Search Engine Marketing Overview
From The Yaffe Center
Search Engine Marketing (Paid Search)
Search Engine Marketing (SEM) is a term used to define the strategies used to optimize the display of a company’s advertisement in the paid or sponsored sections of the search engine result page. When someone executes a query using certain keywords the search engine provider performs a bidding to select advertisers whose ad will show in the result page. The idea is based on the fact that ads which appears in more prominent places of the search result webpage have a higher likelihood of getting clicked and therefore companies will be willing to pay more for those spots. In addition, the bid clearing price is also based on the popularity of the keywords. It is important to note that most search engine providers get paid when the ad is clicked, sometimes also referred as pay per click (PPC). This is important distinction from banner ads where the advertisers pay based on the number of impressions of the ad, also known as pay per million impressions (PPM). SEM has allowed marketers to target their products and services at a much granular level than ever possible. It is because of these reasons advertisers spent $13B in 2009 in SEM and it is expected to grow to $26B in 2014[1]. The 2010 market share of various search engine providers based on search volume is mentioned below with Google clearly dominating this market[2].
- Google 71%
- Yahoo 14.5%
- Bing 9.6%
Depending on the search engine provider, the steps involved in determining the placement or ad rank of an ad in the search page varies. From Google’s standpoint the algorithm for paid search placement is shown below: In split seconds when someone executes a search and the result page appears, Google holds an auction to decide the ranking of the ads.
Ad rank = max CPC (bid) * Quality score
Although max CPC or bid is fully in control of the ad provider and can be instantly changed the quality score is a much more obscure factor. Google doesn’t provide the exact algorithm it uses to determine the quality score but it is generally believed to depend on the historical CTR performance of the ad, the display URL of the ad and geography of the user. It is therefore essential for companies to provide relevant ads for specific keywords. Just bidding high for keywords is not enough to get the most desirable position in the result page. Bing and Yahoo has their own way of measuring quality score and also has some elements of ad relevance in determine the ad rank. Therefore, one of the most important consideration of SEM strategy is to find ways to improve quality score.
Most Commonly Used SEM Terminologies:
- Ad rank
- Keyword bid
- Pay per click (PPC)
- Click through rate (CTR)
- Cost per thousand impression (CPM)
- Cost per click (CPC)
- Cost per acquisition (CPA)
- Conversion rate
- Quality score
- Impression
- Ad copy
- Ad groups
- Campaigns
- Landing pages
Techniques to Improve SEM
It is generally accepted that consumer buying cycle via search engines takes the following route:
Learn (Information gathering) – Shop (comparing products) – Buy (ready to buy)
Therefore, the key here is to identify ways to eliminate the barriers for consumers in their buying process with relevant ads. The three most important tools which marketers can control to affect ad ranks or quality scores are:
- Keywords: marketers need to decide which keywords people are going to use in a query to find specific products and services.
- Ad copy: A well written and targeted ad copy is always needed to entice users to click on an ad. Note that ad copy has character restrictions. Therefore, it is important to pack the ad copy with relevant information to drive CTR.
- Landing Pages: It is important to have a well designed landing page to enable users for a call to action.
