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An Introduction To Search Engine Marketing

Paid search also known as PPC, Search Engine Marketing, or SEM is an extremely important channel which can propel your business to the next step.

In this post I am going to walk you through the ins and outs of paid search marketing.

Let’s start with the basics. What is PPC? PPC is a marketing channel which uses advertisements on search engines to drive traffic to your website or mobile app.

The most mainstream platforms for Search Engine Marketing are Google, Yahoo, and Bing. Within each of these platforms there are many possible variations of campaigns that you can run. In a nutshell it’s very simple to create a campaign. At a high level you create a campaign and organize it into something that is called an ad group. Once you have your ad group you then you decide which keywords that you want to trigger an advertisement. Once you decide which keywords trigger the advertisement, then you can set the maximum cost per click that you wish to pay for a given keyword.

For example, if you have a $1000 monthly budget to create a thousand visits to your website, then you would set the maximum cost per click to $1.

Unfortunately, it is not quite that simple. Just because you set the bid for a dollar does not mean that you are going to get traffic on that keyword for a dollar. The amount of traffic that you will get for the given keyword depends on the current level of competition associated with that keyword.

Let’s give an example of how PPC works from a bidding perspective. Say that you are in the fashion business and you sell dresses. If you go on to Google and do a keyword search for dress or dresses you will see over a billion results.

If you want your ad to rank above everyone else’s ad you must in some sense be willing to pay a higher cost per click than the competition to obtain the top position.

To be successful here, you have to know your market and you have to understand what the competitive set looks like. The good news is that you do not have to be a genius to figure this out. All major search platforms have a built in keyword research tool which will give you an idea of what the expected CPC is for a given keyword. You can play around with these tools to your heart’s content and come up with different models to figure out what’s going to work for your budget.

In some cases you might determine that taking a long tail approach for the keyword is something that is more feasible for you. For example, let’s say that the keyword dresses is very broad but perhaps if you’re a local business then you could advertise the keyword: dress shops in {City State} or try to be more specific with the keywords: formal dresses, custom formal dresses, etc. With each keyword variation that you come up with you can use the keyword tools within the platforms to give you an idea of how much traffic is available for a given keyword.

Once you have strategically chosen your keywords, the next step is to choose your keyword match type. Within the search platforms, you have the ability to run different types of keyword match types which determine how ads are triggered. The 3 most basic match types within the platforms are Exact Match, Phrase Match, and Broad Match. An Exact Match type will only trigger an ad which is the exact keyword selected in the previous step. A Phrase Match type will trigger an ad when a phrase is used which has your selected keywords in it. A Broad Match type will trigger an ad when the search engine determines that your selected keywords are related to suggested keywords. I have seen many businesses losing money by not realizing what the Broad Match type does. We prefer to do the upfront work to create an expansive keyword list rather relying on what the search engines think is relevant.

This practice not only allows us to be scientific from a keyword perspective, but it also allows us to be scientific from a budget and results perspective. Broad Match type also tends to create additional work because you have to go into the system and look at which keywords have been triggering ads and manually add those keywords as negative keywords. All in all, it’s a little more work to create precise keyword lists up front, but I recommend you take that approach because it will ensure that you are running ads only for keywords which are relevant and efficient for your business.

The next important factor of Search Engine Marketing is Quality Score. Quality Score refers to the correlation of relevancy between the keyword you are advertising for and the destination page. For example, let’s say I am the dressmaker or the dress shop and I want to advertise the keyword ballerinas. In order to achieve a high quality score for the keyword ballerinas you need make sure that your content matches the keyword you are advertising for. By creating high quality content that is relevant to the keyword, the search platform will reward you with a high quality score. The cost per click that you pay is directly attributable to your quality score. This is a way for you to get an angle on your cost per click and beat out competitors if you have content that is extremely relevant. There are plenty of cases where if you try to advertise a keyword with irrelevant content, search will not trigger an ad. Creating relevant content to increase your quality score is critical to your search marketing efforts. The quality score directly correlates to the quality and relevance of the content that exists on the page that you’re sending traffic to.

Again, the higher the quality and relevance of the content, and the higher the Quality Score. The higher the Quality Score then the lower the Cost Per Click.
It is the combination of keyword and the quality score and the competition which determines whether or not you can get an efficient cost-per-click. When our company does audits of search campaigns we are often able to find efficiency by creating content, then optimizing and fine-tuning keywords.

Another important factor within PPC is conversion tracking. Conversion means different things to different people. Perhaps a conversion for you means selling a dress as a conversion. For someone else it could be an email signup or a new account creation. There are different measures of success as it relates to a conversion within the search platforms.

You can use Google analytics or another analytics provider to create conversion tracking and actually optimize your campaigns based on conversions. Conversion tracking is vital for measuring the success of your PPC program. What you ultimately end up with is a customer acquisition cost. Establish a benchmark and optimize to what works for ROI. It is important to also mention that it is not typically a good expectation to believe that you will realize the cost of the marketing expense in a single transaction. Typically, companies work to establish a CLTV or customer lifetime value. Let’s say that it costs $90 to acquire a customer on my e-commerce site. That $90 cost allowed me to generate $100 in revenue but actually netted me $40 after COG’s and ad expenses. I have spent $90 on the customer but I’ve only generated $40 in net revenue. Some people might look at that and say there must be something wrong. The actual use case here is that we cannot look at acquisition cost directly correlating to the profit of the sale. We have to think about how much the paid search activity head towards the lifetime value of the customer. There are lots of statistical models that we can get into, but we’re not going to go there today. Put simply is that that customer may make five dress purchases this year. That $90 acquisition cost now turns into $240 profit. That is just the annual customer value. Lifetime customer value looks at a much longer life cycle.

Search engine marketing is a great channel to take prospects and turn them into customers Search can be the beginning of your journey to create sales and loyalty.

Just remember the formula:

Choose the right keywords and match type based on demand and cost per click
Create keyword related content to increase Quality Score
Set realistic expectations for performance based on Customer Lifetime Value

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