What Is Paid Search?

Written by Coursera Staff • Updated on

Learn more about paid search, a key marketing strategy used to reach a targeted audience.

[Featured image] A person with curly hair wearing a yellow sweater searches the internet on a smartphone from a cafe.

Paid search is the method of paying for ads that appear on search engine results pages (SERPs). Each time a user clicks on an ad, the business pays a set fee to the search engine provider. This is pay-per-click, or PPC, advertising. While PPC ads are available on social media platforms, paid search specifically refers to the ads that are placed on search engines like Google or Bing.

When someone enters a phrase into a search engine, the results displayed to them are typically a mix of paid search results and organic results. Paid search results appear at the top of the SERP, while organic, or non-paid, results appear beneath. 

Why is paid search important?

Paid search is an essential part of a successful marketing strategy because it provides insight into customer behavior that’s difficult to learn otherwise. With paid search ads, you have the ability to track each customer’s engagement from the initial click-through to a final sale. This information is key when deciding how to set up future ad campaigns, since you’ll have concrete data about which keywords or copy were the most successful.


Three types of paid search ads exist:

  • Local ads: Designed for businesses with physical locations. These ads display contact information, addresses, and reviews to strengthen a local presence.

  • Text ads: Appear at the top of a SERP and include URLs and some simple copy. They may also appear at the bottom of a search results page.

  • Shopping ads: Designed for products, and typically include images and purchase information as part of the ad itself.

Once you design an ad, the search engine creates a quality score. This score takes into account the relevancy of the ad to the keywords used, the value of the landing page the ad leads to, and the expected rate that customers will click through. Google uses this score to assign how much a business pays each time someone clicks on the ad. It also determines where the ad ranks among the other paid search results; ads with higher quality scores rank toward the top of the results.

When creating ads, know your target audience so you can be in tune with what they are specifically looking for. This insight helps you choose relevant keywords and provide true value to customers when they do click on your ad. Targeted, well-researched ads increase your ROI and conversion rates, potentially resulting in higher profits and customer retention.

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