What is Search Engine Marketing and How it Works?

Search Engine Marketing is the method of promoting and advertising in which the organisation’s content is made to be found at a higher rank when searched for in a search engine. The concept is similar to search engine optimisation (SEO) except for the fact that search engine marketing is a paid advertisement. Search engine marketing helps businesses to target consumers towards their products and services. What the companies do is buy top-ranked search engine result pages to display their personalised ads through the help of an auction process. Some of the commonly used search engines are Google, Bing, and Yahoo.

Search Engine Marketing includes:

• Title of the content
• Summarised description of the overall content
• Attractive text that inspires the users to open the website
• URL hyperlinks

How does Search Engine Marketing Work?

Search engine marketing works by the following process:

Step 1: There are certain phrases or keywords that consumers use while searching for a product on a website.

Step 2: The companies need to list the probable topics in a spreadsheet that they want to rank. The topics listed should correspond with the products and services that they assume will mostly be demanded by the consumer.

Step 3: Next they need to broaden the topics and identify the specific keywords or phrases that they think their customers might use or are already using while looking for the product or information. This process of determining the most used keyword is known as keyword analysis. Keyword analysis can be done with the help of certain tools and software such as Google Analytics, WordStream, and Hub Spot’s source report. It must be made sure that the keywords are the exact phrases used by the consumers.

Step 4: After bidding for the appropriate keywords, the marketers purchase ad space at the top of search engine result pages so that their advertisements are displayed at a higher rank when searched for the same.

Step 5: The payment to the search engine providers is done based on pay-per-click. In this system, every time a user or a consumer clicks on the website’s link, it gets tracked and they get their payment based on the number of clicks generated.

Importance of Search Engine Marketing

1. Helps the Consumers in Convenient Online Purchasing: Consumers looking for particular products can search for the same by simply using keywords that match suitably with the specifications of the product. In this way, the products will reach to right customers.

2. Convert Leads to Potential Customers: In search engine marketing, only interested consumers search for particular products that they seek to buy. Therefore organisations directly place their products in front of potential customers. This generates high rates of conversion in the business.

3. Targets Huge Traffic: Search engine marketing enables quick targeting of large audiences as the products and information are readily available as and when searched for.

4. Pay-Per-Click: In a pay-per-click, organisations pay advertisement companies only based on the total number of clicks generated from the website link. In this way, organisations pay only for the potential customers who seem to be interested in the products and services. Thus, search engine marketing cuts down high advertisement costs.

5. Enhances Trust: Because search engine marketing attracts large traffic, it ensures a maximum number of visitors to the website due to which it increases trust signals by Google.

6. Appropriate Market Segmentation: Since the products are directly displayed in the search engines as soon as the keywords are searched, search engine marketing enables proper market segmentation by correctly targeting the right customers and geographical area.

7. Keeps Track of Performance: Through search engine marketing analysis tools and software, organisations can track the performance of their campaigns whether they are doing well or they need to change their marketing strategies. They can have a proper analysis of the quantity of sales and demand for the product through search engine marketing campaigns.

What is Ad Auction?

Ad auction is defined as a process of pricing online advertisements based on pay-per-click for organisations who wish to display their ads on search engines. If there are available slots for advertisement, the search engine providers hold an auction in which the advertisers bid on certain keywords against each other. The bidder with the highest bid wins the auction. The search engines decide:

• Which ad will appear in the top search ranks in the search engine result pages?
• Order of all the other ads.
• If an ad will not be displayed at all.

Such auctions are of 2 types:

1. First-Price Auction: In a First-Price Auction, the advertiser with the highest bid wins and pays the maximum amount set in the auction.

2. Second-Price Auction: In a Second-Price Auction the advertiser with the highest bid wins but he needs to pay more than the second-highest bidder rather than paying the highest bid amount.

How Ad Auctions Work?

In a search engine marketing model, the businesses that can identify the precise keywords are the real winners in the market over the ones who spend the highest budget. Anyway, if a product or a website does well, it automatically gets a higher rank in the search engine result pages organically without the need for search engine marketing. Thus, we can say that a campaign advertised through search engine marketing with a higher budget may not get the top ad space. Organisations with lower budgets may occupy the space if they tend to attract heavy traffic, ensure trust signals, display relevant content, and identify the most searched keywords. Every time a consumer searches for a relevant keyword, search engines such as Google, Bing, and Yahoo go through an auction to select which ad will appear in the top rank on the search engine result page. The auction includes various factors such as an ad quality rating as well as a pay-per-click network. A search engine can enter an auction by the following steps:

Step 1: Placing a Bid: The campaign needs to enter the highest amount of budget it is willing to contribute for the keyword.

Step 2: Search Engine’s Quality Ranking: Search engines check and rate the quality of the ad and the website based on the keywords identified, the website’s user interface, the relevance of the content and the useful information they provide. They need to match certain criteria and requirements set by the search engines.

Step 3: Contextual Variables: Contextual variables include the user’s graphical location, search history, time when the search was conducted, device, other ads searched by the person, and the websites clicked.

Step 4: Rank is Assigned: Finally, after going through the above 3 steps, a rank is assigned to the products or website to be displayed on the search engine result page after considering all the factors.

Creating a Search Engine Marketing Campaign Strategy

1. Identification of Keywords: Organisations need to identify relevant topics and broaden the same to precisely determine the appropriate keywords that the consumers will mostly be using while conducting the search function. This task can be fulfilled by certain analysis tools and software.

2. Budget Allocation: Organisations need to decide how much money they are willing to spend on a keyword.

3. Grouping of Ads: If a company is selling multiple lines of products, they need to organise and group them into a collection of ads to cut costs. In this way, they can use a particular keyword for the entire collection rather than assigning a single keyword per product.

4. Linking Landing Pages: The next step is to link the ads to a landing page with a strong user experience and effective keywords.

5. Ad Creation: After successfully grouping the ads, an advertisement needs to be generated for the entire collection. The contents must be attractive and relevant.

6. Ad Extensions: Ad extensions are used to display further information such as links, notifications, and structured samples to increase the visibility of the ad.

7. Ad Scheduling: Marketers need to schedule the appropriate time for displaying their ads to the users as such that they are more active at that particular time.

8. Bidding: In this step, the marketers bid on the keywords displayed in the search engines.

9. Analysing the Performance: The last step is analysing the performance of the campaign in the search engines through the help of tools and software and making necessary changes.

Disadvantages of Search Engine Marketing

1. Involves Cost: Though search engine marketing is a cost-effective strategy, i.e., it cuts down maximum advertisement cost through pay-per-click, we cannot disagree with the fact that, unlike search engine marketing, search engine optimisation is a similar marketing strategy which is unpaid and generates results organically.

2. High level of Competition: In the race to advertise and display products at a higher rank in search engine result pages, most organisations are trying to capture the top ad space. In this process, the number of competitors is increasing as well and the cost of pay-per-click by the advertisement companies is also rising eventually.

3. Requires Time: The entire process starting from identification of keywords to bidding for the same to ultimately advertising the search engine result pages requires a huge amount of time.

4. Needs Proper Examination: Identification and bidding of keywords is a crucial job as the entire strategy depends on targeting traffic and conversion. Therefore proper examination and expertise are required for this purpose.

5. Chances of Fraud: Competitors might click on the ads to increase the pay-per-lick cost without generating conversions.

Difference Between SEM and SEO

Basis	SEM	SEO
Function	Improves sponsored rankings in search results.	Optimises unpaid rankings in search results.
Cost	It is a paid advertisement model. Payment is done on the basis of PPC.	It displays organic search results i.e., they are unpaid means of advertisement.
Ad space rank	The contents advertised through SEM are shown at the top of the search engine result page.	The contents advertised through SEO are shown in the middle or below the SEM advertisements on the search engine result page.
Effectiveness	In a SEM, traffic stops as soon as pay-per-click is withdrawn.	SEO takes time to rank higher in search results.
Time	SEM provides short-term outcomes.	SEO provides greater outcomes in the long run.
Marketing strategies	SEM is entirely dependent on advertisement costs spent by the company.	The marketing strategies in SEO need to be analysed and tailored from time to time.