SEM and Paid Search

SEM and Paid Search: What is it?
As defined by HubSpot, Search Engine Marketing is, “a term used to describe the various means of marketing a website via search engines, and entails both organic search engine optimization and paid search strategies.” In other words, SEM is a marketing strategy that seeks to enhance the visibility of websites, and drive traffic to an organizations website, via the combination of SEO and paid search. An important aspect of this definition is that SEM is the combination of both SEO and paid search, meaning that in order to have an effective search engine marketing strategy and drive traffic/conversions, organizations need to utilize both SEO and paid search tactics. Most of us are familiar with SEO, however if you aren’t you can check out my blog post on SEO and what the best practices are for increasing your “organic search” results.

Paid Search on the other hand is a new topic, and is opposite in nature of organic search being that it allows an organizations website/ad to show up on the search engines result page by paying a fee. HubSpot describes paid search as a marketing tool that, “allows you to pay a fee to have your website displayed on the search engine results page when someone types in specific keywords or phrases to the search engine.” The best way to think about the distinction between organic search and paid search is visually:

When looking at a Google page, the bulk of the results that show up on the search engine results page are organic search results, meaning the results that show up on that page are unpaid and the ranking is due in great part to SEO tactics. However, the paid search ads are displayed at the very top of the search engine results page and on the sides of the search engines results page. Thinking back to a Google page, normally the first few results have the word ad next to them and are separated by a line from the other results; these are the paid search ads that companies pay a fee to have come up when certain keywords or search terms match their ad.

Before moving on into how paid search works, there is a crucial aspect of SEM that organizations need to fully grasp. Again, search engine marketing combines both SEO and paid search, thus it is very important that organizations employ both of these strategies if they want to utilize SEM effectively. HubSpot offers a statistic that says, “most searchers click on the organic search results- in fact, over 70% of people click on the organic search results, while only 30% are likely to click on the paid links.” Here it is clear that there is a case for continuing to employ SEO tactics to increase organic search results, but that is not to say that organizations shouldn’t also utilize paid; they should. Organizations will benefit from using both SEM tactics because it will maximize their coverage on the search engine results page, ideally driving more traffic to their website.

SEM and Paid Search: How does it work?
The overarching concept of how paid search works is fairly simple and primarily revolves around the keywords that an organization selects that prompt their ad to be shown in the paid search results. HubSpot explains it clearly when they say, “You start out by giving Google a list of keywords, which tells Google to display your ads on the results page when people search for those keywords. You then design your ads to be shown for these keywords, and your goal is to make them both relevant enough to search query and attractive enough to get the searcher to click on them.” Essentially what HubSpot is saying is that when an organization creates their ad, they select keywords that consumers search for and these keywords prompt Google to display the organizations add when a searcher types them in in their search query. That being said, the next question you might have is “Don’t a lot of organizations designate the same keywords for their ads? And if that is the case, how does Google decide which ads to display on the search engine results page?” The answer: Pay –Per-Click Bidding or PPC

Pay Per Click
Pay-Per- Click is something extremely beneficial for organizations in paid search, because it requires that organizations pay for the ad only when a user actually clicks on the ad; this is opposed to paying per impression, where the ad may be displayed but no one clicks on it. But how does pay-per-click come into play in the selection of what organizations ads will be displayed when certain keywords are searched? The answer is via pay-per-click bidding. In a nutshell, each organization puts down a bid on “how much they value a click on their ad for that keyword” and the highest bids are what determines the placement of the ads on the search engine results page. For example, if someone values a click on their ad at $6 and that is the highest per click bid, that organization will likely receive one of the top spots above the organic search results, not a spot on the side. The spots on the side will go to the organizations that bid lower amounts per click. However, the bid amount is often not the amount an organization will actually have to pay-per-click; what an organization will end up paying per click is determined by the lowest bid. HubSpot states, “the lowest of these bids is used as the price for the least valuable (least visible) spot on the result page, and then each spot going in value (more visible placement) is priced at an incremental dollar value higher.” In addition to an organizations bid amount, HubSpot also discusses a term called quality score that Google AdWords utilizes and this score is considered in “determining whether or not your ad is served for a given keyword.” Put simply, quality score asses the landing pages that an ad leads to and overall relevancy to the keywords. Google AdWords combines bid amount, landing page relevance, ad formats, etc. to form their Ad Rank and choose the location of ads, it is not solely based on bid amount.

It is important for organizations to understand pay-per-click and PPC bidding, because it plays a large role in deciding if an organizations ad will be selected for certain search queries. Organizations can benefit from the PPC bidding strategy by placing higher bids on words that are more relevant to their ads; the higher the bid, the better the chance you ad will show up when certain words are searched. Organizations should take the time to look at search reports and understand the keywords/search terms that consumers use when performing a search query relevant to them. There are three types of keyword strategies that organizations can employ (exact, phrase, and broad match) and you can read more about when to use each of those in HubSpots ebook.

SEM and Paid Search: Why should organizations use it and how can they benefit?
A wise man once said, the main goal of digital marketing is to drive traffic to one’s website. Paid search joins in on this journey by helping marketers and organizations with several aspects of SEM:

  • The first reason that organizations should be employing paid search as part of their SEM strategy is because it can help organizations identify “new keywords” thus increasing traffic to their website. Google AdWords offers what they call a “Search Terms” report that “displays all of the keywords for which your ad has been displayed.” By analyzing the report and search terms that people are using in their search queries, organizations can identify new keywords that might be “worth adding” to the campaign. Organizations will benefit from adding new keywords because their ads will show up in more relevant searches, ideally increasing their click through rate and traffic to their site. In addition, relevant keywords will also lead to more relevant traffic to the site and bring in people that may actually take action on the landing page, thus leading to increased conversions for organizations.
  • The second reason that organizations should be utilizing paid search as part of their SEM strategy is it can increase overall brand awareness and, again, maximize search engine coverage. By bidding on an extensive amount of keywords, organizations can increase their number of impressions amongst users. Utilizing a lot of keywords will ensure that an organizations ad is popping up on a lot of different search queries, thus increasing exposure of the brand for the organization. However, if impressions and brand awareness is the overarching goal, the leads generated might not be as relevant as they would be if a more narrow keyword strategy was being employed. In addition, paid search will help increase overall brand awareness because it can compensate for lower organic search rankings. If an organization does not have a strong SEO strategy, they can still make themselves noticeable to searchers by placing paid ads on certain keyword searches.
  • A final reason, but certainly not the last reason, that organizations should employ paid search as part of their SEM strategy is because it can help test out various landing pages. The idea behind this tactic is fairly straight forward; an organization can link two different landing pages to the same ad, and then analyze the conversion rates of each. Put simply, we are just using a paid search ad as another form of A/B testing, which is crucial aspect of all digital marketing campaigns. Organizations can benefit from this aspect of paid search because it will help to optimize the landing pages that these paid ads are linking too; the ad will not do any good if it is clicked on and the user has no interest in exploring the page/offer. Making sure the landing page is successful is just as important as making sure your company is visible on search engines because if the landing page does not convert, the SEM strategy goes to waste.

A Note on Google AdWords:
Many of the concepts that have been discussed in this blog have come from both HubSpot and Google AdWords, however I wanted to take a second to clarify what Google AdWords is. Google AdWords is “Google’s online advertising program” and it is the program that backs any ads that one might see when doing a google search. In addition to placing ads on their search engine result pages, Google also places ads on their “owned properties” such as YouTube. AdWords ads, as discussed in the post, are very different from organic search results in that they “appear” on the top and sides of pages. They are matched and ordered as discussed above. Next week we will take a deep dive into the ins and outs of AdWords.

All Quotes and statistics came from the following sources:
fundamentals_binder (1): Fundamentals of Google AdWords
the-beginners-guide-to-paid-search: HubSpot ebook
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