What Are the Different Types of Google Ads?

Paid search has become one of the more technical corners of marketing, full of acronyms (CPC, CPA, ROAS, PMax). So let’s walk through the main types of Google ads: paid search, Performance Max, display, and retargeted. For each one, we’ll explain the basics of how it works and what it costs, then give an overview of the pros and cons, so you can judge for yourself where each one fits.

Types of Google Ads At a Glance

Format	Best for	Typical cost	Main watch-out
Paid Search	Capturing people actively searching for what you offer	Averages around $5 per click across industries	Costs climb fast in crowded categories
Performance Max	Scaling volume on a simple, well-defined conversion event	Often a lower blended cost than Search alone	Less visibility and control over where ads run
Display	Building broad awareness before people start actively searching	Around $0.61 per click on average	Low intent, weak as a stand-alone lead source
Retargeting	Re-engaging people who already visited your site	Similar to standard display, often under $1	Needs existing site traffic to build an audience

What Is Paid Search and How Does It Work?

Paid search is what most people picture when they think of the different types of Google ads. These are the text-based ads at the top of a Google search results page, marked with a small “Sponsored” label, sitting right above the organic listings.

How does paid search work?

1. An advertiser chooses the keywords they’d like to show up for, things like “commercial HVAC installer Cleveland” or “custom injection molding services.”
2. When someone searches one of those terms, Google runs an instant auction among every advertiser bidding on it.
3. Google weighs relevance and expected click-through rate alongside the bid amount, a combination it calls Quality Score, so a more relevant ad can win a top spot for less money than a less relevant ad bidding higher.

This is what makes paid search different from other types of Google ads: it targets intent rather than demographics. Instead of guessing who might want your product, you show up at the exact moment someone is already searching for it.

How much does paid search cost?

Cost per click varies a lot by industry, and this is where a lot of newer marketers get thrown off by a single number they see online. According to WordStream by LOCALiQ’s 2026 Search Advertising Benchmarks report, average search CPC is around $5.42 across industries. Categories with high customer lifetime value and heavy competition, think legal services, may run $9.87 or more per click, while lower-competition categories can land closer to $1.60 to $2.

The number that matters more than CPC on its own is cost per lead or cost per acquisition, since a $9 click that converts at 8% can easily beat a $2 click that converts at half a percent.

Pros of Paid Search

1. Targets intent rather than demographics, so you’re reaching people at the exact moment they’re already looking for what you offer.
2. Gives you granular control over keywords and ad copy, right down to individual bid amounts.
3. Produces some of the clearest, most transparent performance data of any format on this list.

Cons of Paid Search

1. Costs rise quickly in competitive categories, and popular keywords can get expensive.
2. Requires ongoing management, since keyword lists and negative keywords need regular attention to stay efficient.
3. Reaches people who are already searching, doing relatively little to build awareness among people still unaware they have the problem you solve.

What Is Performance Max and How Is It Different From Other Types of Google Ads?

Performance Max, often shortened to PMax, is a newer offering that works differently from other types of google ads. Instead of having to choose keywords and write individual ads, you provide Google a set of assets, headlines, descriptions, images, videos, and logos, along with your goals and audience signals. Google’s machine learning then assembles and places ads automatically across its entire ecosystem: Search, Display, YouTube, Gmail, Discover, and Maps, all from one campaign.

How Does Google Performance Max Work?

1. You upload creative assets and set a conversion goal, such as leads or sales.
2. Google’s algorithm tests combinations of those assets across every placement it has access to.
3. Over time, the system shifts budget toward whichever combinations and placements are producing the best results, based on your stated goal.

The tradeoff is control. You’re placing a fair amount of trust in Google’s model to work out where your ads run and which signal triggered each one, finding the highest-value combination of placement and audience on its own. For some accounts, that produces excellent efficiency. For others, especially B2B accounts with a long, considered sales cycle, it can pull budget toward volume rather than the right kind of lead.

What Does Performance Max Cost?

Because PMax blends cheaper inventory (Display, YouTube) with pricier Search inventory, blended costs often look more efficient on paper than other types of Google ads. That efficiency deserves a second look, though. According to Kampaio’s 2026 B2B SaaS Google Ads Benchmarks report, B2B accounts saw Search campaigns deliver a 553% average target ROAS compared to 436% for PMax, a reminder that a lower blended cost still leaves the question of customer fit wide open.

Pros of Performance Max

1. Reaches people across Google’s entire ecosystem from a single campaign, saving significant setup and management time.
2. Uses machine learning to find efficient combinations of creative and placement that would take a person far longer to test manually.
3. Tends to perform well for businesses with a simple, well-defined conversion event, like an e-commerce purchase.

Cons of Performance Max

1. Offers limited visibility into where budget is going or which placement drove a given result.
2. Can favor volume over fit, which matters more for B2B companies with longer sales cycles and multiple decision-makers.
3. Performs only as well as the conversion data it’s fed, so unclear or messy goals tend to produce unfocused results.

What Is Google Display Advertising and How Does It Work?

Display ads are the visual banner ads you see scattered across websites and apps in the Google Display Network. According to Google’s own Display Network documentation, the network reaches over 90% of internet users worldwide. Unlike other types of Google ads, display targets where someone is browsing rather than what they’re actively searching for, placed based on the content of a page or a person’s demographics and interests.

How Google Display Advertising Works

1. You provide visual ad creative in a handful of standard sizes, or let Google auto-generate them from your assets.
2. You choose the targeting: by topic, audience interest, demographic, or the specific websites and apps you want to appear on.
3. Google places your ad wherever it finds the best match within that targeting, across millions of partner sites.

How much does Google display advertising cost?

Display is the budget-friendly end of the menu. According to get-ryze.ai’s 2026 average CPC by industry report, Display campaigns average roughly $0.61 per click, a fraction of search costs. The tradeoff is intent: someone reading a news article is in browsing mode rather than buying mode, unlike someone actively typing a search query. Per Terra’s 2026 Google Ads Benchmarks, Display averages just 0.46% CTR, compared to 3.52% to 6.11% for search.

Pros of Google Display Advertising

1. Costs very little per click, making broad reach affordable even on a modest budget.
2. Builds brand familiarity with a large audience over time, which supports every other channel around it.
3. Works well for staying visible during the long consideration window common in B2B sales cycles.

Cons of Google Display Advertising

1. Lower intent from viewers means conversion rates run well below search or retargeting. Per Kreativa Group’s 2026 B2B benchmarks summary, Search conversion rates average around 4% to 5% compared to roughly 0.5% to 1% on Display.
2. Cost per acquisition can look high if judged the same way as a direct-response channel, since direct lead generation was never display’s primary job. One 2026 CPA benchmark analysis puts average B2B display CPA above $130.
3. It’s easy for newer marketers to expect lead-gen results from what is fundamentally an awareness tool, which tends to lead to disappointment down the line.

What Are Google Retargeting Ads?

Retargeting (sometimes called remarketing) uses the same Google Display Network infrastructure as regular display ads, with one important difference: instead of targeting strangers based on interest or demographic like other types of Google ads, it targets people who have already visited your website.

How do retargeting ads work?

1. A small piece of code (a tag) on your website adds visitors to an audience list.
2. When those same people later browse other sites in the Display Network, your ads follow them, reminding them of what they viewed.
3. Because the audience already knows your brand, the message can call back to something specific, like the exact product they viewed or a form they started but left unfinished.

How much do retargeting ads cost?

Retargeting runs on the same cost structure as standard display, so CPCs stay low, often under a dollar. That low cost combined with a warm audience is why retargeting tends to be one of the most efficient channels in a paid media mix on a cost-per-result basis.

Pros of Google Retargeting Ads

1. Converts at meaningfully higher rates than cold display, since the audience already knows the brand.
2. Keeps a brand top of mind through the weeks or months a B2B buying decision often takes.
3. Costs about the same as standard display, so the higher conversion rate comes without a higher price tag.

Cons of Google Retargeting Ads

1. Depends on having existing site traffic to draw from, since it can only build an audience out of people who already showed up.
2. Audience lists take time to build, and low-traffic sites may struggle to accumulate enough visitors to make it efficient.
3. Can feel intrusive to visitors if frequency runs uncapped and the same ad follows them everywhere for weeks.

How Do These Types of Google Ads Work Together?

Each of these four Google Ads types plays its own role rather than competing to be “the best” one. They’re built to do different jobs at different points in a buyer’s journey.

1. Paid search captures people who are actively looking, right now, for what you offer.
2. Performance Max scales reach and volume across Google’s full ecosystem, best suited to simpler, well-defined conversion goals.
3. Display builds awareness with your target audience before they start actively searching.
4. Retargeting reconnects with people who showed interest earlier but have yet to convert.

A healthy paid media strategy usually leans on more than one of these at once, with search and retargeting carrying the heaviest weight for most B2B companies, and display or PMax playing a supporting role depending on the goal.

In the next pieces in this series, we’ll open each of these Google Ads types up individually:

1. How to structure a search campaign from scratch.
2. What goes into a strong PMax asset group.
3. How to build a retargeting audience strategy that feels helpful rather than like it’s following someone around the internet.

If you’re trying to figure out which of types of Google ads make sense for where your business is right now, that’s the kind of conversation we like having. Reach out to the GBG team and we’ll help you sort through the options!