Search advertising, also called pay-per-click (PPC) advertising, is a way to advertise your business or product directly on search engine results pages, where the advertiser pays only for each click on their advert. Search advertising continues to evolve, and formats available range from simple text adverts through to rich media banners and even video adverts. PPC advertising revolutionised the online advertising industry, and today, search advertising generates 95% of Google’s revenue (Peterson, 2013).
Adverts on search engines are easy to spot – they’re clearly labelled as advertising and are separated from organic search results. They can appear on the top of the results page, usually in a box, and also on the right hand side of the results page.
Figure 1. Search adverts appearing in a search for digital marketing.
Search advertising on search engines is keyword based – this means that it is triggered by the search term that a user enters into a search engine. Advertisers target the keywords for which they want to appear.
For the advertiser, the beauty of search advertising is that adverts are displayed when potential customers are already expressing intent – they are searching for a product or service. It allows advertisers to present their offering to a potential customer who is already in the buying cycle.
Google is, by a wide margin, the leader in the search advertising field; because of this, the post is very Google-centric, though the same principle should apply to any other search advertising platforms. Other platforms to be aware of are Bing, Yahoo and Baidu.
In this post, you will learn:
- How to put together a search advert
- How to target your search ad at relevant users
- The process of bidding on key phrases and how this affects your ranking
- How to plan, set up and run your own search advertising campaign
Search Engine Advertising
Search engines display results to search queries based on proprietary algorithms. Each major search engine uses its own formula to determine what results to display for any term. 73% of all Africans use search engines, and 59% of them use search engines daily; on top of that, 91% of people who use search engines say that they find the information they are looking for most or all of the time. With search engines getting so much traffic, and delivering so much value, they need to find a way of generating revenue.
With so many search engines out there, which platform should you choose?
There are some small differences from platform to platform in terms of editorial policy, and each system has a different user interface. There is some theory that different platforms are better for different industries, for example, that Yahoo fares better than Google on travel advertising. However, this is subjective, and most large advertisers will run PPC campaigns on a number of platforms. As with most things in digital marketing, it is all about testing.
Google AdWords is the best known and is considered the industry standard; it allows users to transact in the currency of their choice, is tied to a comprehensive analytics tool, and offers training programmes and certifications. Google AdWords also currently has the best contextual and geographical targeting worldwide, although geo-targeting is also offered by Bing Ads, Facebook Ads, LinkedIn Ads and YouTube video ads (which is closely linked to AdWords).
Structuring your search advertising campaign
When you start running search advertising, you shouldn’t just create a whole stream of ads – you need to have a plan. Your AdWords account is your home for all the ads you are currently running, and it should be structured to reflect your business and marketing strategy. Within your account, organise your search adverts in groupings – called campaigns – according to your strategy and the ads you are running. Within each campaign, you should have ad groups – these are sets of ads that have a common characteristic or focus.
For example, if you are selling books online, you may have ad groups focused around a specific genre, author, event and special offer, as well as some ad groups around general themes such as promoting local stores, or making online sales.
Figure 2. The main constituents of an AdWords campaign. (Source: Google, 2008)
Structuring your account in this way will help you to easily oversee your advertising spend, determine the effectiveness of your ads, manage your ads and bids, and switch off any ads that aren’t working effectively.
The Elements of a Search Adverts
Basic search adverts all follow a similar format:
- Two lines of advert copy. Sometimes shown on one line.
- Ad extension
As you can see, these consist of several elements – the key is to make these work together harmoniously in order to get searchers to click through to your website.
The three main components are:
- Keyword-optimised ad text
- The link to your owned property (website, social media platform, content)
- Ad extensions
The ad text is the main component of a search ad. Search engines limit the characters in each line. There are also restrictions on what you are allowed to write in an advert.
Here are some of the editorial guidelines from Google AdWords:
- Heading: maximum of 25 characters
- Line 1: maximum of 35 characters
- Line 2: maximum of 35 characters
- Display URL: maximum of 35 characters
- No repeated exclamation marks.
- No word may be written in capitals only.
- No nonsense words may be used.
- No claims of ‘best’, ‘number one’ or superlatives may be used unless they can be verified by a reliable third-party source.
- Product numbers may be used.
- No phone numbers allowed in the copy.
Writing Effective Copy
For most PPC adverts, the advert copy is the only tool available to attract attention, convey a message and entice action. This is why writing effective advert copy is such an important skill for search advertising.
People who are searching for something usually have a specific intent – they are looking for information, guidance, comparisons, tools, or solutions to their problems. It’s important to understand why somebody would look for your brand or product – and what keywords they would use to find it – when crafting your search ads. Look at the considerations for choosing keywords that are covered in the Search Engine Optimisation post – these often overlap.
Use compelling and well-crafted Calls to Action so that users know what to do and what to expect: ‘try now’, ‘sign up now’, ‘buy now’. Many advertisers test offers in the advert copy, such as a discount or limitedtime voucher. Product or service benefits make for good advert copy, such as free shipping, secure shopping or fast delivery.
If you are running many ads at once, it can be quite a lot of work to create unique copy for each one. Dynamic keyword insertion (inserting the search keyword dynamically into the advert copy that appears) or using the keyword in the advert copy can help.
Dynamic keyword insertion takes the keyword in your campaign that matches with the user search query and inserts it into the ad automatically. This way, the ad looks more relevant to the user than a generic ad. The search engine will mark words that match the search term in bold, making the advert stand out a little bit more.
The downside of using dynamic keyword insertion is that you have less control over when an ad is shown to a user, and the results may not be as good as with a standard SEM campaign. The goal is to generate as many clicks as possible, but sometimes the advertiser is better off with fewer, high-quality clicks that generate actual sales.
Figure 3. An example of long tail keywords.
This is sometimes referred to as the long tail of search. Discovering these low volume, niche search terms can do wonders for a search advertising campaign. Generally there is not much competition for these search terms, and the search term itself is very much targeted, so it will likely be cheaper to bid on and may yield a high conversion rate. While long-tail phrases are generally cheaper and lead to a higher rate of conversions, you will need to use a much larger number of them to make up for the lower traffic volume that they generate.
Also consider that search engine users may be at various stages of the buying cycle, and it could be worthwhile to craft a long-tail keyword strategy targeting those who are at the end of the buying cycle and know specifically what they are looking for.
For example, if you sell cameras, targeting the term ‘camera’ may not bring in much targeted traffic (since someone searching for ‘camera’ may be looking for information, pictures, price comparisons, or even something completely unrelated). But someone looking for ‘buy Canon DSLR camera in London’ has a clear intention in mind and could be a great target for advertising.
Search ads allow you to include a display URL. The URL shown is not necessarily the URL that the user will click through to – the display URL (what is shown on the advert) actually directs to the destination URL (what the actual URL of the page is). The display URL is sometimes also called a vanity URL.
Figure 4. A Google search advert with a clear display URL.
The display URL must be the same domain as the destination URL. Google will show only one advert per domain. The page that the user is taken to is called the landing page, which can be any page on your website, not necessarily the home page. The aim should be to send users to a web page that is as specific to their search, and the PPC advert, as possible. This is known as deep-linking.
Search advertising is not just about creating adverts and bidding for keywords. The process continues once a user has clicked on your advert. The page that the user reaches by clicking on an advert is called a landing page – either an existing page on your website, or a new custom-built page for the campaign at hand (useful if you are running a competition or special offer).
Figure 5. The Social Safe landing and home page.
Landing pages can make or break an advertising campaign. Poorly executed PPC campaigns will send all users to the home page of a website. Campaigns that convert will make sure that users land on a page that is relevant to their search with a very visible Call to Action. The aim is to keep the user as focused on the goal – conversion – as possible. Sending users to the home page gives them too many other options to choose from. For example, if someone searched for ‘Canon EOS 450D’, a poorly run campaign would send that user to www.canon.co.uk.
A better campaign would have the user clicking through to www.canon.co.uk/For_Home/Product_Finder/Cameras/Digital_SLR/EOS_450D/index.asp.
Landing pages also indicate relevance to the search engine, which can increase the Quality Score of the advert, and in turn lower the cost per click (CPC) of the keyword. Adding keyword-rich pages to the website can also have SEO benefits. PPC campaigns often have thousands of keywords, which can mean that you will have a lot of landing pages to build. Creating dynamic landing pages means that with a simple script, unique keyword-rich landing pages can be created for every search. The script will take the keyword that the searcher has used, and insert it in predefined places on the landing page. The user will then be landing on a page that is highly relevant to their search.
Google offers several ways to add value or information to search adverts. These are referred to as Ad Extensions. For a search advertiser, the Ad Extensions offer a way to get additional information into a search advert without affecting standard advert copy limits.
AdWords Currently Offers seven Text Ad Extensions:
1. Location Extensions
Location extensions allow you to add location information and maps to your advert. To use the extensions, you can either insert your address manually or link your AdWords account to your Google+ Local (www.google.com/local) account.
Figure 6. A location extension.
2. Call Extensions
The call extension allows you to display a local phone number in a line below the standard text advert. This is particularly effective in mobile ads, where the user can click and call directly from their phone.
Figure 7. A call extension. (Source: Google)
3. Social Extensions
The social extension indicates how many Google+ users have +1ed or followed the brand. This provides added social relevance on search results and is also a contributor to ad quality score.
Figure 8. A social extension. (Source: Google)
4. Seller Ratings
Google will match the domain used in the advert to review sites and display rating information together with your text ad. This is very useful if you have excellent ratings!
Figure 9. A seller rating extension. (Source: Google)
Sitelinks allow you to display up to six additional links, each with a unique destination URL, with your advert. Each link is limited to 35 characters. Sitelinks allow you to direct users to more relevant areas of your website, all from one advert. They are suitable for advertising on more general or branded keywords.
Figure 10. An example of an advert with sitelinks extensions. (Source: Google)
6. Offer Extensions
By linking your AdWords account to your Google Merchant Center account and supplying a product feed, you are able to include product images in your search adverts when available. This is particularly useful for eCommerce advertisers.
Figure 11. An offer extension. (Source: Google)
7. Image Extensions
At the time of writing, these are still in beta, with only a few advertisers allowed to use them. These allow images in ads to extend, so that advertisers can promote products through an image directly from the ad itself.
Figure 12. An example of an image ad extension. (Source: Google)
Search adverts are targeted in a variety of ways, depending on how you want to reach your intended audience. Targeting your adverts means you know that the traffic you are getting is relevant to your product.
Keywords and Match Types
It’s not enough simply to pick the right keywords; you need to know about the different ways in which the search engine interprets and matches the search term to your chosen keyword. Most search engines require the advertiser to enter the search keywords for which their advert should appear.
Considering the massive volume of searches conducted every day, it would be impossible to determine all the possible terms potential customers might use to find you. That is why there are different keyword match types for search advertising.
Google AdWords using the following match types:
- Broad match
- Broad match modifier
- Phrase match
- Exact match
- Negative match
This means that your advert will appear for the keywords you have entered, as well as search terms that contain your keywords and any other words in any order, as well as some variations of your keywords (such as misspellings and synonyms).
The broad match modifier is an additional targeting option that gives you tighter control than broad match (by excluding synonyms but including other versions of the word, such as plurals. It’s implemented with a + before the keyword.
Phrase match, which is denoted with quotation marks around the keywords (‘phrase match’) means that your advert will appear only for search terms that have your keywords in them, in the same order, though other words may also be in the search term.
Exact match, denoted by square brackets ([exact match]), means that the advert will appear for search terms only exactly the same as the keywords selected.
Negative match, denoted by using a dash in front of the keywords (–negative), means that your advert will not appear in searches using that word, no matter what other words are used.
Figure 13. How search engines interpret and match search terms. (Source: Google)
Advertisers can assign as many keywords as they want to an advert, but only one advert for each URL will be shown. If two advertisers are bidding to show adverts for the same domain, only one will be shown. Which advert will be shown is based on the bids being placed and on the quality of the adverts – more on that later.
Language and Location Targeting
Search engines have versions customised for specific regions and languages, based on the user’s settings and where in the world they are searching from. As a search marketer, you can choose the language and the location of the search engine to target. This is known as geo-targeting. For example, you may want your advert to show only to English searches in Asia, or to French searches in Johannesburg. Targeting your advert means that your ads won’t be seen by people outside your target area, and you won’t pay for traffic that you cannot convert into customers.
Behavioural and Demographic Targeting
Search advertising can also be targeted based on personal behaviour. Using AdWords, you can re-target visitors who came to your site via an AdWords advert based on actions that they took. This means that if someone came to your site, but did not complete a purchase, you can target adverts to them in the SERPs (or through other online advertising channels, such as the Google Display Network). This is called re-marketing or re-targeting, and can be very effective for remaining top of mind until the user is ready to convert. It is usually advisable to cap the number of times a re-marketing ad is shown to an individual to avoid annoying them.
Bidding and Ranking for Search Ads
As you know, search adverts are charged on a per-click basis. The cost that you pay for every click is determined by a variety of factors, and is based on a bidding system.
The different advertising platforms offer advanced bidding options, all aimed at helping you to run your advertising campaign better. You can bid for placement on the SERP, or you can bid based on how much you are willing to pay per click. You are also able to tailor your approach to, for example, bidding for adverts during certain times of the day only.
Search advertising is usually run as a Vickrey auction model, so advertisers place bids to appear based on certain criteria. The advertising platform determines when adverts are eligible to appear and serves them as appropriate. The advertiser then pays the advertising platform when their advert is clicked on.
Figure 14. Three advertisers bidding on the same key phrase.
With search advertising, the advertiser:
- Creates the copy for an advertisement.
- Determines the landing page for the advert.
- Selects the keywords or criteria for which that advertisement should appear.
- Chooses the maximum amount – the cost per click (CPC) – that they are willing to pay for a click on the advert.
The advertising platform:
- Checks the advert for compliance with editorial guidelines.
- Displays the advert for relevant search queries or other criteria.
- Determines the rank of the advert based on the advertiser’s maximum bid and the relevance of the advert (which includes factors such as clickthrough rate, ad copy, keyword and landing page relevance).
- In Google AdWords, as well as deciding on your CPC bids for your keywords, you are able to set budgets for your campaign. You can set daily budgets, monthly budgets, or no budget. Once your total is reached, your adverts no longer run, so you can be sure that you never overspend. If you are concerned about overspending, you can set a daily budget. However, this can mean that your adverts do not run as often as you would like them to.
Conversion and Clickthrough Rates
Search engines look at factors such as relevancy to try to ensure that it is not just advertisers with deep pockets that can land the top ad listing. Search engines need to ensure that users find the adverts relevant, otherwise they’ll be less likely to click on them – and no click means no revenue for the search engine.
Studies repeatedly show that those adverts nearer the top of the page attract the highest clickthrough rates (CTRs) (Soames, 2013). Competition for these top spots can be fierce and the cost per click can be very high. Ads at the top of a page generally have the following qualities:
- They are very relevant to a user’s search query.
- The consistently perform well, with high CTRs over time.
- The CPC bid is competitive and outbids other ads of the same quality.
(Google AdWords, 2013)
Figure 15. An image illustrating clickthrough and conversion rates.
You may think that more clicks are better, but is this necessarily the case? Being in the top position means that you may pay more per click. When your advertising budget is limited, it is often more cost effective not to bid too much for your keywords and to occupy the lower ad positions. Because you’ll pay less per click, you can achieve more clicks (and potential customers) for your limited search advertising budget.
Advertisers need to consider what a user does after clicking through to the advertiser’s website from the search engine. When planning a search advertising campaign, it is therefore crucial to set the goals of the campaign upfront, and make sure that these are attainable. With a goal set up, the advertiser can track how many of the users that clickthrough to the website follow through to that goal. This is called a conversion.
Goals can be:
- Buying a product
- Filling in a form or quote
- Downloading a white paper
- Sending an enquiry
- Booking a flight
We know that the CTR of an advert is the number of clicks out of the total impressions.
The conversion rate of an advert is conversions divided by clicks.
The cost per action (or the cost per each conversion) is the total cost of the campaign, divided by the number of conversions.
The average cost per click is the total cost of the campaign divided by the number of clicks.
As the advertiser, you also need to know the value of each conversion. If the value of a conversion is less than the cost of achieving it, you effectively lose money with every conversion. Knowing the value to your business of a conversion will enable you to run search advertising campaigns profitably.
Figure 16. Adjusting bidding strategies based on business principles.
The Bidding Process
Advertisers need to determine the maximum they are willing to pay for a click on their advert, and they need to decide this for each keyword they enter for an advert. This bid is the maximum cost per click (max CPC).
However, this will not necessarily be the CPC that the advertiser must pay for a click. Every time a search query is entered, the search engine runs an auction to determine the placement of the adverts where advertisers have bid on that search term. This auction is known as a Generalised Second Price (GSP) auction, which is a variation on the Vickrey auction.
In the GSP auction, each advertiser will pay the bid of the advertiser below him, plus a standard increment (typically $0.01), for a click on their advert.
Say three advertisers, A1, A2 and A3, bid $2.50, $3.00 and $2.35 respectively on the same keyword. The search engine has set a minimum price of $2.05 on that same keyword. Here is how the adverts would be positioned, and what they would each pay for a click:
AdWords Quality Score
When it comes to ranking, of course, it’s not quite as simple as that (it rarely is!). As well as the bid an advertiser places on a keyword, the search engine will take a number of other factors into account. In the case of Google AdWords, this is known as Quality Score. Quality Score is applied on a keyword, ad group and account level. It is important that your entire account has a good Quality Score, as it affects ranking and the cost per click.
The Quality Score is determined by, among other factors:
- The relevance of the keyword to the search term.
- The relevance of the advert copy to the search term.
- The relevance of the landing page to the search term.
- The historic CTR of that advert.
Quality Score is ranked as follows:
- Great (8, 9, 10): Keyword is very relevant and QS needs no improvement.
- OK (5, 6, 7): Keyword is relevant, but can still benefit from a higher QS.
- Poor (1, 2, 3, 4): This keyword isn’t very relevant and QS needs
Another way to think of the Quality Score is as a discount that is applied to your campaign. For instance, an advert with a great Quality Score can achieve a top position at a lower bid than a competing ad with a poor Quality Score; for example, an advertiser with a Quality Score of 5 will have to pay twice as much for a certain position as an advertiser with a Quality Score of 10.
In order to report on campaigns all the way through to conversion, you need to use appropriate conversion tracking. Conversion tracking is usually accomplished with a small tracking pixel that is placed on the conversion confirmation page of the website.
Google AdWords offers conversion tracking tags, which will allow you to report on AdWords campaigns from impression through to conversion. The AdWords interface provides a wide range of useful reports.
In order to track many other networks, however, third-party tracking needs to be used. Most ad serving technology will also enable pay-per-click tracking (usually at a nominal additional cost per click). If you are running display campaigns through these networks as well, this has the benefit of reporting on how the campaigns might influence each other.
If you are sending traffic to a website that uses Google Analytics, you can use campaign tracking to track and report on campaigns that are driving traffic to the site. You can link your AdWords and Analytics accounts to share information across these platforms (such as the cost paid per click in Google Analytics and some basic analytics information in AdWords).
Planning and setting up a Search Advertising Campaign
- Do your homework: For a successful campaign, you need a full online and offline analysis of the business, customer demographics, industry and competitors. While it is relatively quick to set up a campaign, pre-planning will show dividends later. You need a brand, an identity and a clear, unique selling point. You get only three lines to advertise, so you need to make sure you know what must be included and how to make the most impact.
- Define your goals; You need to know what you want to achieve with your search advertising campaign. Branding campaigns, for example, are very different from campaigns to increase sales. What do you want users to do once they click on your advert?
- Budget, cost per action (CPA) and targets: Determine how much you are willing to spend to achieve your goal – your target CPA. Decide how much budget you are going to allocate to your search advertising campaign. If your goal is to increase revenue, your budget may be unlimited as long as revenue is increasing and you are within your target CPA.
- Keyword research: You need to determine what keywords potential customers are likely to use when searching for the service that you offer. Along with that, you need to know:
What common misspellings a customer might use. What words would show that they are not likely to purchase from you (words such as ‘free’ and ‘cheap’).
As part of your keyword research, you need to look at expected volumes for your keywords, so you know how to bid. There are also tools that will show you similar or related keywords, so you can expand your keyword list even further.
- Write the adverts: Using your keyword research, write compelling adverts to promote your products. Adverts can be unique to one keyword, or you can group them and have a number of keywords for one advert. Make sure you use an appropriate display URL, and that you target the landing page for each advert.
- Place your bids: Based on your goals and keyword research, set the maximum bids for your keywords. Don’t set these too high at this stage – you’ll tweak the bids as you test your campaign. That being said, don’t make them too low either, or you won’t get much traffic, and it could affect your Quality Score. Test your ad to find the right balance in line with your goals. AdWords also provides tools that can help guide your decisions.
- Tracking: Get your tracking tags in place, especially any conversion tracking tags.
- Measure, analyse, test, optimise!: With tracking in place, you can analyse your ROI down to a keyword level, and then focus your campaign and budget on the keywords that are converting best. Consider seeing how changing the text, image or video of your advert can increase the CTR, or your conversion rate. Test different landing pages to see what converts better.
Test the networks too. Your Bing campaign may perform better than Google, or your Facebook account may drive cheaper traffic. Always keep your goals in mind and work, work, work to achieve them.
Advantages of Pay Per Click Advertising
There are many reasons why search advertising can be an excellent addition to any digital marketing strategy.
- No to low cost barrier: You pay only for traffic; there are usually no setup fees involved; and all the tools you need to start out with can be accessed free.
- Tracking every cent: Search advertising allows you to track your advertising spend down to a keyword level, so you can learn what works and what doesn’t on a micro scale.
- Targeted advert placement: You can make your advertising relevant – by using filters, targeting your ads to specific people, or even in the way you use keywords and match types.
- You’re giving your customers what they want: Search advertising lets you put your advert in front of people who are searching for your product. It lets you provide a solution, as opposed to creating an interruption.
Challenges Faced in Pay Per Click (PPC) Advertsing
Search advertising campaigns are quick to set up, can provide high volumes of traffic, and are highly trackable. But there are some pitfalls that you ought to be aware of.
Click fraud occurs when your advert is clicked on by someone who is not a legitimate potential customer. Because an advertiser has to pay for every click, sometimes unscrupulous competitors can click on the advert to force the payment. There are even automated bots that can click on adverts, costing advertisers millions.
Search engines have taken measures to combat this and click fraud is no longer widely prevalent. Advertisers can report suspected click fraud, and the search engines will refund invalid or fraudulent clicks after investigation.
What can you do? Keep an eye on your campaign. Any sudden leap in CTR should be investigated, and you should pay particular attention to see if the conversion rate drops (which would indicate potential fraud). Pause the campaign if you suspect fraud, and alert the search engine.
Bidding wars and climbing CPCs
High-traffic keywords are expensive, and the battle to stay on top means that the CPC of these keywords is escalating. Convincing yourself that it’s number one or nothing can result in burning through your campaign budget quickly, with nothing to show for it.
Keep focused on your campaign goals and ROI, and keep investigating to find (cheaper) niche keywords that work for you.
Search advertising campaigns require a lot of monitoring, and the bigger your campaign gets, the more time this takes. Search advertising can provide a fantastic ROI, but you need to check in and tweak regularly to make sure that it continues to perform for you.