Search Marketing

The key to any successful form of advertising is to target what you're offering to those that are looking for it.  Search engine advertising lets you be very specific in what you're targeting.

There are four benefits to search engine advertising:

1. There are over 8 billion searches performed on search engines such as Google, Yahoo, and MSN a month.  That's great exposure.
2. You get to specify for what search terms (keywords) you want your ad to display and how much you're willing to pay per click for each set of keywords. 
3. Unlike newspaper, radio, or other forms of advertising, you pay for results – you only pay the search engine company if someone clicks on your ad. 
4. You get to set a daily budget on how much you're willing to spend on the ad campaign.

How much does it cost you when someone clicks on your ad from a search engine?  It can cost anywhere from 5 cents to 10+ dollars per click, depending on a two main factors.  One of the factors is how many others are competing for advertising for the same keyword.  For example, a generally competitive keyword that a lot of advertisers are going for is "real estate".  If there are hundreds, maybe thousands of advertisers vying for the top ad spot for "real estate", the search engine will award the top ad position to the highest bidder (the advertiser willing to pay the most) for the click.  On the other hand, if you want your ad to show up for a search term that few others are competing for (such as "ski goggles" in the summer time), the search engine will place your ad for pennies.

Another factor is the effectiveness of your ad.  The search engine's ad system keeps statistics on how many times it displayed your ad versus how many people clicked on the ad.  This is called your ad's "click through rate".  If your ad was displayed 1,000 times and twenty people clicked on your ad, your click through rate is 2%.  The search engine favors ads that have a higher click through rate over those with a lower click through rate, because the search engine knows it's more likely to get paid by placing a good ad in front of a searcher over a poorly performing ad.

One other thing you need to pay attention to is how your visitor to your website responds once he or she clicks on your ad.  My advice is to make the page the visitor immediately sees after clicking on your ad (often called the landing page) as attractive and relevant to the ad as possible.  Once you get people coming to your site, you then need to work on the second part – getting them to buy.  There's a funny story of a grocery store that announced an amazing 90% off select daily necessities products ad to get people into the store.  Once customers came in to the store, they found out that the item referred to in the  sale was table salt (not something we generally stock up on).  I'm sure the customers quickly lost interest in that grocery store's offerings.  In the end, it doesn't do much good to drive a lot of people to your site if you can't help them to buy the products you offer.

How do you know if you're getting a good cost-per-click rate on your search ads?  In my experience for one of my online stores, I try to keep my cost-per-click around ten cents and my click through rate at two percent or higher.  It does depend on what you sell.  For example, if on average one percent of people coming to my website from the search engine ad end up purchasing my product or service, and if my profit from that product or service was $20, it wouldn't make sense to spend any more than twenty cents per click on my search engine ads.  I recall spending nearly $80 one month for a competitive keyword and making only $10 from the one sale it produced.  That was not effective advertising!

Aside from the cost for the ad, one more thing to look for is the approximate number of searches conducted for a certain keyword.  The more searches conducted for a certain set of keywords, the more exposure your ad would get.  The holy grail is to find a popular search term for which it costs very little to advertise.

You can find out what the “going rate” for certain keywords are for advertising on the Google Search engine to get an idea of costs.  Go to https://adwords.google.com/select/KeywordToolExternal and type your keywords in the box.  Then hit the “Get keywords ideas”.  After you see your results, click on the Show/hide columns drop-down menu and click on Estimated Avg. CPC (Cost Per Click).

The following table are a few keywords that I ran through the above site to give you an idea of costs.  I then divided the cost per click with the average monthly search volume.  The lower this ratio, the better “buy” it is when comparing the costs with the number of potential visitors it can bring to a web site.

Interesting how Tax Attorney has only 110k searches per month (an eighth of those searching for “quilting”) and yet costs the advertiser almost $26 per click!  That's very expensive advertising, and I'm sure the price is high because law offices are willing to part with $26 per click to bring people to their website (and hope they sign up for their services).  Of the quilting related terms, it seems like “long arm quilting” is the most competitive keyword – only 18,000 people search for it a month yet it costs an average 62 cents per click for that advertisement spot.  On the other hand, advertising for Quilt Patterns seems to be a real bargain right now.

There are many more factors and tricks to getting the biggest bang for your buck with search engine advertising.  There are those who are professional search engine advertisers, managing ad campaigns for other businesses.  The experts say now is a good time to get started with search engine advertising.  Compared to a few months ago, the overall average cost per click has gone down several percentage points.  It is because large firms are pulling back on their advertising budgets to cut costs in a recession.  This gives opportunities for smaller businesses to get a good placement on ads because there is a little less competition.

If you are interested in learning more about search engine advertising, I recommend starting by visiting YouTube.com and searching for “Google Adwords Tutorial”, “Yahoo Search Marketing Tutorial”, and other related terms.  There are many excellent video tutorials that will take you through setting up an account and placing your first ads on the search engines.

If you are interested in having a professional manage your online advertising campaign, Danemco can assist you.  A member of our team, Derek Jones, has a background in marketing with extensive work experience in online search marketing.  Danemco can give you a free quote and some initial research for your business depending on what your goals are.