pay per click (CPC) | Options include pay per click (CPC), Cost Per Mille (CPM), viewable CPM (vCPM), and cost-per-conversion bidding |
Display ads are image, video, and text ads shown in ad spaces on websites and apps. They appear within content people view every day, including news sites, blogs, YouTube, and apps.
Definition of display ads
Search ads (listing ads) reach people who are actively searching and have a clear need. The key difference is that display ads can reach people who have not started searching but could become future customers.
When to use search ads and display ads
Comparison | Search ads (listing ads) | Display ads |
|---|---|---|
Audience reached | People with an existing need (ready to buy) | People with potential needs + people with existing needs (through retargeting) |
Where ads appear | Search results pages | Websites, apps, YouTube, and more |
Main ad formats | Text | Images, video, text, HTML5 |
Main role | Capturing demand (directly driving conversions) | Building awareness, supporting consideration, and retargeting |
If search ads "harvest" demand, display ads both "plant seeds" and follow up through retargeting. Neither is inherently better. The right approach is to use each according to the stage of the funnel.
3 situations where display ads work well
Awareness stage: When you want to introduce a new product or service to a broad target audience at launch
Consideration stage: When you want to retarget previous website visitors and encourage further consideration
Branding objectives: When you prioritize impressions, as with reserved ad placements, to improve brand recall within your industry
4 main types of display ads: Features and how to choose
Ad format significantly affects display ad placements, costs, and results, so choosing a format that fits your objective is key to success.
1. Banner ads (image ads)
This is the longest-established and most common display ad format. It combines a static image with text and runs in GDN and YDA ad spaces.
Best suited for:
Reaching a broad audience while keeping production costs down
Quickly evaluating creatives through A/B testing
Situations that require many size variations
Main sizes (GDN): 300 x 250, 336 x 280, 728 x 90, 160 x 600, 320 x 50 (mobile)
Key point: Campaigns using only static banners have become less common in recent years. The prevailing approach is to combine them with Google's responsive display ads (discussed below), leaving room for machine learning to optimize performance.
2. Video ads
These video-format ads run on YouTube, in video players on websites, within apps, and elsewhere.
Best suited for:
Visually demonstrating how a product feels to use or how to operate it
Communicating a brand's story or identity
Making awareness your top priority
Main placements and formats:
Format | Description | Recommended use |
|---|---|---|
In-stream (skippable) | Plays before, during, or after YouTube videos. Skippable after 5 seconds | Building awareness and interest |
In-stream (non-skippable) | Mandatory viewing of up to 15 seconds | Communicating a message in a short format |
Bumper ads | Very short ads of up to 6 seconds. Non-skippable | Maximizing reach and providing reminders |
Outstream | Appears between articles on websites | Building awareness on mobile |
Key point: The first 3 seconds determine a video's success. Show your brand logo or product shot within those 3 seconds so viewers immediately understand what the ad is about.
3. Native ads
These ads blend into the content of websites and apps. Because they look similar to articles or posts, users tend to accept them more naturally.
Best suited for:
Driving traffic to written content (whitepapers and blog posts)
Delivering a brand message without making it feel overtly like an ad
Connecting content marketing with advertising
Key point: The experience after the click is especially important for native ads. Sending users to an obviously promotional page can undermine their trust. Always direct them to valuable content, such as how-to articles or research reports.
4. Responsive display ads (RDA)
This is the latest format recommended by Google Ads. When you upload assets such as headlines, descriptions, images, and logos, Google's machine learning automatically generates the best combination for each placement.
Best suited for:
Limited creative production resources
Covering a variety of placements at once
Making full use of machine learning optimization
Recommended number of assets:
Asset | Maximum uploads | Recommended uploads |
|---|---|---|
Headlines | 5 | 5 (fill every slot) |
Long headlines | 5 | 5 |
Descriptions | 5 | 5 |
Images (landscape) | 15 | At least 5 |
Images (square) | 15 | At least 5 |
Logos | 5 | At least 2 |
Key point: Aim for an "Ad Strength" rating of "Excellent" or higher. If the rating is low, add or replace assets in categories that lack variety.
Targeting strategy: Who sees your ads determines 80% of results
Targeting is the most important factor in display advertising. Even excellent creative will not deliver results if it reaches the wrong audience.
Audience targeting (based on people)
This type of targeting defines which people will see your ads.
Targeting type | Overview | Use case |
|---|---|---|
Affinity segments | Segments based on hobbies, interests, and lifestyles | Building awareness (broad reach) |
In-market segments | Users actively researching and comparing products or services | Acquiring users in the consideration stage |
Custom segments | Segments you define based on specific keywords, URLs, or apps | Reaching visitors to competitors' websites, for example |
Remarketing | Visitors to your website or users of your app | Bringing back users who have left |
Similar audience | New users with characteristics similar to those on your remarketing list | Expanding your pool of new prospects |
Demographics | Age, gender, household income, and parental status | Narrowing your audience to match your personas |
Content targeting (based on placements)
This type of targeting defines where your ads appear.
Targeting type | Overview | Use case |
|---|---|---|
Topics | Serving ads on pages about specific topics | Exposure on industry-related sites |
Placements | Selecting specific websites, apps, or YouTube videos | Ensuring brand safety |
Keywords | Serving ads on pages containing specific keywords | Focusing on niche topics |
A practical framework for targeting
Effective targeting depends on designing it around each stage of the funnel.
Awareness stage (upper funnel)
Affinity segments x topic targeting
Objective: Broad reach. CPM pricing is suitable
KPIs: Impressions, reach, video view rate
Consideration stage (middle funnel)
In-market segments x custom segments
Objective: Reaching users with strong interest
KPIs: Click-through rate, site visits, micro-conversions
Acquisition stage (lower funnel)
Remarketing x similar audiences
Objective: Driving conversions
KPIs: Conversions, CPA, ROAS
Creative production: 5 principles that influence click-through rate
Display ad performance depends on the combination of targeting and creative. No matter how precise your targeting is, users will not respond if the creative is unappealing.
Principle 1: Follow the 3-second rule
Display ads catch a user's attention for only a very short time. Within that window, you need to make clear what you are communicating, to whom, and why.
Checklist:
Can users identify the product or service within 3 seconds?
Does the message make your target audience feel it is relevant to them?
Is the next action (CTA) clear?
Principle 2: Align headlines and visuals
If the text says "30% off" but the image is a brand photo, the message loses focus. Make sure the text and visual tell the same story.
Principle 3: Make the CTA (call to action) specific
Weak CTA | Strong CTA |
|---|---|
Learn more | Download the resource for free |
Click | Start your 30-day free trial |
See more | Get a quote now |
Principle 4: Keep the ad and landing page consistent
Users will leave if they cannot immediately find the offer from your ad on the destination landing page. Keep the message, visuals, and offer consistent.
Principle 5: Design your testing process first
Creative work does not end with production. Establish your A/B testing rules in advance.
Example test design:
Change only 1 element per test (headline, image, or CTA)
Wait until you have enough impressions before making a judgment
Confirm statistical significance (95% confidence level) before selecting a winner
Run each test for at least 1 week (to account for variations by day of the week)
Related reading
Online advertising types, management methods, and performance improvement: Practical strategies
This article explains practical approaches to the characteristics and management of different types of online advertising, including display ads.
Google Ads display campaigns: From setup to optimization
Google Ads display campaigns give you access to one of the world's largest ad networks, but their many settings can also make them challenging to manage.
Steps to create a campaign
Step 1: Choose a campaign objective
When you create a "New campaign" in Google Ads, first choose an objective.
Objective | Recommended use case |
|---|---|
Sales | Driving purchases on an e-commerce site |
Leads | B2B lead generation |
Website traffic | Building awareness and driving traffic to content |
Brand awareness and reach | Large-scale branding initiatives |
Step 2: Configure targeting settings
Combine the audience targeting and content targeting described above. Early on, turning on "Optimized targeting" can be effective because it gives Google's machine learning room to expand your audience.
Step 3: Choose a bidding strategy
Bidding strategy | Optimization objective | Recommended use case |
|---|---|---|
Maximize Conversions | Conversions | When increasing conversions is the top priority |
Target CPA | CPA | When you want to increase conversions while staying within a CPA limit |
Target ROAS | ROAS | When revenue efficiency is a priority, such as in e-commerce |
Maximize Clicks | Clicks | When the objective is to generate traffic |
Target impressions | Impressions | When the objective is branding |
Step 4: Upload creative assets
Upload your responsive display ad assets. Use the recommended asset counts above as a guide and prepare as many variations as possible.
Google Ads display optimization checklist
After launch, regularly review the following points.
[x] Is the "Ad Strength" score "Excellent" or higher?
[x] Have you used placement exclusions to exclude sites that could damage your brand?
[x] Are conversion actions being measured correctly?
[x] Are there any performance imbalances across audience segments?
[x] Have you set a frequency cap (an impression limit)?
[x] Are you reviewing performance by device and adjusting bids?
Related reading
What is GDN? Differences from YDA, placements, banner sizes, and setup steps
This article explains specific Google Display Network (GDN) settings and practical techniques for managing it effectively.
Yahoo! JAPAN Ads Display Ads (YDA): Setup and practical tips
Yahoo! JAPAN Ads Display Ads (YDA) is a platform that lets you serve ads across major LY Corporation group services, including the Yahoo! JAPAN homepage, Yahoo! JAPAN News, Yahoo! JAPAN Mail, and LINE.
YDA features
Main differences from GDN:
Comparison | GDN | YDA |
|---|---|---|
Main placements | Google partner sites, YouTube, Gmail | Yahoo! JAPAN services and the LINE family of services |
Strongest age groups | All ages (global) | People in their 30s–50s (strong reach among business audiences in Japan) |
Video ads | Primarily YouTube | Between Yahoo! JAPAN News articles and elsewhere |
Machine learning | Extensive options, including Performance Max | Automated bidding and targeting are evolving |
5 practical tips for managing YDA
1. Consider Yahoo! JAPAN homepage placements
The Brand Panel placement on the Yahoo! JAPAN homepage is highly visible and effective for building awareness. However, CPM is high, so use it with a clearly defined branding objective.
2. Use search targeting
"Search targeting" is a powerful feature unique to YDA. It lets you show display ads to users who previously searched for specific keywords on Yahoo! JAPAN Search. It is particularly effective as a complement to search ads.
3. Strengthen audience list integration
In addition to site retargeting, you can upload customer data (such as email addresses) and use similar audience expansion to reach high-quality new users.
4. Allow enough time for automated bidding to learn
Optimization progresses once a sufficient amount of conversion data has accumulated consistently. Avoid frequent changes to bidding strategies or budgets during the learning period.
5. Adapt to the LINE Yahoo Ads integration
In April 2026, LINE Ads and YDA were integrated into "LINE Yahoo Ads Display Ads." The integration enables delivery across LINE and Yahoo! JAPAN placements, so complete the necessary setup, including a unified Business ID.
3 strategies to maximize cost-effectiveness
Display ad success depends on the right budget allocation, strategic retargeting, and thorough elimination of waste.
Strategy 1: Optimize budget allocation by funnel stage
Splitting your budget equally across all funnel stages is inefficient. Decide which stage to prioritize based on your business's stage of development.
Budget allocation by funnel stage varies significantly by industry and product, so adjust it using your own past results as a baseline.
For B2B lead generation, an effective approach is to allocate a larger share to the middle funnel (whitepaper downloads and webinar registrations) and use retargeting in the lower funnel.
Strategy 2: Design retargeting in stages
Simply showing ads to website visitors limits the effectiveness of retargeting. You can significantly improve cost-effectiveness by segmenting users by time since their visit and their behavior, then tailoring the message.
Segment | Target users | Example message | Bid intensity |
|---|---|---|---|
Hot leads | Users who abandoned a cart or form (within the past 3 days) | "Did you forget something? Here's a free shipping coupon." | High |
Warm leads | Users who viewed product details (within the past 7 days) | "Our No. 1 most popular product, now with a first-purchase discount." | Medium |
Cold leads | Users who visited only the homepage (within the past 30 days) | "Our product selection guide is available for free." | Low |
Inactive users | More than 30 days since their last visit | Creative focused on reminding users of the brand | Lowest |
Strategy 3: Reduce wasted spend with exclusions
The biggest factor reducing display ad cost-effectiveness is showing ads in irrelevant placements. Be sure to apply the following exclusions.
Items to exclude:
Placement exclusions: Poor-performing placements and sites that do not fit your brand image
Exclude users who have converted: Exclude users who have already purchased or signed up from retargeting
Demographic exclusions: Age groups and genders outside your target audience
Mobile app exclusions: Game apps and other apps prone to accidental taps (exclude adsenseformobileapps.googlesyndication.com)
Practical tip: Make it a weekly habit to check placement reports for placements with many impressions but zero conversions, then add them to your exclusion list.
Optimizing bidding strategies: When to use automated and manual bidding
Automated bidding in both Google Ads and Yahoo! JAPAN Ads has become more accurate in recent years, but it is not the best option in every situation.
When to use automated bidding
Automated bidding is likely to outperform manual bidding when the following conditions are met.
You have accumulated a sufficient amount of conversion data
Conversion tracking is configured accurately
Your budget is not severely constrained
When manual bidding works well
Manual bidding may offer more control in the following situations.
Conversions are limited, leaving insufficient training data for machine learning
You want to focus delivery exclusively on specific placements or audiences
You are testing and want to control a limited set of variables
Comparison of key automated bidding strategies
Strategy | Optimization objective | Advantages | Disadvantages |
|---|---|---|---|
Maximize Conversions | Conversions | Makes it easier to increase total conversions | CPA may rise above expectations |
Target CPA | CPA | Lets you control the CPA limit | May miss some conversion opportunities |
Target ROAS | Revenue efficiency | Best for businesses directly tied to sales, such as e-commerce | Lower-priced products may receive less ad delivery |
Maximize Clicks | Clicks | Effective for generating traffic | May increase clicks that do not directly lead to conversions |
The PDCA cycle for bid optimization
Plan: Choose a bidding strategy that fits your campaign objective and set your Target CPA / Target ROAS values
Do: Keep the strategy unchanged for at least 2–4 weeks to allow time for machine learning
Check: After the learning period, review the gap between results and targets. Also analyze breakdowns by device and audience
Act: Adjust targets, replace creatives, and add or exclude targeting options before starting the next cycle
Measurement and improvement: Metrics to monitor and the analysis process
Measuring display ad effectiveness requires analysis from multiple perspectives across the entire funnel. Relying on a single metric risks misguided optimization.
Key KPIs by funnel stage
Funnel stage | Primary KPIs | Supporting KPIs |
|---|---|---|
Awareness | Impressions, reach | CPM, viewable impression rate |
Consideration | Clicks, CTR | CPC, time on site, bounce rate |
Acquisition | Conversions, CPA, ROAS | CVR, form reach rate |
Weekly checklist
[x] Are overall CPA / ROAS within the target range?
[x] Does the placement report show any poor-performing placements?
[x] Is frequency (impressions per user) becoming excessive?
[x] Are there large differences in CTR across creatives?
[x] Is budget spending on pace with the plan?
Why attribution analysis matters
Display ads often appear to contribute little to conversions under "Last click" attribution. In practice, however, they frequently play an important role as a touchpoint during the awareness stage.
Use "Data-driven attribution" in GA4's attribution reports to properly evaluate how display ads assist conversions. Evaluating them only through last-click attribution tends to leave display ads underfunded.
Related reading
What is CPA? Practical guidance on calculations, improvement methods, and target setting
This article provides detailed, practical guidance on optimizing CPA, a key metric in display advertising.
For Yahoo! JAPAN display ads, see What is YDA? Differences from GDN, its current name, and how to get started. For retargeting with product feeds, see How Criteo works, its costs, and differences from major ad platforms for a detailed explanation.
For a new placement beyond search and display, also see How ChatGPT ads (OpenAI Ads) work and how to advertise.
If you are considering news app placements, also see SmartNews Ads types, costs, and how to advertise.
For an explanation of Microsoft Ads, which deliver to the Microsoft Audience Network, see What is Microsoft Ads? Placements, costs, and how to get started.
FAQ
What is an appropriate budget for display ads?
The right budget varies considerably by industry and business size. If your budget is too small, machine learning may not receive enough training data, making optimization less effective. B2B businesses tend to have higher costs per lead, which should be factored into the budget. Start by working backward from your products and CPA target, then adjust the budget based on results.
Should I prioritize display ads or listing ads?
The common approach is to first use listing ads to capture people with an existing need, then add display ads once monthly conversions stabilize. However, in niche markets with little competition or for new businesses, leading with display ads to build awareness can also be effective.
Is video creative essential?
It is not essential, but video ads tend to have higher click-through rates than static images. If production resources are limited, even turning existing product photos into a slideshow can be effective. As vertical video formats such as YouTube Shorts become more common, consider preparing square and vertical formats as well.
How long should a retargeting campaign run?
The appropriate retargeting period varies by product. Rather than fixing the duration alone, design your approach around engagement levels. Segment users by behavior and adjust frequency and messages according to their level of interest.
Should we manage ads ourselves or hire an ad agency?
Using an ad agency can be efficient if you do not have a dedicated marketer. Bringing ad operations in-house can be beneficial if you have a large budget and prioritize accumulating and using your own data. An AI agent such as Cascade can also help you reduce the workload of in-house ad operations substantially while moving away from dependence on an ad agency.
What is the difference between listing ads and display ads?
Listing ads (search ads) appear on search results pages for users who are searching for specific products or services. Display ads appear on websites, apps, YouTube, Gmail, and other placements. They can also reach users relatively early in the buying cycle.
What is the difference between display ads and retargeting ads?
Display ads are the broad category of ads delivered to users across a display network. Retargeting (remarketing) repeatedly reaches users who have previously interacted with your website or app. It is one of the most common uses of display advertising.
Summary: A checklist for getting results with display ads
Display advertising can cover the entire marketing funnel, from reaching potential customers beyond the reach of search ads alone and building brand awareness to driving conversions through retargeting.
Use this final checklist to review the key points for getting results.
Strategy
[x] Have you defined objectives, KPIs, and budget allocation for each funnel stage?
[x] Have you clearly defined the respective roles of search and display ads?
Targeting
[x] Are you combining audience targeting and content targeting appropriately?
[x] Have you segmented your remarketing lists?
[x] Have you configured exclusions for placements and audiences?
Creative
[x] Does your messaging follow the 3-second rule?
[x] Are your ads and landing pages consistent?
[x] Is your A/B testing process running?
Management and optimization
[x] Are you allowing enough learning time for automated bidding?
[x] Are you analyzing placements, frequency, and creatives every week?
[x] Are you using attribution analysis to properly assess the contribution of display ads?
Display ads are not something you can set up and forget. Continuous improvement based on data is the only way to maximize cost-effectiveness.
For many businesses, however, developing specialized ad management expertise and performing daily optimization are a major burden. That is why businesses are paying attention to ad management automation through Cascade's AI agent. With machine learning for bid optimization, creative analysis, and performance improvement recommendations, you can manage display ads effectively even without specialized expertise.
Use this article to build and improve your display advertising strategy. With the right strategy and continuous optimization, display ads are sure to deliver results.
