By default, all new Adwords campaigns show ads on both the search and the content networks, but it's quite likely this isn't the best option for your purposes and this article takes a quick look at the differences.
The 'search network' can loosely be defined as ads being displayed when someone uses a search engine, the obvious example being those ads shown on the right of a Google search results page. The 'content network' is essentially ads being shown on websites, placed there by the website owners/builders. Although the ads themselves may be exactly the same, there's a big difference in who they're shown to and when.
The content network (web pages) can be a very useful source of clicks to your campaign as it tends to gather a lot more impressions than search but it does depend on the purpose of your advertising campaign. To grossly over-simplify, I tend to describe the two 'realms' in terms of a shopping high street. People visiting a store will largely fall into two categories: passersby who see something interesting in the shop window and come in, and those who have deliberately visited the town to go to that store (and buy a specific product). With this in mind, I usually equate the content network to the 'passersby'. Your ads are being shown on a number of websites (possibly a very high number) and a reasonable percentage of clicks are going to come from people who had no intention of visiting your site or buying your product when they visited the sending website.
The search network on the other hand, should - if your campaign is set up properly! - results in clicks with a much higher percentage of visitors who are actively looking for your product or service since your ad is only shown in response to a deliberate search for your keyword(s).
At first glance it may seem obvious that the search network is a better bet and you should turn off the content network immediately but it really depends on what it is you're offering or selling. For example, I have one client for whom I'm managing a wedding venue campaign. In this case there's little point in using the content network because booking a wedding reception is highly unlikely to be a 'spur of the moment' decision. It's something that people will specifically search for so I'm able to tailor a campaign based solely on the search network and get good CTR figures and plenty of good value clicks. On the other hand, if your site sells products that are an impulse or regular purchase, for example, office supplies or household cleaning products, the content network is probably a better bet since you might get a decent response from visitors to other sites who see your ad and think 'Oh yes, I need some of those'. The content network is also very useful for brand awareness or general site exposure (increase in traffic) since it's useful for picking up visitors who've been to related sites.
There are, of course, campaigns where you'll want to use both but I tend to keep them as separate physical campaigns with their own budgets. For example, if you sold spare parts for Mini Coopers, you'd probably want to advertise on the content network, probably placing ads on various fan/discussion sites, to pick up impulse repair/replacement enquiries. However, you'd also want to run a search campaign as there'll be people who are specifically looking for a new wiper motor.
Changing the campaign options for search and content is simply handled in the campaign settings page and happens immediately so have a think about your customers and deciding between search, content or both could be the best - and the simplest - thing you can do to improve your campaign performance.
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