Search Engine Marketing Pay Per Click Distinctions SEM

Search Engine Marketing Pay Per Click

Distinctions: SEM vs. SEO • Search Engine Marketing (SEM), aka – “paid search” – “pay per click” (PPC) • Search Engine Optimization (SEO), aka – “natural search” – “algorithmic search” • Key difference: SEM costs $$ and offers more control

Search is Big Business • PPC SEM is a $10 BILLION ad market • The top three search sites are also the top 3 online properties world wide in terms of unique visitors.

The Players Ad. Words The Google Network is the largest online advertising network, reaching over 80% of US Internet users.

Market Share by Engine Net. Ratings April 2005 vs. April 2006 Share of searches for search sites with a share of 5 percent or higher: Source: Search. Engine. Watch http: //blog. searchenginewatch. com/blog/060526 -090731

Company X Campaign Impressions and Revenue by Engine As % of Total Conversion Rate Share of Total Searches Online Impressions As % of Total Revenue 35, 000 69% $250, 000 76% 1. 0% 50% 15, 000 29% $50, 000 15% 1. 0% 22% 1, 000 2% $25, 000 9% 1. 25% 11% 50, 500, 000 100. 00% $325, 000 100. 00% 1. 10% 83% Source: Maestro data for Q 2 2006

How PPC SEM Works An auction-based system where advertisers bid/compete for the ability to place their text ad next to search results when a consumer searches on a specific keyword term or phrase. The advertiser’s bid determines the position of it’s ad relative to competitors. The advertiser pays only when a consumer actually clicks on the ad (pay-per-click).

Example – Google Ad. Words paid search natural search 1 st position – CPC >$2. 25 2 nd position – CPC $1. 00 3 rd position – CPC <$0. 75 4 th position 5 th position 1 st position ETC. . 2 nd position 3 rd position

The Funnel Searches for a keyword Clicks to landing page Clicks to purchase path Buys 1, 000 ----- 9, 000 ----- 4, 500 ----- 144 Data based on overall rates for the entire SEM campaign

SEM Benefits • Provides an ideal aperture to reach consumers while they are actively searching for the products we sell • PPC minimizes waste • Easy to control – Turn up or down at any time – Segmentation--Push specific products or offers to select groups

SEM Campaign Elements • • Keywords Positioning/Bids Text Link Creative Landing Pages

Keywords • Get in the customers head. What keywords will they use to look for products like those that you sell? – Endless variations, misspellings, etc. • Be specific – it’s better to have more specific terms – E. g. “shoes” vs. “adidas samba shoes” – Tailor creative to keyword for best conversion • Considerations – 80/20 rule/Pareto’s Principle: 20% of your keywords will drive 80% of your orders and revenue – But you need “the long tail” for incremental/low-cost volume and to really scale the campaign

Keywords: The Long Tail “The Long Tail’, Chris Anderson, Wired Magazine 2004 In this article, Chris references “an entirely new economic model for the media and entertainment industries”… “Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream…The average Barnes & Noble carries 130, 000 titles. Yet more than half of Amazon's book sales come from outside its top 130, 000 titles. ” How does this apply to search? • Consumer search is no longer limited to yellow pages categories. • In the past it was logistically impossible to profit from the long tail but the internet changes that • While the most popular terms will be searched for most often there are only a limited number of those terms. However, there are potentially an unlimited number of unpopular terms, the sum of which is likely to add up to more than the popular terms. • Popular terms are still important but unpopular terms are important too

Positioning/Bidding (CPC) • Position impacts click-through rate which in turn impacts cost – Higher positions cost more (because they generate the most clicks) and tend to convert at a lower rate (not all clicks are well qualified). Good strategy for highest volume but not necessarily ROI friendly. – Lower positions cost less (because they generate few clicks) and tend to convert at a higher rate. ROI tends to be high with this strategy but volume is low. • • • Find the delicate balance to maximize volume at acceptable ROI levels In general, the higher the CPC, the higher the position CPCs vary greatly on a keyword-by-keyword basis – depend on the number of advertisers in the market – Product cost – LTV of customers/amount a company can pay to acquire a new customer • • Actual CPC vs. Max CPC Engines monitor for relevancy to ensure high quality experience for advertiser and consumers, minimum bid requirements will vary accordingly. Engines reward advertisers for relevancy – – Ad Text CTR – indicator of relevance Landing page (content & layout) Google “quality score”

Which Position is the Best? The #1 position gets the most eyeballs but it is not always the best option from an ROI standpoint. Needs to be examined on a keyword by keyword basis for best results.

Text Link Ads • Example • • Domain Name Registration Register Your Domain Name Now! #1 In Online Services Industry Register. com Should integrate with search term and landing page Drives click-through rate to the landing page Maximize click-through rate (but not at the expense of conversion) Small things can make a big difference – e. Trade. com – www. e. Trade. com • Ability to test and rotate multiple creatives simultaneously

Landing Pages • Provides a “bridge” between the search engine/text ad and the main Web site • Continues the same conversation and tone • Takes specific segment needs into consideration • Quickly provide relevant information to show consumers that you have what they are looking for – On average, 50% of visitors abandon the page in 0 -8 seconds – Those who stay only spend 10 -20 seconds total on the page – Importance of clear, simple messages • Funnel consumers to a specific action/minimize opportunities to navigate away from the page. – Omit header navigation • Small things can make a big difference • TEST, TEST – Increased conversion can have SIGNIFICANT impact on campaign performance • Big focus of growth for our campaign

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