A Quick History

Search engine advertisements are bought from search engine companies, such as Google, on the basis of “keywords” – words or phrases to match your ads with the descriptors that users are searching. Search engine marketing is comprised of two forms: search engine optimization (SEO or organic) and paid search.

In SEO, advertisers hire experts to optimize their content with the objective to win high rankings on the search engine results pages (SERPs). In paid search advertising, ads show near the occurrence of a search term on the SERP. For example, a pencil manufacturer selling purple pencils might pay a search engine company like Google to show their ad/link on the “purple pencils” SERP.

In the 1990s, paid search had a fragmented business model. “If search were a religion, it was polytheistic,” says Danny Sullivan, founding editor of SearchEngineLand.com. In the first generation of paid search, advertisers paid a fixed amount for a static listing; where they paid for the keyword and the spot on the SERP for a set period. It was unresponsive and unchangeable.

In 1997, the founder of Idea-lab, Bill Gross, started GoTo.com, a search engine marketing platform. GoTo was an early innovator in paid search by significantly lowering the risk for companies. Ads were linked to keywords, so advertisers big or small could bid exactly what they wanted. Advertisers were charged each time their ads were clicked, known as “pay-per-click” (PPC). This was a rupture point for paid search. In 2001, GoTo changed its name to Overture and did more than $1 billion in sales in 2013. They introduced the internet to pay-per-click pricing and auction selling. Yahoo! acquired Overture for $1.63 billion in 2013.

What About Google?

Today, Google is known as the behemoth of the internet. It is crazy to think that Overture, a company most of us have never heard of, was once eating Google for lunch.

Overture did not have a proprietary search algorithm. Rather, they were renting traffic from portals. Ultimately, Overture wasn’t getting the direct credit and was giving away up to 70 percent of revenues it received. Meanwhile, Google had a secret weapon, an algorithm that directed traffic to Google.

Google became a verb…

In February 2002, while Google was still the underdog to Overture, Google introduced a new pricing strategy called AdWords Select. It kept the auction bidding format, but integrated game-changing additions. Overture ranked search ads according to the price of the bid, while Google ranked advertisers based on their bid price multiplied by the click-through rate (CTR) of their ads. This meant an advertiser bidding less than the top bid could still win the top ranking ad position.

Suppose advertiser A is bidding $2 for the search term “didgeridoo” and advertiser B is bidding $1 for the same search term. Advertiser A has a CTR of 10% while B’s achieves 25%, which Google knows from previous ad results. Google’s genius was to give advertiser B the top ad position because Google knew they would yield more revenue by giving advertiser B the top slot based on this scenario. Unfortunately to Overture’s discredit, they would have given advertiser A the top position.

Google’s auction was also what it referred to as “second-price,” which means if the advertiser wins a bid, they only have to pay one penny more per click. than the bid just below theirs. Again, Google’s genius was knowing – as Nobel Prize winner William Vickrey proved mathematically –  that second-price auctions earn sellers just as much as first-place auctions. With AdWords, the advertiser got more for less.

Today, Google is Google because they have created a well-balanced ecosystem where both the advertiser and Google get what they want. But much like ExxonMobil’s dependence on fossil fuels, Google is also one-dimensional. In 2016, a whopping 87.94% of Google’s $90 billion in revenues were from advertising.

No. 01

The Future of Search Engine Marketing

Search engine marketing (SEM) is a major factor in almost every marketing mix. That is why every marketer wishes they could jump into a time machine to see where it is going.

To best predict the future of SEM, let’s first look at some Q1 2017 Google AdWords data:

  • Cost-per-clicks rose across all devices to the highest ever recorded
  • Google Shopping ad spend increased 44% YoY
  • Mobile click share now represents 59% of all paid search traffic
  • Mobile CPCs increased 40% YoY

It is time for companies to take the mobile user experience into their own hands. In November of 2016, Google started making mobile a priority. In fact, Google is in the midst of creating an entirely separate index for mobile, which is planned to be their primary mobile indexing algorithm by 2018. Soon, desktop will be number two to mobile.

Welcome to the mobile era! Smartphones have reached saturation in many parts of the globe including China, Canada, Japan, and the United States. To be successful in these markets, it’s no longer simply a bonus to be mobile friendly; it’s vital. Google’s product teams for their paid search platform, AdWords, is constantly releasing new betas and new features. It’s no surprise most new betas are typically mobile focused. Recently, Google released a new beta called “visual sitelinks.” Sitelinks are the part of a search ad that provides different links for users to navigate to various sections of an advertiser’s website. Instead of text sitelinks, the links are in the form of image ads presented in a carousel format. And, this sweet new beta is only available for mobile.

The Rise of Voice Search

User search data is evolving through more paths than just mobile’s takeover. In an SEO 2017 trends report, 39 experts were interviewed and asked the same question, “What are your top 3 SEO trends for 2017 and beyond?” First was optimizations for mobile. Second was quality content. And third was voice search. Today, over 500 million people use a voice-search powered device, and according to Tractica, half of all searches will be voice searches by 2020.

Paid voice search is coming sooner than you might think. Amazon’s Alexa, Apple’s Siri, Microsoft’s Cortana, and Google are battling it out with their respective paid voice assistant products.

Voice searches tend to be question- and location-based. Fundamentally, voice search results are singular as opposed to multiple search results on the typical search engine.

Paid Voice Search Issues:

  1. User trust is at risk since voice search to date has been organic. When a user asks a question, they generally receive the one answer the voice assistant deems best. Traditional paid non-voice search ads can be easily skipped using the human eye. With paid voice search, when the user asks a question like, “What is the best high-end Italian restaurant near me?” and hears an answer like “This ad is brought to you by Tony’s pizzeria where you can get the cheapest pizza in town,” the user’s trust is at risk.
  2. Since voice search generally spits out one result or answer to your question, how will smaller advertisers compete with the bigger guys?
  3. Since users will likely receive one result for their search query, ads may not be skippable. Sure, when a user is on YouTube or television, they will have to sit through an ad, but users just don’t like it.
No. 02

The Advantages of Paid Search

For comparison, let’s look at a display advertising example. A marketer must run a new acquisition display campaign on Facebook for his company, Bob’s Road Bikes. He or she creates a Facebook ad campaign targeting users aged 25 – 55 and also targets users interested in “road cycling.” The end user on the receiving side-say a 34-year-old woman who has shown interest in cylcing-is a product of disruptive marketing, since the user was served an ad for a product they weren’t actively searching. This form of campaign is also referred to as “top of the sales funnel,” since it’s an introduction to the product. Reach for this type of campaign on a platform like Facebook can be tremendous and can be an excellent way to introduce thousands of users to a brand. But conversion rates are typically much lower for display new acquisition campaigns.

Instead of a passive experience like seeing a display, which lacks user intent since the person targeted is not likely to be actively in the market for a bike, paid search generates what is called “intent based” traffic. By bidding on keywords like “road bikes,” the user can see an ad from Bob’s Road Bikes milliseconds after a search for “road bikes” on their search engine. A well constructed ad for the search query “road bikes” will inform the user of Bob’s Road Bikes, as well as provide additional information to pre-qualify the user before they click.

For instance, AdWords contains features such as “ad extensions” where the advertiser can highlight the following:

  • Primary value propositions via “callout” extensions
  • Types of bikes via “structured snippet” extensions
  • The price of the road bikes via “price” extensions
  • Bob’s Bikes phone number via “call” extensions
  • A phone # to receive text messages via “message” extensions
  • The location of Bob’s Road Bikes via “location” extensions
  • A review and quote from a published 3rd party source via “review” extensions

All ad extensions can be handcrafted to user searches. If the user is searching for “mountain bikes” instead of “road bikes,” then both the ad copy and the ad extensions can speak specifically to mountain bikes.

When the user sees the add after searching for “road bikes,” they know what category they are accessing, thus their click becomes more valuable to Bob’s Bikes.

The vast majority of paid search campaigns can be placed into two buckets:

NON-BRANDED:

  • Bidding on keywords like “mountain bike,” “road bike,” or “online bike store”
  • Non-branded is considered new acquisition, as it will generally show ads to users unfamiliar with Bob’s Road Bikes

BRANDED:

  • Bidding on brand related keywords such as “Bob’s Road Bikes” or “Bob’s Bicycles”
  • Branded campaigns are considered closer to the bottom of the sales funnel
  • Since users are actively searching for the Bob Bike’s brand, they have already made it through the top and middle of the sales funnel

5 Key Reasons for Adding Paid Search to Your Brand’s Marketing Mix:

1) Enhances Organic SEO

  • Paid search can provide valuable data for what keywords perform well for brands. Those words can then be leveraged to build SEO strategies.
  • Paid search can fill in the gaps where SEO is underperforming.

2) Faster Results than SEO

  • Because search engine optimization is based on content, it can take time to rank. With paid search, brands can rank for keywords immediately.

3) Tailored Messaging

  • Contrary to organic listings, which are more difficult to customize, brands can control exactly what is communicated to the user by each keyword search. This goes for branded campaigns as well. Users who are actively searching for “Bob’s Road Bikes” are likely to already be familiar with the brand, which provides an opportunity to test various copy and landing pages associated with a branded campaign.

4) Boosts Credibility

  • This is especially true when bidding on branded terms. If a user searches for “Bob’s Road Bikes” and sees both a robust paid ad plus an organic listing, it can create a positive perception. Add in a shopping ad to accompany a paid branded and organic search ad, and you’ll almost completely take over the home page of Google above the fold.

5) Less Exhaustible

  • Other forms of paid media can have limited reach and may become exhausted. There are only so many users on Instagram who are interested in mountain bikes and between the ages of 25 and 55. With paid search, it is search volume based and user intent is there every time someone searches for “mountain bikes.”
  • Generally speaking, paid search is scalable without experiencing the diminishing rate of return that is be experienced on other paid media channels like Facebook, Instagram, Twitter, and Snapchat.
No. 03

The Pitfalls of Paid Search

Paid search can seem deceptively simplistic: pick the keywords, write the ads, and reap the benefits. Bidding on a keyword to serve an ad is simple, but to run a consistent and effective paid search campaign requires patience, knowledge and timing. A search specialist must spend as much time regulating and optimizing campaigns as a stock investor spends managing their buys and sells.

Additional Paid Search Challenges

  • Picking the correct keywords takes expertise. It takes an understanding of the product, the market, and historical data.
  • Your competitors might be bidding on your search terms. Imagine your company name is XYZ and when you search for your company on Google, you see in the number one position your competitor’s ad. It’s frightening, but even more worrisome is the cost your business would have to pay to combat this.
  • The time users spend interacting with your ad is brief. About 95% of internet users spend time away from search engines, and roughly 5% of their time on the actual search engine where the ads are shown. Due to this time constraint, paid search ads must be concise and direct.
No. 04

Today’s Top Platforms and Their Differentiators

Google Adwords

AdWords is the most advanced search platform in the world. Google continues to innovate and their product offerings may be more immense than all other search platforms, combined.

Besides its enormous reach, AdWords offers every business:

Search Network

  • Ads in a Search Network campaign appear near Google search results and other Google sites when people search for terms that are relevant to your ad’s keywords.

Dynamic Search Ads

  • Ideal for advertisers with a well-developed website or a large inventory, Dynamic Search Ads use your website to target your ads and can help fill in the gaps of your keywords-based campaigns.

Shopping Ads

  • Utilize a product feed. Great for e-commerce brands with a lot of skews. The ads show the user a price, the brand, and product including an image, all at once.

YouTube

  • The 2nd largest search engine on the planet and it’s video based!
  • Brands can access new users or remarket users by telling more of a story on YouTube within the AdWords platform.

Google Display Network

  • Includes more than two million websites and reaching 90% of people on the Internet.
  • Unlike many other display networks, the GDN is on a CPC model, which can be great for direct response.

Gmail Ads

  • Access users in their mailboxes on one of the world’s largest email providers, right within the AdWords platform.

Google Analytics

  • The world’s largest freemium web analytics service is integrated with AdWords, allowing marketers to easily track conversions, test landing pages, track engagement like average session duration, and more!
  • Undoubtedly, this is yet another huge advance by AdWords. With other search engines, the tracking capabilities can be less thorough and will typically require placing custom codes on the advertiser’s website.

Bing

  • Bing received over 50 million searches each month in 2016 and 2017. The unique reach is there, so it is definitely worth testing.
  • Bing stated, “The Bing Network audience spends 25 percent more time online than average internet searchers.”
  • Bing users also tend to have more disposable income on average than Googlers, and their demographic skews older. Yes, the older crowd has trouble changing their default browsers on their PCs from Bing to another browser.  

Gemini

  • Yahoo!’s Gemini has been powered by Bing since late 2011.
  • Yahoo! is #3 worldwide in search and should not be overlooked.

Duck Duck Go

  • This search platform may be the most unique. Duck Duck Go actually does not track users and their SERPs aren’t loaded with ads. This attracts a certain type of user which may be the right one for your brand.
  • Clean user interface

Ask.com

  • Formerly know as “Ask Jeeves,” Ask.com controls 3% of the search market.
  • Predicated on a question and answer format, Ask.com has uniquely differentiated itself.
No. 05

The Must Knows if You Have Never Tried Paid Search

Be sure users are searching for your product.

If a certain brand’s product is unique in the space, chances are that search volume is low for the product. Let’s say a brand called “CoolMe Nightly” sells a mini air conditioner for beds. Implying this product is unique in their space, search volume for keywords like “bed coolers” is low and this advertiser can resort to bidding on lower converting, less direct keywords such as “how to prevent night sweats?”

Does your brand have a true differentiator?

With paid search, it can be difficult to tell a thorough story. For example, if a company sells socks on a subscription model, they may compete with other competitors that are also bidding on keywords like “sock subscription.” It’s important this sock company differentiates itself from the others through unique, creative search ads that differentiate itself from competitors.

Conclusion:

There are numerous ways to acquire new users for your business, but there is really only one avenue that is always intent driven and allows almost full control over matching your product to the users need.

Think of the power of paid search like this: your site sells men’s razor blades, and with the click of a button you can sell to people around the world who specifically want to men’s razor blades. Has marketing ever been so razor-focused?!

There are a slew of ways to execute paid search and there is bound to be one that works for your business whether you know it or not.

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