Basic Concepts of Search Engine Marketing

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Basic Concepts of Search Engine Marketing

PPC adverts are ranked by AdRank score

Search Engine Marketing (SEM), also known as Pay Per Click (PPC) marketing is a very powerful addition to Search Engine Optimisation (SEO) and offline marketing. It can be used to complement your SEO strategy or to provide a way of addressing parts of your market that you do not want to optimise your website for. It is also a very useful tactical medium since you can quickly create and deploy an advert to support a sales campaign or just to try and boost traffic when things are a bit quiet.

SEM has two advantages over traditional forms of advertising: You only pay when your advert attracts business, and by its nature it targets people who are actively in the market.

Pay Per Click (PPC) Marketing

With PPC marketing on Google and Bing you only pay for your advertising if someone clicks on your advert. That’s why it is often called “Pay Per Click”. A user types in a search phrase, looking for a used car for example, and the search engine returns a list of adverts as well as the organic results. If the user likes your advert they will click on it and you will be charged for the click. The trick is to bid for the right keywords and then produce an advert that is relevant to them.

PPC can be a very efficient marketing medium, but you should be aware that it can also be very inefficient. This is because a sale doesn’t necessarily follow a click. If you choose to focus on inappropriate keywords, or your website is not very good at converting customers to sales then you can waste a lot of money. On the other hand, if you are careful, choose the right keywords, and make sure your website is properly optimised to convert people then it is a great way to market your business. As in all things digital, measurement and experimentation are essential for success.

Choosing Keywords

The basic principles of marketing also apply to SEM. The best place to start thinking about how to create an SEM campaign on Google or Bing is to consider the message you want people to see. Usually, this means linking the thing that makes your products unique to whatever problem your customers will use it to solve so that they can be informed that you have the best solution.

SEM takes a different tack at this point. Whereas radio and press advertising make no presumptions that the listener or reader are actually about to purchase your product, SEM has the advantage of being directed at people who are almost certainly in the buying cycle.

The reason this is the case is to do with how the consumer arrives at your advert. Whereas a radio or press advert is passively consumed whilst consuming other media, in SEM the consumer has typed a set of keywords into the search engine which indicates to it their current interest. If that interest includes your product, then that will be reflected in the keywords. So, the first thing you have to consider when creating a SEM campaign is the keywords a consumer is likely to type in if they are interested in what you have to offer.

Let’s say we sell used cars. The process a consumer goes through to buy a used car often starts with a very general search of the different options available, perhaps with a certain pre-conceived notion of what kind of car they want (e.g. sports car or family car). They are probably also biased towards certain manufacturers. Nonetheless, they are likely to start with a very general search term like:

used cars

This term indicates that the consumer doesn’t really know what they want yet. The kind of websites that this search will return will be sites that have a relatively high domain ranking and contain long lists of used cars that the consumer will browse through looking for inspiration. They probably aren’t going to buy anything at this point, but it may be useful to appear at this stage if you want to plant your company’s name into their mind at this early stage.

As the consumer progresses through their sales process, they will become more specific about what they want to buy. Let’s say they’ve decided they want a people carrier. They may then start searching with terms like this:

used people carriers

Which is more specific and indicates that the consumer has narrowed the search. If you happen to sell used people carriers then this may be a good place to advertise, but the search terms can become even more specific with phrases such as

Used Ford S-Max Zetec Glasgow

This particular phrase indicates that the consumer has decided what they want and are now actively looking for it in Glasgow. If you were a Glasgow Ford dealer with an S-Max in stock, then this particular set of keywords represents an opportunity to sell a used car – particularly if you can demonstrate that there is something about your business that sets you apart from the competition, for instance you may be a family owned franchised dealer which some people may find attractive.

So a car dealer considering which keywords to purchase to address people interested in buying a used Ford S-Max could consider any of the above keywords, but there are reasons that the dealer should think carefully before they make their selection.

Keyword Competition

In business, most activity can be found around the biggest opportunities to make money. Keywords are no different. A search term which applies to anyone looking to buy a used car is the kind of thing that is useful to any used car dealer, and so lots of used car dealers will take an interest in it. So you can be fairly sure that the phrase “used cars” will be intensely competed for by other car dealers. At the other end of the spectrum, longer, more specific search phrases are less likely to be useful to most car dealers and so a phrase like “Used Ford S-Max Zetec Glasgow” would probably be competed for less, if at all.

The more competition there is for a keyword, the more expensive it will be to advertise against it. This is because adwords and the other search engine advertising systems all use a bidding model to sell advertising space.

Bidding at the Keyword Auction

When you input a search into Google you are presented with a list of search results. At the top, and down the right hand side, of that list are a set of slots which display paid ads. There are a limited number of these slots, and they have an order of priority: the slots that are most likely to get the user’s attention have the highest priority, and those less likely less so.

When you bid for a keyword, you tell the search engine the maximum amount you are willing to pay for a click. This is not necessarily how much you pay, because Google will only charge you what the next bidder is willing to pay, plus $0.01. So the maximum bid is an upper limit, but how much you pay is defined by the person who offers the lowest bid after yours. You also set a total budget, and once that’s been used up then Google no longer shows your adverts.

Now, you’d think that the highest bidder is the person who occupies the highest slot, but it doesn’t work like that with Google Ads. Google looks at another dimension, which is the relevancy of your ad, represented by a quality score. The quality score represents the relevancy of the ad’s content to the keywords.

The bid and the quality score are multiplied together to give the AdRank score, which is what determines how well the advert is ranked.

If you take the two examples above, the ad with the highest bid will perform significantly worse than the most relevant ad.

The logic behind this is very simple. As I have noted elsewhere, a search engine’s business model relies on connecting what a user wants to find out, as expressed in a search term, to useful information. If it returns useless information, the user will try a different search engine. So it is very clearly in the search engine’s interest to return relevant adverts alongside relevant organic results, hence the interest in weighting its ranking by a combination of relevance and price.


Creating a search engine marketing campaign means considering what keyword phrases your customers will use if they are in the market for your products. Once this has been done, you then create an advert that is relevant to those keyword phrases and bid to advertise against each keyword. It is important to realise that the relevance of the ad is an important part of how a search engine decides which adverts to show its users and can decide how highly your advert will rank in the search results.

In the next post I’ll illustrate how this is done with an example.