Paid search marketing
The basics of paid search can be quite simply defined: it is the process of bidding for potential clicks on an advert you create that is displayed within the search results pages of most search engines. However, given that this is the land of jargon, let’s get to the point: it is the ads you see at the top, bottom and side of the search results page. Unlike traditional advertising, paid search is ‘bought’ via an auction model. For a given keyword or phrase an advertiser can place a maximum bid; the higher the bid, the higher the likelihood that the advert will be displayed in the top positions. However, one of the big attractions of paid search advertising is that the advertiser only pays each time the advert is clicked, not displayed.
This is obviously highly compelling and is perhaps the main reason why paid search has been adopted by one-man bands, multinationals and every company in-between. What do we call the channel? Confusingly the industry has seen fit to use different terms to describe the same thing, so let’s start by clarifying this. Paid search can also be referred to as: ● PPC, or pay per click: quite a logical name, given that it very accurately describes the basic mechanics of paid search – ie you pay every time someone clicks on your ad. However, some other channels, such as affiliate and display, can use this payment method and so it can be confusing. ● SEM, or search engine marketing: SEM was once used as an umbrella term to encompass both search engine optimization and paid search, albeit mainly in the United States. Somewhat oddly the industry, again though mainly in the United States, has adopted the SEM acronym to refer solely to paid search, therefore creating a split between SEO and SEM.
Setting up a campaign
As noted above, setting up a paid search campaign is incredibly easy. However, many businesses will see this as an easy entry to digital marketing but it is important before starting to consider this: paid search can drain marketing spend very quickly and an ill-considered campaign may very well have a negative return. So this section is designed to cover the basics of getting a strategic paid search campaign set up. As per the approaches we have been discussing so far, it starts with defining your objectives and understanding your audience. We will assume that you have looked at this as part of your initial strategic planning. Keyword research Having set your objective and identified your audience, the next step is keyword research.
In Chapter 5 there is a suggested process for this and it applies just as well to paid search. Perhaps unsurprisingly, Google’s own keyword analyser (available as part of the Adwords platform) is a great tool for building out keywords. However, as with SEO, you need to pick your battles. If your budget is $500 a month, then the highly popular volume- driving or ‘halo’ terms are not within your budget and instead you should focus on niche or longer tail keywords that you are more likely to win the battle on. To put this into context, some of the most expensive keywords have average cost per clicks well above $50 and so you can see how quickly your budget can be depleted if your keyword research and planning is not conducted thoroughly.
Campaigns and ad groups Google and thousands of other sources provide plenty of guidance on how to structure a paid search account. In short, you will have one or more campaigns. A campaign defines your overall budget settings and determines where your ads appear (both in terms of geography and ad networks).
Advanced paid search Below I have outlined some of the more advanced paid search considerations. Day parting Day parting, or custom ad scheduling, allows you to control the days of the week and times of day that you want your ads to display, and also adjust the maximum bid levels based on these parameters. Site link extensions Site links allow you to present alternative links within your ad. In the example the consumer review publication Which? uses site links on the ad that displays for the terms ‘laptop reviews’ in order to present other related links. Star ratings The eagle eyed will have noticed that the Which? ad also has a star rating.
These ratings are in fact fully automated. However, in order to show, your business needs to hit certain criteria: 1) at least 30 reviews within the last 12 months; 2) an average rating of 3.5 or higher (so you will never show a poor star rating). The rating received is an aggregate from a number of sources, both Google (such as Google Certified Shops) and third-party review sites (Google lists over 30 and they include Bazaarvoice, Bizrate, Feefo, Reevoo and Trustpilot).
Measurement and optimization As we discuss later in the book, before looking into measurement it is essential to revisit your objectives, as this will help shape the measurement criteria used. For example, if your goal is to maximize market share then acquisition metrics should not be your number one priority. Traffic metrics ● Impression: each time your ad is displayed an impression is made. So 10 impressions = 10 views – or, more precisely, 10 ‘renders’, as of course there is no guarantee that the user actually looks at it. ● Click: (a no-brainer) a click is a user interacting with the ad by clicking on it. The end result is a visit to your site. ● Click-through rate (CTR): usually abbreviated to CTR, this is the ratio of the number of clicks to the number of impressions (clicks/ impressions). CTRs are influenced by ad position, ad copy and brand recognition. ● Cost per click (CPC): CPC is the average amount paid for a click. Of course this will fluctuate based on maximum bid levels and competitive pressure. ● Average position: the average position where your ad appears on the page (the very top of the page being first position).
Bear in mind that ad positions do fluctuate even if you are the highest bidder. Ad position is heavily influenced by your bid level but it is also influenced by quality score (see below). ● Impression share: a measure of how much of the available impressions you have captured, the maximum being position one for 100 per cent of the time. ● Quality score (QS): while not technically a traffic metric, quality score still needs close consideration as it has a direct relationship to ad position and therefore traffic potential. Conversion metrics ● Revenue generated: simply the value of the sales made. While interesting, it is margin that really counts. ● Margin generated: margin, or gross profit, gives a more accurate view of the profitability of paid search campaigns. ● Orders: the raw number of orders made. ● Leads: for some, typically B2B or companies selling high-value products, leads are the ultimate goal. Leads might be, for example, e-mail sign-up, application completion or request for brochures.
● Conversion rate: conversion rate is the ratio of orders/leads to the number of clicks. It is as much a measure of your site’s ability to convert traffic as the ad itself. ● Average order value (AOV): AOV speaks for itself and is an important metric to drill down on. Look for patterns over time and also differences in AOV for different ad groups. If one ad group has particularly low or high AOV, question why. It may be down to low/ high product cost/margin but also may reflect particularly good or bad ad copy or bidding strategy. Efficiency metrics ● Return on investment (ROI): the most common measure. While this can be a revenue measure (revenue derived/ad cost) it is better to consider profitability and use margin/ad cost.
Quality score Quality score is a Google metric and is a measure of the quality of the ad. The higher the quality score, the higher your position potential. If, for example, two advertisers both have a maximum bid of $10 but one has a higher quality score, the one with the higher quality score will likely be given the higher position. Indeed, even if the maximum bid for the company with the higher quality score was $9 they may still get the higher position. Why? Because Google wants to present ads that people will find relevant and click on. The quality score algorithm is not publicly available but some of the factors that contribute to a higher score are, including how long you have been advertising, your click-through rates (CTRs) and your ad relevancy.
Search networks Before you push your new paid search campaign live, be wary of checking the option to ‘also display ads on our search network’ (or similar). Checking this allows the search engine to display your ads on third-party sites that have signed up to their ad programme as a publisher. You will have very little control of where your ads are displayed and invariably performance is much lower (albeit so is the cost). The positive is that your reach is enhanced. When looking at paid search most of us will start with the Google product, Adwords.
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