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.

How does SEA work?

The principle of search engine advertising is quite simple. The first step of promoting a business with Google, Bing, or Yahoo is defining the keywords that are relevant to that respective business. It is therefore essential to identify the key search terms that are used to find similar websites and offers. Once you have this set of key words, you can begin to create a draft text for your ad. You must then determine how much you’re willing to pay for a user to click on your advertisement. Your advert’s position in the results can also put you at an advantage against your competitors, however this is just one of many factors that a successful SEA campaign is comprised of. With much to consider during the advertising process, an SEA specialist will invest a good deal of time on every stage of developing, executing, and maintaining online marketing campaigns. In the preliminary stages, it is important to consider budgets and regional restrictions. The landing pages, which your ad links to, must then be optimized. Once the ad is subsequently activated, the performance data can be analyzed and marketing methods fine-tuned.

For an ad to have the desired effect, it is not unusual for advertisers to need to rewrite their copy several times before they have created an appealing text with smoothly integrated keywords. 

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How much does SEA cost?

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.

Goals of an SEA campaign

Search engine advertising offers website owners the opportunity to place adverts exactly where potential customers will look for their desired products and offers. In this way, SEA uses adverts to answer search queries, rather than bombard the user with unwanted information. If the ad copy and landing page closely match the user’s intentions, the search engine is less likely to read that advertisement as spam. Since the highest ranking ads are extremely relevant to the user’s search, search engine advertising is happily accepted by the majority of search engine users. SEA is therefore an effective instrument for increasing website traffic, promoting brands, and generating conversions.

Businesses generally use SEA to meet the following goals:

  • Increase traffic: The core objective of search engine advertising is to direct a stream of visitors to a website. SEA therefore presents itself first and foremost as a source of traffic for new websites. In a fight for the top spot, the ads are ranked by quality and relevance, but their place on the first results page can also be secured through a high bid.
     
  • Promoting brand awareness: Search engine advertising is an efficient marketing instrument for enhancing a brand’s visibility amongst others in its field. One goal of an SEA campaign should therefore be to occupy keywords services with advertisements for your own product lines or services.
     
  • Generate conversions: Above all else, search engine advertising pays off when it contributes to gaining potential customers (leads) or to the increased sale of products and services. Advertising programs such as Google Ads make it possible for website owners to determine exactly how frequently search engine ads lead to conversions, as in when a potential customer becomes a customer.

Is search engine advertising worth it?

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

Advantages of search engine advertising Disadvantages of search engine advertising
Quickly visible results Continual costs
A great amount of control Competition for commercial keywords
Large outreach  
Widely accepted  
Transparent invoicing  

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.

Who should use search engine advertising?

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.