What is SEA? The basics of search engine ad­ver­tis­ing

Search engine ad­ver­tis­ing (SEA) is a branch of search engine marketing (SEM). While search engine op­ti­miza­tion (SEO) centers on improving ac­ces­si­bil­i­ty with the use of keywords, SEA places the paid advert directly into the search engine results and on partner websites. The term “search engine ad­ver­tis­ing” is often used as a synonym for keyword ad­ver­tis­ing, which has also created the term PPC (pay per click), referring to the payment method used by the ad­ver­tis­ers. Google’s dominance of the market has led to its ad­ver­tis­ing platform, Google Ads, becoming another term for search engine ad­ver­tis­ing. Despite its various guises, the concept is always the same: placing the ad­ver­tise­ment above, beneath, or next to the search results.

In­cor­po­rat­ing adverts into search results is not unique to Google, however; such services are also offered by Bing and Yahoo. Since the ad­ver­tis­ers pay for their position amongst the organic search results, this form of marketing con­sti­tutes a con­sid­er­able source of income for the search engines.

In principle, it does not cost anything to simply place an ad­ver­tise­ment among search results. Search engine ad­ver­tis­ing works on a cost per click (CPC) basis, so ad­ver­tis­ers only incur charges when a user clicks on an ad and is redi­rect­ed to the landing page. The cost of each click is something that ad­ver­tis­ers are able to decide for them­selves, however, the frequency that the advert is displayed cor­re­sponds to the size of the offer. The al­lo­ca­tion of the ad space is then decided by an auction, also known as Real Time Bidding.

Real Time Bidding: the search engine auction

For every query entered, the search engine checks the terms to determine which ads are relevant and helpful for the user. When the search term contains a commonly occurring keyword, there are often several po­ten­tial­ly suitable adverts, which are rated in order of relevance in a split second. One important criteria in selecting the ad in this case is the CPC bid offered by the ad­ver­tis­er; however, the quality of the ad­ver­tise­ment must also be taken into account in order to create the most helpful selection of results for the user. An es­pe­cial­ly highly ranked ad is more likely to be shown in the most prominent positions during a relevant search. As the top-tier ads are de­ter­mined by their CPCs and quality scores, the value of the ad­ver­tise­ment can be found with the following equation: Top ranked ads = highest CPC bid x quality score

CPC bids

With CPC bids, the ad­ver­tis­ers set the maximum price that they are prepared to pay for a click on their ad. The higher the offer, the more likely it is that the advert will attain a prominent position in the search results. In return, Google’s ad­ver­tis­ing platform grants its ad­ver­tis­ers a high degree of trans­paren­cy and up-to-date in­for­ma­tion about rates in search engine ad­ver­tis­ing. Through fixed monthly and daily budgets, the ad­ver­tis­er can define exactly how much money should be spent on SEA campaigns daily. Google keeps the ad in the search results until the budget for the day is used up. For example, a monthly budget of 3000 dollars can be split into 100 dollars a day, but just how many ap­pear­ances in the search results that trans­lates to depends on the cost per click. The cost per click depends on the consumer demand and can vary from just a few cents to several dollars.

Google‘s quality score

Google has a quality score in place as part of its rating system in order to stop low-quality adverts with high bids landing at the top of the search results. This is ori­en­tat­ed toward the demands of the user and takes their online behavior into account. A well-thought-out SEA campaign with high-quality content will rank con­sid­er­ably higher in the search engines, as it is helpful and inviting to the user. It follows then that a high CPC bid is not the only factor in creating a suc­cess­ful ad­ver­tise­ment. Google’s quality score rates the following factors as essential for an effective ad­ver­tis­ing campaign:

• Expected click-through rate: This is based on how often the ad is run (im­pres­sion) and the number of clicks one ad yields. Ad­ver­tise­ments that have a high click-through rate will be rated as more relevant.
• Click-through rate to the display URL: if the URL used in the ad has already achieved a great deal of clicks, the ad’s quality score will also be set higher. Therefore the display URL does not have to match the link target.
• Landing page quality: if a user arrives on a link target via an ad that was featured for its relevance, trans­paren­cy, and user-friend­li­ness, the ranking will improve.
• Relevance of the ad copy: adverts that take up the top spots have titles and copy that perfectly fits the search query. The more relevant the ad copy, the better the ranking.

The following table provides a summary of the ad­van­tages and dis­ad­van­tages of search engine ad­ver­tis­ing:

Those con­sid­er­ing investing in search engine marketing campaigns should consider how much an SEO strategy will help users ac­com­plish their goals and whether these goals will be more achiev­able through SEO. It is worth re­mem­ber­ing that internet users favor the results of an organic web search; according to sta­tis­tics, only 10 to 20 per cent of users click on paid search results. Search engine ad­ver­tis­ing can therefore not be regarded as a sub­sti­tute for a natural ranking system; many busi­ness­es simply consider SEA to be an ad­di­tion­al aspect of their marketing campaigns. However, it is par­tic­u­lar­ly helpful for gen­er­at­ing traffic using common keywords, es­pe­cial­ly when there is a lot of com­pe­ti­tion in the organic search results, or for temporary actions such as sales and offers. As ad­ver­tis­ing with a search engine should above all else aim to achieve con­ver­sions, it is rec­om­mend­ed to target and answer specific search queries. For example, an online shoe store should use the com­mer­cial keywords “buy shoes” or “order shoes online” in their ad­ver­tis­ing campaigns.

In principle, a suc­cess­ful SEA campaign does not depend on the size of the business. The area, goods and available ad­ver­tis­ing budget should be the biggest factors in de­ter­min­ing the success of an SEA campaign. Smaller companies should therefore be mindful to only use search engines ad­ver­tis­ing when they will be able to generate profit.

It is rec­om­mend­ed to limit the ad copy to de­scrib­ing just the main product or service. SEA offers great potential for spe­cial­ized services; as ad space is auctioned off by the search engine, the click price for an advert depends greatly on the com­pe­ti­tion. For this reason, it can sometimes be sur­pris­ing­ly in­ex­pen­sive to advertise with a search engine if you are promoting a niche product. You can also advertise fairly cheaply if you gear your campaigns to long-tail search terms with lower search volumes.