This wiki is managed by Dave Chaffey of Smart Insights to help keep marketers up-to-date with developments in digital marketing
Paid Search Marketing
From Marketing Online
Paid search marketing or Pay per click (PPC) is similar to conventional advertising; here a relevant text ad with a link to a company page is displayed when the user of a search engine types in a specific phrase. A series of text ads usually labelled as ‘sponsored links’ are displayed above, or to the right of the natural listings.
Paid Search Marketing Guide
Check our definition and Advantages of Paid Search Marketing and Disadvantages of Paid Search Marketing if you're new to Paid Search Marketing.
If you're more experienced with Paid Search Marketing the most relevant sections are on measuring and improving effectiveness of Paid Search Marketing.
What is Paid Search Marketing
Paid Search Marketing definition
Paid search marketing or Pay per click (PPC) is similar to conventional advertising; here a relevant text ad with a link to a company page is displayed when the user of a search engine types in a specific phrase.
The series of familiar text ads usually labelled as ‘sponsored links’ are displayed as is shown above, or to the right of the natural listings as shown.
Although many searchers prefer to click on the natural listings, a sufficient number do click on the paid listings (typically around a quarter or a third of all clicks) such that they are highly profitable for companies such as Google and a well designed paid search campaign can drive a significant amount of business for the search companies.
Each of the main search engines has it’s own advertising programmes
Google's content network of third party sites
Many marketers new to paid search don't realise that Google also offers CPM (Placement targeting) options on its content network where contextual ads are displayed on third-party publisher sites relevant to the content on a page.
The content network is significant since it enables advertisers to reach their audiences on other sites like this one which offer the Google AdSense programme. It is switched on by default and needs careful management since lead quality can be lower.
Google achieves around a third of it's revenue from this and it was as high as 50% at one time.
Why is it important?
Examples of Paid Search Marketing
Advantages and disadvantages of Paid Search Marketing
Advantages of Paid Search Marketing
I present these advantages and disadvantages of paid search marketing since they should be part of a review of PPC strategy to assess when best to deploy PPC marketing in comparison with other digital media.
The advantages of paid search marketing listed are intended to prompt you to ask to what extent your company is taking advantage of these benefits or to help justify investment in pay per click compared to other media.
Advantages of paid search marketing
In my experience, the main advantages of paid search marketing in comparison with other digital media channels are:
- 1. Highly targeted. Can reach target audience when they are looking for products, i.e. high purchase intent.
- 2. Low wastage. With the right match types, i.e. in Google Adwords, use of phrase match, exact match or broad match in combination with negative keywords, you can ensure that your ads are only shown when searchers are searching for relevant products.
- 3. Predictability. Traffic volumes, ranking, returns and costs tend to more stable and more predictable than SEO.
- 4. Speed. PPC listings appear much faster, usually in a few hours (or days if editor review is required). SEO has a much longer lead time, particularly important when new sites are created (the Google sandbox effect) or when ads need to be switched on and off for a campaign, promotion or stock changes.
- 5. Control. Unlike SEO (with sufficient budget and staff or agency with good PPC skills) it is more straightforward to achieve high ranking and direct visitors to the relevant page on your site. With the right technology, and that means a [bid management system"], creative / copy and budgeting can be tightly controlled.
- 6. High conversion rates. Following on from 1, PPC tends to have the higher conversion rates than SEO and much higher than display ads where viewers of the ads may click more on impulse.
- 7. Branding effect. Tests by the IAB have shown that there is a branding effect with Pay Per Click, even if users do not click on the ad. This can be useful for generating brand awareness during the launch of products or major campaigns.
Disadvantages of Paid Search Marketing
Disadvantages of paid search marketing
Reviewing the disadvantages of pay per click marketing listed will help show some of the challenges of pay per click which need to be managed for success.
In my experience, the main disadvantages of paid search which need to be managed are:
- 1. Competition. Since Pay Per Click has become popular due to its effectiveness, it is competitive and because it is based on competitive bids it can get expensive. CPC/bid inflation has led to some companies reducing PPC activity. Some companies may get involved in bidding wars that drive bids up to an unacceptable-level – some phrases such as ‘life insurance’ may exceed £10 per click.
- 2. Higher costs than other media. If SEO is effective it will almost always deliver a lower CPC.
- 3. Favours larger brands. For companies with a lower budget or a narrower range of products on which to increase lifetime value it may be not possible to compete. In the past large players have got deals on their media spend through their agencies through, for example, Google Best Practice Funding.
- 4. Complexity of managing large campaigns. PPC is deceptively simple to setup. But to compete effectively, particularly for a large campaign, requires knowledge of best practice which changes as Google and other engines introduce new facilities - see the official [PPC update blogs] from the search networks to gain an idea.
- 5. Limited reach. Not all searchers will see your ads, since the majority scan and click on the natural listings. Your ad will only reach those who are proactively looking for a product or service, but not those who are unaware of a need. Here display advertising can be used, but the paid search content networks can help here.
- 6. Click fraud. Common in some sectors. View summary of details on [PPC click fraud]
