Search Engine Ads

Introduction

In this chapter Search Engine Advertising (SEA) will be explained and how it works, through definition and description of the typical appearances. After reading this chapter, you will have a better understanding of how to successfully make use of SEA by referring to Google Adwords.

SEA is sometimes also mixed up with advertising methods such as Paid Search Marketing, Paid Per Click (PPC) Marketing, and Cost per Click (CPC) Marketing or Sponsored Advertising.

Definition

SEA are advertisements shown on search engines pages when specific keywords are typed.

How SEA works

An Internet user goes online with the reason to search for something on a search engine site, for example www.google.com.

Google shows two types of search results: organic results, which are on the left side, and sponsored results, which are in a separate row on the right side or above the organic results with a yellow background. All sponsored results are linked to special key words, and therefore just appear when these key words are entered in the search bar.

The Internet user decides for one search result by clicking on it. To explain the operation of SEA we assume that a sponsored search result gets selected. The Internet user is led to a landing page, which may be especially tailored to the sponsored ad, or to the general homepage of the advertiser.

Example:
If you search for “Ski helmets” with the search engine “Google”, SEA will appear in the top (e.g. blue-tomato) and on the side (e.g. snowlab, C&A …) of Google’s normal search results to your search query.

Usage of SEA

Today’s global online population equals 30% of the world’s total population (2.095 billion). An average Internet user spends around sixteen hours per month online. But what does an Internet users do all his time online? Research showed that 21% of the time is spent on search engine sites, which makes it the second popular activity online after social networking.

This shows that SEA can be very effective when used in a right way.

Though, reality proves the opposite: Internet users do more often click on organic results than on sponsored results. People who have a high purchase intention click on sponsored results in their search query. With highly transactional purchases of items such electronics, shoes or clothing, people find more use out of the sponsored results as they are more targeted to specific product search queries.

SEA providers

There are several search engine advertising providers world wide such as Google Adwords, Yahoo and Bing. But in this chapter, we will concentrate only on Google Adwords as it is the most used search engine. The video bellow gives a general introduction of Google Adwords and how it operates

SEA Costs

Search Engine Advertising is of course not for free. There are many different cost measurement methods for online advertising. Examples of these methods are: Cost-per-Mile (CPM), Cost-per-Click (CPC), Cost-Per-Sale (CPS) and Cost-Per-Lead (CPL). However Google Adwords only uses the Cost-Per-Click method.

Cost-Per-Click advertising is also called Pay-Per-Click (PPC) advertising. It is the only used method for computing the costs for Search Engine Advertising. When a word is typed in Google search bar, at the top and at the right will appear advertisements that are related to these keywords. Google then auctions these keywords. The company that has the highest bid will appear first on top. Companies can bid on the places and the highest bidder will have a high chance to get the best place on top. If a person clicks on the advertisement then that company has to pay for that click. Staff, 2007, Search Engine Advertising – Why Use It, and How Much Does It Cost?, 2010, Pay-Per-Click, 2012

It is also possible for a company to set up a budget that they want to spend on Search Engine Advertising. Based on that budget the company can decide what bid they want to make for a keyword. Google can give a rough estimation of the cost and traffic that your keywords will have. This makes it easier for a company to decide what their online advertising budget will be and it is also an effective way of staying within your budget. There is no minimum price per keyword, a company can decide on their own what they want to pay for their advertisement, in addition to a €5 activation fee. The company is only charged when a potential customer clicks on the advertisement.