Digital Marketing Education- Paid Search

This Digital Marketing Education topic the next two weeks is Paid search marketing which means you advertise within the sponsored listings of a search engine or a partner site by paying each time your ad is clicked (pay-per-click – PPC). As an example, when a user searches for ‘buy digital marketing textbooks’ on a search engine, the search engine results page (SERP) reveals the following:

 Why should you use paid search?

1) Appearance at the top of the SERPs. With organic results decreasing rapidly further down the screen, it’s vital that your company appears within the top five results in order to stand a chance of click-through.

2) PPC is the fastest way to get to the top. If you know your way around the platform, you can set up a PPC campaign in less than an hour, and appear immediately in the sponsored results.

3) Tracking is a lot easier using SEM.  You no longer have to take a gamble on ads you’ve paid for in advance in other media, with little way to measure how successful they are. With SEM every ad, keyword and penny spent can be tracked, allowing for a more accurate ROI. This also means it’s a lot easier for an advertiser to test campaigns too.

All of this, along with access to the respective search engine’s network sites and platforms included in its packages, and the ability to schedule ads and target them to specific locations and times, means that paid search is an almost essential part of your marketing strategy.

Google AdWords 

AdWords is Google’s own advertising product. It offers PPC and CPM advertising as well as site targeted banner, text and rich media and  is also Google’s main source of revenue.

If you use its service you will be able show your ads on one or both of Google’s advertising networks:
1. The Google Search Network, featuring the standard Google Search, Google Shopping, Maps and its various search partners. This will be discussed in Stukent chapter 6.
2. Google Display Network, which is any website that partners with Google, and other Google sites such as Gmail, YouTube and Blogger. This will be discussed in Stukent chapter 7.

With AdWords, if you choose CPC, you can set your bid (the amount you’re willing to pay for each click) to manual or automatic. With manual you choose your bid amounts, with automatic Google chooses the bid amount for you within your budget.) With CPC and CPM you can set your maximum bid amount.

Buying Ad Space

When a company chooses to advertise on a billboard, it picks a billboard and pays a set rate per month to keep its ad on that billboard. While that rate could change at some point, the advertiser might go years paying the same price per month for the same ad to appear on the same billboard. With paid search advertising, the price paid to advertise on any given keyword is dynamic—it could change from one minute to the next. Stukent chapter 6 explains how to buy ad space and how search engines determine where to show an ad.

Cost-per-Click Bidding. Search engines sell keyword ad space using an automated auction platform. In simplistic terms, advertisers place a bid on a keyword (instruct the search engine the maximum amount they are willing to pay for a click from a searcher who has searched for that keyword), and the winning bid gets the best ad location for searches on that keyword. However, the bid from each advertiser is not the only factor that determines which ad “wins the auction” and ranks higher than the other ads. The Ad Rank (advertising position) of each advertiser is also determined by the ad’s Quality Score.

The maximum CPC bid is the amount the advertiser agrees to pay for a click. The actual CPC is the amount the advertiser ends up paying when a searcher clicks on his/her ad. These two amounts are typically different because the actual CPC is usually lower than the maximum CPC. Google explains it this way:

“If the advertiser immediately below you bids US$2.00, and if that advertiser’s ad is the same quality as yours (and has equal-performing extensions and ad formats), you’d typically need to bid a penny more than US$2.00 to rank higher than that advertiser and still maintain your position and ad formats. With AdWords, that’s the most you’ll pay (about US$2.01), whether your bid is US$3.00, US$5.00, or more.”

This auction model Google uses is called a second-price auction. In a second-price auction, the winner does not pay what he bid but instead pays a penny more than the bid of the next-highest bidder. In AdWords, rather than paying the CPC amount he bid, an advertiser will pay one penny more than the bid of the advertiser below him.

Average Ad Position. Just because an advertiser is the highest bidder on any given keyword does not mean he will always have the number one ad spot. In fact, advertisers commonly bid less and yet rank higher than another advertiser. Search engines are driven to make money off of advertisers, but at the same time, they use a metric called Ad Rank to ensure that the advertisers showing up in search results are relevant to the keyword being searched. Google defines Ad Rank as “a value that’s used to determine your ad position, where ads are shown on a page. Ad Rank is calculated using your bid amount and Quality Score”

To learn more about Ad Rank, please watch the following video:

These are some of the basics of Paid Search Marketing and I look forward to our class discussions.

About Professor Pepe

family man and marketing professor; digital marketing, sports, hard rock, pets,& fitness enthusiast
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50 Responses to Digital Marketing Education- Paid Search

  1. When buying ad space, a metric called Ad rank is used to ensure that the advertisements showing up on the SERP is relevant to the keyword being searched. This metric is calculated using both the bid amount and quality score.

    Liked by 2 people

  2. An advertiser who is the highest bidder may not always be given the top ad spot. It is common for advertisers to bid less and outrank their competitors. This occurs do to the fact search engines use Ad Rank. Ad Rank is way to make sure that relevant results come up on the SERP when a keyword is used.

    Liked by 1 person

  3. When buying ad space, a company will only have to pay for that space when a user clicks on the link on the search engine results page.

    Like

    • Courtney Baldwin says:

      One example of buying ad space is cost per click bidding. In this method, the top space on a search engine is based upon bid/ ad rank.

      Like

  4. Neal Bailey says:

    When making use of Google AdWords, their keyword planner will help generate possible keywords relevant to your site, as well as the current bids and competition levels for those keywords.

    Liked by 1 person

  5. Great article! Google’s PPC is a great method because we as marketers can place an ad on the top spot on Google (“hot spot”), after using the Google Keyword planner tool to find the best keywords to use, and it can get multiple impressions, but we only have to pay when the ad is actually clicked on. It is a great opportunity for us as marketers to spread awareness.

    Like

    • justkeepswimming07 says:

      I agree! I think it is important as marketers to understand how to make your website appear towards the top of a google search page when the certain keywords are put it. Marketers must take into account both their quality score and bit amount when they are trying to improve Ad Rank.

      Like

  6. sienastyles says:

    Ad Rank is important to us as digital marketers because the highest bidder isn’t always the one who gets the highest ad spot. Google also considers the relevance of your landing page, which is important to consider when designing your webpage and when using Google Keyword Planner.

    Like

  7. Sarah Federation says:

    Google Adwords gives marketers the upper hand. There are no more gambles, as a marketer you have the ability to track various statistics, every ad, keyword and penny spent can be tracked, allowing for a more accurate ROI. Google Adwords will be a pivotal aspect of the marketing strategy as it allows you to pinpoint where there is more competition and even number of searches.

    Like

  8. It is important for a company to show up towards the top of the search engine results page in order to generate traffic. One way of doing this is to use the pay-per-click method when designing an ad. Using the PPC method ensures that the ad can easily be tracked, as well as easily created.

    Like

  9. Ad space can be purchased by placing a bid in an automated auction platform. However, Ad Rank is not solely based upon your bid amount. Google calculates Ad Rank by combining your bid with your website’s quality score, which is comprised of expected CTR, relevance, and landing page experience.

    Like

  10. Cost-per-click bidding is not all about how much an advertiser is willing to bid. Google has to take into account the quality of the advertisement, which is where quality score comes into play. Your quality score takes into account click through rate, relevance, and your landing page experience. This is where Google Adwords can be helpful to ensure you are using keywords that will make your ad relevant to certain searches. You also need to make sure that your ad is fulfilling the needs of people who click on it. Google gets paid by the advertiser every time the ad is clicked, but they still want to make sure the person clicking it is getting what they expect from the ad. If your advertisement leads to a page that has a high bounce rate, meaning people typically go back to the SERP, you will not be given the best ad location even if you have the highest bid.

    Like

  11. Nicolas Earl says:

    The price paid to advertise a given keyword is constantly fluctuating. Price fluctuation may be due to changing consumer trends, increased searches for a specific topic, and what competitors are willing to pay for the keyword.

    Like

  12. Ad Rank is determined by bids and quality scores. One’s bid is essentially the maximum price one wants to pay every time someone clicks on their ad. Quality score is based on the relevance and usefulness of your ads, keywords, and website landing page as well as the likelihood that users will click on your ad. This comprises the formula for how your ad will rank.

    Like

  13. Shelby Gipp says:

    Paid search can play a big role in making sure you generate conversions and traffic to your website. Having Google show your ad at the top of the SERP above the organic search results is a great way to advertise. When a user clicks on your paid ad, your company or business will owe Google a certain amount of money per click that you initially bid on.

    Like

  14. Anonymous says:

    Ad ranking in vital in today’s markets, competing for the top spots on a search engine can be difficult. However, with paid search companies are charged a small fee when a consumer links on their ad link. This small fee is nothing to the company, especially if it get the consumer on their webpage resulting in purchases of an amount greater than the price per click.

    Like

  15. Ad ranking in vital in today’s markets, competing for the top spots on a search engine can be difficult. However, with paid search companies are charged a small fee when a consumer links on their ad link. This small fee is nothing to the company, especially if it get the consumer on their webpage resulting in purchases of an amount greater than the price per click.

    Like

    • Large companies are ok with this pay per click ideology because the money that they are spending putting their advertisements on Google has the potential to increase their revenue greatly. This is likely why paid search is appealing to so many larger corporations.

      Like

  16. Google has two advertising Networks. One is called “The Google Search Network” and “The Google Display Network”. The Google Search Network features only Googles network’s such as shopping, maps, and other Google search partners. The Google Display Network is any website that partners with google, including google owned companies like youtube, gmail and blogger.

    Like

  17. John Blanchard says:

    Companies combine to pay around $90 billion annually on Paid Search campaigns on Google Adwords alone. It is an excellent way to boost traffic and hopefully conversions for a website, and is the most accurate way to target consumers when done properly.

    Like

  18. Google Adwords gives you better options using keywords to increase your SEO. SEO is where you will pop up on a google search, either the first page or another one. Using Google Adwords you can find the best option to increase your click through rate and have a higher SEO.

    Liked by 1 person

  19. sadiethegermanindiandog says:

    Paid search is the best way to get recognized! This makes it so that you are near the top of the first page, where as while organic search can land you pretty much anywhere. Using Google Adword is a great way to develop a well done paid ad.

    Liked by 1 person

  20. Ashley Nguyen says:

    The ads on Google Adwords show ads that a company paid for so that people will notice their business whenever they’re searching on Google. These advertiments only have to pay whenever someone clicks on their ad.

    Like

  21. k16wals says:

    Google Adwords is a great tool for marketers in hopes of increasing their SEO. By using this tool, Google Adwords provides information such as the search volume for a specific keyword, alternative keywords (by relevance), as well as competition and average bid for those keywords. Marketers can place bids on keywords and the winning bid gets the best ad location for searches for that keyword. By doing this, you can bring more awareness to you website, thus increasing your SEO.

    Like

  22. Paid search marketing are used to link a certain ad with searchers who are looking for what you provide. Pay per click is a successful form of paid marketing search because you are bidding for where your ad is is placed in a search engine. You then pay the search engine a small amount of money for each click.

    Like

  23. girlswholikefootball says:

    By creating a number of different versions of an ad you are able to see which ones attract the most clicks by running them at the same time. This will then let you know whether adding a call to action will improve the click through rate.

    Like

  24. What is interesting about buying ad space through paid search advertising is that one day the price to advertise may be $8 and the next it could be $15. The price to advertise on a certain keyword is ever changing and dynamic.

    Like

  25. A useful tool to be aware of is the ability to instruct the search engine to not use certain words. If you are a retailer and you don’t sell a certain item you can check off that you do not want your site to come up under that key word. In marketing it is important to have a good reputation and this helps to not give consumers the wrong idea about what you sell.

    Like

  26. When an advertiser is deciding what ad is best for their website, they should consider using the A/B test. This allows them to create multiple ads and decide which ad is bringing more clicks and views to their website.

    Like

  27. Martin Miggs says:

    With paid SEO, the quality score of your website is an important factor in your page ranking. It is not always the highest bidder who gets the top spot.

    Like

  28. Anonymous says:

    I think it is very interesting that keywords have such a strong affect. Specifically, on Google searches and with Ad bidding. I also think it is great that with a paid search, SEM gives us marketers the opportunity to look at a ton of information. This means that there is enough information for us to accurately test the campaigns to see how they are doing and if we are getting a good ROI. Along with paid search, we also have the capability to set a specific time and location for the ads which is important to know and control in the marketing strategy.

    Like

  29. I think it is very interesting that keywords have such a strong affect. Specifically, on Google searches and with Ad bidding. I also think it is great that with a paid search, SEM gives us marketers the opportunity to look at a ton of information. This means that there is enough information for us to accurately test the campaigns to see how they are doing and if we are getting a good ROI. Along with paid search, we also have the capability to set a specific time and location for the ads which is important to know and control in the marketing strategy.

    Like

  30. Google Adwords develops options using keywords to increase your search engine optimization. SEO is where your site will show up on a google search depending on the keyword that is being used. With Google Adwords, you develop the highest searched keywords to increase your click-through rate to have a stronger SEO.

    Like

  31. Great article !
    People often have the unconscious bias that the more they spend, the best rank they will get. WROOOONG! What really matters is to have a higher overall (a good competitive CPC bid and a high quality score (relevance and usefulness of the ad, keyword and landing page).
    The most important is that consumers find what they are looking for when they click on an ad, they do not want the home page to open or any other irrelevant pages, that is why ads need to be descriptive.

    Like

  32. bensbeerweb says:

    Paid search is a great way for small businesses to increase traffic to their website. Also paying to be on more websites besides Google will increase SERP ranking making customers more likely to click on your website. Keywords are the name of the game for search engines and with millions of websites out there businesses need to do whatever it takes to get noticed.

    Like

  33. To improve companies SEO(search engine optimization) we can use paid services like google adwords to improve our SEO. And we can do this by looking at different keywords that relate to our product or our competitors product. An example of this is when you search for running shoes, you may see two different companies like nike or new balance fighting for the top ad search spots. If we are able to get on the first page through paid advertisement then we have an advantage over our competitors. But if we can also get on that first page without having to pay, then we are in a great spot.

    Like

  34. GoogleAd words seems to be a great tool for marketers.
    If you use its service you will be able show your ads on one or both of Google’s advertising networks. Both are called The Google Search Network and Google Display Network,

    Like

  35. de07heck says:

    Interesting Article! Paid search is a great way for small companies to increase their revenue. Google Adwords is a great tool to help with this. Google AdWords can help you point out popular keywords that can link your page to the top when someone is searching for something.

    Like

  36. Your Ad Rank value is what determines your ad position and where you are located on the page. This is calculated using both your bid amount and quality score.

    Like

  37. Lifeasatraveler says:

    Paying only 1 penny more than the second highest bid is such a great perk with google. If a company has a quality ad they can ensure a high rank on the SERP without paying their top dollar. This can make the ad very worthwhile for the business.

    Like

  38. Nice work! Cost per click bidding is one of the most popular ways to buy ad space, however, due to Ad Rank your advertisement may not appear first on the list. Ad Rank uses keywords to determine what is displayed to ensure that it is relevant.

    Like

  39. As a digital marketer it is essential to take into account the concepts spoken about within your post. By utilizing these tools, a digital marketer can increase search traffic along with increasing ad rank to ensure that their post’s are being seen and appearing higher up in the search rankings.

    Like

  40. collegehealth282 says:

    Compared to CPC bidding, a bidder in Adwords only has to pay a penny more to contain their position in front of the next advertiser on a search page in Google.

    Like

  41. Great work! Paid Search Marketing (known as pay per click marketing) is one of the best ways to help a business receive consistent traffic from relevant search results on google, along with other websites. An example would be if I were to go into Google and I would search best 12 pizza places in Colonie New York. Google will then yield types of search results being, organic (on the left hand side) and sponsored (right hand side, or possibly at the top). From there, consumers will be able to click on the most relevant ad for what they searched up, which in this case would be best pizza places in Colonie New York.

    Like

  42. Pay per click might sound like the costs will certainly add up, but with a well designed strategy, consumers will only see/click your add when they are searching specifically for what your site is offering.
    -Scott Gurnick

    Liked by 1 person

  43. Troy Zellars says:

    Even if your company is the highest bidder on a keyword they still might not get the best location for their particular add they want people to see. The ad’s quality score is also taken into account and this is a great thing so that the best ads are the ones that are being seen.

    Like

  44. beaches&food says:

    Advertisers are always investigating a cost-effective way to show their advertisements to other viewers. Pay Per-Click allows advertisers to have a constant flow of traffic to their site without having to pay for the ad to appear. With Pay Per-Click advertisers will receive will more traffic the more often someone clicks on their advertisement and therefore receive more business.

    Like

  45. Lisa Musico says:

    SEO may target different kinds of search, including image search, video search, academic search, news search, and industry specific vertical search engines. SEO differs from local search engine optimization in that the latter is focused on optimizing a business’ online presence.

    Like

  46. Mariana Lia says:

    Exactly, even if you bid the highest on a keyword, its not necessarily true that you will get the first ad spot, so don’t think that you need to bid more to come in first. Google is still going use Ad Rank to make sure the ads that come up on the SERP are the most relevant to what someone is searching. Keep this in mind everyone! 🙂

    Like

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