In Internet marketing, search advertising is a method of placing online advertisements on web pages that show results from search engine queries. Through the same search-engine advertising services, ads can also be placed on Web pages with other published content.[1]
Search advertisements are targeted to match key search terms (called keywords) entered on search engines. This targeting ability has contributed to the attractiveness of search advertising for advertisers. Consumers will often use a search engine to identify and compare purchasing options immediately before making a purchasing decision. The opportunity to present consumers with advertisements tailored to their immediate buying interests encourages consumers to click on search ads instead of unpaid search results, which are often less relevant. For the online user, Sponsored Search Advertisement offers highly relevant search results which are based on the consumer’s own queries and, thus, they are considered less intrusive than banner advertisements or pop-ups advertising. In addition, Sponsored Search Advertisement reduces online user search costs and increases the accessibility to useful information within a limited time frame. Consequently, Sponsored Search Advertisement has become an important element of online users browsing and information searching experiences on the Web. Search advertising is an alternative to SEO and SEM.
Origins
Web advertising before 1998 consisted of banner advertisements generally priced by the number of impressions delivered (i.e., Cost-Per-milli (CPM) pricing). In 1997, Yahoo first delivered banner advertisements based on search queries at its website. GoTo.com (renamed Overture in 2001, and acquired by Yahoo! in 2003) created the first sponsored search auction, and Google’s first sponsored search auction followed in 2002.[2]
Keywords
Search advertising is sold and delivered on the basis of keywords. The user of a search engine enters keywords to make queries. A keyword may consist of more than one word.[3] The user interested in the product or service searches using a specific keyword or search term which lets them interact with advertiser's website.
Search engines conduct running auctions to sell ads according to bids received for keywords and relative relevance of user keywords to ads in the inventory. The keyword “home mortgage refinancing" is more expensive than one that is in less demand, such as “used bicycle tires.” Profit potential of the keywords also plays into bids for ads that advertisers want displayed when the keywords are searched by the user. For example, "used book" may be a popular keyword but may have low profit potential and the advertiser bids will reflect that.
Search engines build indexes of Web pages using a Web crawler. When the publisher of a Web page arranges with a search engine firm to have ads served up on that page, the search engine applies their indexing technology to associate the content of that page with keywords. Those keywords are then fed into the same auctioning system that is used by advertisers to buy ads on both search engine results pages. Advertising based on keywords in the surrounding content or context is referred to as Contextual advertising. This is usually less profitable than search advertising which is based on user intent expressed through their keywords.[citation needed]
Advertisers can choose whether to buy ads on search result pages (search advertising), published content pages (contextual advertising), or both. Bids on the same keywords are usually higher in search advertising than in contextual advertising.[citation needed]
In 2013, the Tenth Circuit Court of Appeals held in Lens.com, Inc. v. 1-800 Contacts, Inc. that online contact lens seller Lens.com did not commit trademark infringement when it purchased search advertisements using competitor 1-800 Contacts' federally registered 1800 CONTACTS trademark as a keyword. In August 2016, the Federal Trade Commission filed an administrative complaint against 1-800 Contacts alleging, among other things, that its search advertising trademark enforcement practices have unreasonably restrained competition in violation of the FTC Act. 1-800 Contacts has denied all wrongdoing and is scheduled to appear before an FTC administrative law judge in April 2017.[4]
Metrics
Search advertising activities can be measured in five ways:
CPM: Cost per thousand viewers was the original method used for pricing online advertisements. CPM remains the most common method for pricing banner ads.
CTR: Click-through rates measure the number of times an ad is clicked as a percentage of views of the Web page on which the ad appears. Banner ads have CTRs that are generally 0.5 percent or less. In comparison, individual search engine ads can have CTRs of 10 percent, even though they appear alongside organic search results and competing paid search advertisements.[5]
CPA: Cost per action quantifies costs for completing specified activities such as attracting a new customer or making a sale. Affiliate networks operate on a CPA basis. CPA systems function most effectively when sales cycles are short and easily tracked. Longer sales cycles rely on exposure to multiple types of ads to create brand awareness and purchasing interest before a sale is made. Longer sales cycles and sales requiring multiple customer contacts can be difficult to track, leading to a reluctance by publishers to participate in CPA programs beyond initial lead generation.
CPC: Cost per click tracks the cost of interacting with a client or potential client. In traditional marketing, CPC is viewed as a one-way process of reaching target audiences through means such as direct mail, radio ads and television ads. Search advertising provides opportunities for two-way contacts through web-based chat, Internet-based calls, call-back requests or mailing list sign-ups. There are some guidelines to establish minimum acceptable counting procedure for clicks. Each and every click has a life cycle which is known as click referral cycle. It comprises four stages: Initiated click, Measured click, Received click and Resolved click.[6]
TM: Total minutes is a metric being used by Nielsen/NetRatings to measure total time spent on a Web page rather than the number of Web page views. On July 10, 2007, Nielsen announced that they would be relying on TM as their primary metric for measuring Web page popularity, due to changes in the way Web pages provide content through audio and video streaming and by refreshing the same page without totally reloading it.[7]
Methodological questions regarding the use of total minutes for search advertising include how to account for Internet users that keep several browser windows open simultaneously, or who simply leave one window open unattended for long periods of time. Another question involves tracking total minutes on HTML pages that are stateless and do therefore do not generate server-side data on the length of time that they are viewed.[8]
Campaign management
Search engine advertisements are purchased on the basis of keywords. Ad buyers engage in running actions for keywords, with popular keywords costing several dollars per click through.
Search engines use algorithms to determine the position of ads according to their quality score, which is determined by several factors, including click through rates. In general ads with poor quality score and click through rates can be pushed down to the bottom of the first page of search results or onto subsequent pages. Even though advertisers are only paying for click throughs, the algorithms assigning ad positions based on ad popularity provide incentives for optimizing keyword selection and other cost control measures.[9] Without cost control measures, it is possible for ad buyers to spend twenty five to fifty percent of their ad budget ineffectively.[5]
Cost control measures can include:
Campaigns can begin slowly, so as to test the effectiveness of keywords and ad texts. It can take three months of testing before a campaign is ready to scale up. Beginning campaigns can spend US$20–$40 per day, whereas major campaigns can exceed US$1000 per day. Multiple campaigns can be run alongside each other.
Negative keywords can be used to exclude search queries that do not relate to services and/or products advertised. A seller of replacement windows for buildings, for example, could use the negative keywords ‘software’ or ‘programs’ to avoid their ads appearing in response to search queries for information about Microsoft Windows software.[citation needed]
Word order within keyword combinations can have an effect on click through rates. Word order in buying ads according to keywords can be controlled through the use of quotation marks. Continuing the above example from the perspective of a seller of replacement windows, the keyword “replacement window” may have a higher click through rate than “windows replacement” or for related keyword combinations where syntax is not specified and that could be associated with Microsoft Windows software rather than windows for buildings.[citation needed]
Broad search means that an ad is served up in response to any search query that contains the keyword, regardless of any other words that may have been used in the search query. Eliminating broad search can be helpful in cases where there are a large number of potential keywords or where the advertiser seeks to keep ad spending at a minimum. A replacement window company located in Trenton, New Jersey could eliminate broad search in favor of location-specific keywords such as “replacement windows Trenton” and other locations within their market area. Each search engine has its own procedures for controlling broad search options for individual keywords.[citation needed]
It takes time to identify and select potential keywords. Rather than bidding on a small number of popular keywords, advertisers can expand their keyword lists to more than 200 and seek to include keywords that their competitors are not utilizing. Keywords that are less sought after are cheaper. To identify keyword options, enter ‘keyword tool’ into a search engine. The use of competitors' trademarks as keywords has been controversial in the U.S. and around the world.[10]
The use of one own's trademark as a keyword has been controversial as well, but research shows that there are plenty of advantages in using that method not just for dominating search results pages with SEO and PPC and preventing competitors from taking advantage of it, but also for increasing the number of clicks the brand is getting; the combined clicks from SEO and PPC would exceed the clicks of SEO even if the brand's SEO has the first position for its brand keywords.[11]
Search advertising campaigns can produce immediate results—but they often need immediate attention. Poorly performing ads need to be pulled, keyword lists adjusted, and bid amounts modified to prevent over-spending. [citation needed]
Perform market research with search analytics services in order to identify market trends and opportunities. These services often reveal what keywords are profitable for other websites in your target market. In addition, they show seasonal and emerging keywords allowing you to plan a more timely marketing campaign.[12]
↑ Fain, D.C. and Pedersen, J.O. (2006) ‘Sponsored search: a brief history’, Bulletin of the American Society for Information Science and Technology, Vol. 32, pp.12, 13.
↑ Rosso, Mark; Jansen, Bernard (Jim) (August 2010), "Brand Names as Keywords in Sponsored Search Advertising", Communications of the Association for Information Systems, 27 (1): 81–98, doi:10.17705/1CAIS.02706
Affiliate marketing is a marketing arrangement in which affiliates receive a commission for each visit, signup or sale they generate for a merchant. This arrangement allows businesses to outsource part of the sales process. It is a form of performance-based marketing where the commission acts as an incentive for the affiliate; this commission is usually a percentage of the price of the product being sold, but can also be a flat rate per referral.
Google AdSense is a program run by Google through which website publishers in the Google Network of content sites serve text, images, video, or interactive media advertisements that are targeted to the site content and audience. These advertisements are administered, sorted, and maintained by Google. They can generate revenue on either a per-click or per-impression basis. Google beta-tested a cost-per-action service, but discontinued it in October 2008 in favor of a DoubleClick offering. In Q1 2014, Google earned US$3.4 billion, or 22% of total revenue, through Google AdSense. AdSense is a participant in the AdChoices program, so AdSense ads typically include the triangle-shaped AdChoices icon. This program also operates on HTTP cookies. In 2021, over 38.3 million websites use AdSense.
Google Ads is an online advertising platform developed by Google, where advertisers bid to display brief advertisements, service offerings, product listings, and videos to web users. It can place ads in the results of search engines like Google Search, mobile apps, videos, and on non-search websites. Services are offered under a pay-per-click (PPC) pricing model.
Click fraud is a type of fraud that occurs on the Internet in pay-per-click (PPC) online advertising. In this type of advertising, the owners of websites that post the ads are paid based on how many site visitors click on the ads. Fraud occurs when a person, automated script, computer program or an auto clicker imitates a legitimate user of a web browser, clicking on such an ad without having an actual interest in the target of the ad's link in order to increase revenue. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks being a key beneficiary of the fraud.
Yahoo! Native is a native "Pay per click" Internet advertising service provided by Yahoo.
Pay-per-click (PPC) is an internet advertising model used to drive traffic to websites, in which an advertiser pays a publisher when the ad is clicked.
Online advertising, also known as online marketing, Internet advertising, digital advertising or web advertising, is a form of marketing and advertising which uses the Internet to promote products and services to audiences and platform users. Online advertising includes email marketing, search engine marketing (SEM), social media marketing, many types of display advertising, and mobile advertising. Advertisements are increasingly being delivered via automated software systems operating across multiple websites, media services and platforms, known as programmatic advertising.
Click-through rate (CTR) is the ratio of clicks on a specific link to the number of times a page, email, or advertisement is shown. It is commonly used to measure the success of an online advertising campaign for a particular website, as well as the effectiveness of email campaigns.
Search engine marketing (SEM) is a form of Internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages (SERPs) primarily through paid advertising. SEM may incorporate search engine optimization (SEO), which adjusts or rewrites website content and site architecture to achieve a higher ranking in search engine results pages to enhance pay per click (PPC) listings and increase the Call to action (CTA) on the website.
Contextual advertising is a form of targeted advertising for advertisements appearing on websites or other media, such as content displayed in mobile browsers. In context targeting, advertising media are controlled on the basis of the content of a website using linguistic elements. The advertisements themselves are selected and served by automated systems based on the context of what a user is looking at.
In Web search engines, organic search results are the query results which are calculated strictly algorithmically, and not affected by advertiser payments. They are distinguished from various kinds of sponsored results, whether they are explicit pay per click advertisements, shopping results, or other results where the search engine is paid either for showing the result, or for clicks on the result.
Microsoft Advertising is an online advertising platform developed by Microsoft, where advertisers bid to display brief ads, service offers, product listings and videos to web users, it provides pay per click advertising on search engines Bing, Yahoo! and DuckDuckGo, as well as on other websites, mobile apps, and videos.
Search Engine Results Pages (SERP) are the pages displayed by search engines in response to a query by a user. The main component of the SERP is the listing of results that are returned by the search engine in response to a keyword query.
A domain name auction facilitates the buying and selling of currently registered domain names, enabling individuals to purchase a previously registered domain that suits their needs from an owner wishing to sell. A Drop registrar offers sales of expiring domains; but with a domain auction there is no need to wait until a current owner allows the registration to lapse before purchasing the domain you most want to own. Domain auction sites allow users to search multiple domain names that are listed for sale by owner, and to place bids on the names they want to purchase. As in any auction, the highest bidder wins. The more desirable a domain name, the higher the winning bid, and auction sites often provide links to escrow agents to facilitate the safe transfer of funds and domain properties between the auctioning parties.
Keyword advertising is a form of online advertising in which an advertiser pays to have an advertisement appear in the results listing when a person uses a particular phrase to search the Web, typically by employing a search engine. The particular phrase is composed of one or more key terms that are linked to one or more advertisements. The most common form or keyword advertising, focused on payment methods, is pay per click (PPC), with other forms being cost per action (CPA) or cost per mille (CPM).
Keyword research and optimization
Targeted advertising is a form of advertising, including online advertising, that is directed towards an audience with certain traits, based on the product or person the advertiser is promoting. These traits can either be demographic with a focus on race, economic status, sex, age, generation, level of education, income level, and employment, or psychographic focused on the consumer values, personality, attitude, opinion, lifestyle and interest. This focus can also entail behavioral variables, such as browser history, purchase history, and other recent online activities. The process of algorithm targeting eliminates waste.
Pay for placement, or P4P, is an Internet advertising model in which advertisements appear along with relevant search results from a Web search engine. Under this model, advertisers bid for the right to present an advertisement with specific search terms in an open auction. When one of these keywords is entered into the search engine, the results of the auction on that keyword are presented, with higher-ranking bids appearing more prominently on the page.
Social network advertising, also known as "social media targeting," is a group of terms that are used to describe forms of online advertising and digital marketing that focus on social networking services. One of the significant benefits of this type of advertising is that advertisers can take advantage of the users' demographic information, psychographics and other data points to target their ads appropriately.
Performance-based advertising, also known as pay for performance advertising, is a form of advertising in which the purchaser pays only when there are measurable results. Performance-based advertising is becoming more common with the spread of electronic media, notably the Internet, where it is possible to measure user actions resulting from advertisement. Performance marketing is different from Brand Marketing which focuses on awareness, consideration and opinions among target consumers.
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