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Lecture 24 E-Marketing. Paid Search Marketing Instructor: Hanniya Abid Assistant Professor COMSATS Institute of Information Technology. Objectives. After this lecture you would be able to Review search engine marketing techniques.

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Lecture 24 e marketing

Lecture 24E-Marketing

Paid Search Marketing

Instructor: HanniyaAbid

Assistant Professor

COMSATS Institute of Information Technology


  • After this lecture you would be able to

    • Review search engine marketing techniques.

    • Know the differences between paid search marketing vs traditional marketing.

    • Know how to manage Pay Per Click

A brief recap
A brief recap...

Remember, the main techniques are:

1. Ensure your sites are included in the indexes of the main search.

2 Complete keyphrase analysis to identify phrases relevant to your market.

3 Start a search engine optimization initiative. This may involve restructuring your website.

4 Maximize quality links from and to different sites – run a link-building campaign.

5 Review the relevance of pay per click advertising and trusted feeds

Be sure to devote sufficient resources to deliver ROI from these.

Ensure you employ someone who is knowledgeable to optimize your position with search engines.

Paid search marketing
Paid Search Marketing

  • Paid search marketing or Pay Per Click (PPC) is similar to conventional advertising; here a relevant text ad with a link to a company page is displayed when the user of a search engine types in a specific phrase.

  • A series of text ads usually labelled as ‘sponsored links ’ are displayed to the right of the natural listings .

Paid search marketing1
Paid Search Marketing

  • Although many searchers prefer to click on the natural listings, a sufficient number do click on the paid listings (typically around a quarter or a third of all clicks)

  • They are highly profitable for companies such as Google and a well designed paid search campaign can drive a significant amount of business for the search companies.

Paid search marketing2
Paid Search Marketing

There are two significant differences between PPC and conventional advertising which are its main advantages:

1. The advertiser is not paying for the ad to be displayed. Cost is only incurred when the ad is clicked on and a visitor is directed to the advertiser ’s website. Hence it ’s a Cost Per Click (CPC) model!

However, there are increasingly options for paid search marketing using other techniques, Google also offers CPM (Site targeting) and CPA (Pay Per Action) options on its content network where contextual ads are displayed on third-party sites relevant to the content on a page.

Paid search marketing3
Paid Search Marketing

2. PPC advertising is highly targeted.

The relevant ad with a link to a destination web page is only displayed when the user of a search engine types in a specific phrase (or the ad appears on the content network, triggered by relevant content on a publishers page), so there is limited wastage compared to other media.

Users responding to a particular keyphrase or reading related content have high intent or interest and so tend to be good quality leads.

Pay per click advantages
Pay Per Click - Advantages

In addition to performance-based payment and well targeted prospects, PPC has other advantages:

1 Good accountability. With the right tracking system, the ROI for individual keywords can be calculated.

2 Predictable. Traffic, rankings and results are generally stable and predictable. This contrasts with SEO.

3 Technically simpler than SEO. Position is based on a combination of bid amount and quality score, whereas SEO requires long-term, technically complex work on page optimization, site restructuring and link-building.

Pay per click advantages1
Pay Per Click - Advantages

4. Speed. PPC listings get posted quickly, usually in a few days (following editor review). SEO results can take weeks or months to be achieved. Moreover, when a website is revised for SEO, rankings will initially drop while the site is reindexed by the search engines.

5. Branding. Tests have shown that there is a branding effect with PPC, even if users do not click on the ad. This can be useful for the launch of products or major campaigns.

Pay per click disadvantages
Pay Per Click - Disadvantages

However, these disadvantages need to be managed:

1 Competitive and expensive. Since Pay Per Click has become popular, some companies may get involved in bidding wars that drive bids up to an unacceptable level. Some phrases such as ‘ life insurance ’ can exceed £10 per click.

2 Inappropriate. For companies with a lower budget or a narrower range of products on which to generate lifetime value, it might not be cost-effective to compete.

Pay per click disadvantages1
Pay Per Click - Disadvantages

3. Needful of specialist knowledge. PPC requires a knowledge of configuration, bidding options and of the reporting facilities of different ad networks. Internal staff can be trained, but they will need to keep up-to-date with changes to the paid search services.

4. Time consuming. To manage a PPC account can require daily or even hourly checks on the bidding in order to stay competitive. This can amount to a lot of time. The tools and best practice varies frequently, so to keep up-to-date is difficult.

5 Irrelevant. Sponsored listings are only part of the search engine marketing mix. Many search users do not click on these.

Managing pay per click
Managing Pay Per Click

  • Different advertisers bid on particular key words through a web-based management interface provided by the network to achieve the listing that they want.

  • Setting up a sound account structure is important since it determines how closely you can target your paid search activities.

  • Campaigns provide a way to manage ads for related products. You should set a daily budget, which will often correspond to budgets for different product groups (categories) and geographies.

Managing pay per click1
Managing Pay Per Click

  • Generic search terms and brand terms often also have their own campaigns compared to more specific product campaigns.

  • Within each campaign Ad Groups will be set up which contain keywords that will trigger the ad to be displayed when it is searched upon.

  • Advertisers decide on the maximum Cost Per Click (CPC) they are prepared to pay for each keyword or Ad Group.

Adwords account structure
Adwords account structure

An adgroup within adwords
An Adgroup within Adwords

In this case there is a single keyword which when typed will trigger a targeted message for which different versions can be served for testing.

Managing pay per click2
Managing Pay per Click

  • With PPC as for any other media, media buyers carefully evaluate the advertising costs in relation to the initial purchase value or lifetime value they feel they will achieve from the average customer.

  • As well as considering the Cost Per Click (CPC), you need to think about the conversion rate when the visitor arrives at your site. Clearly, an ad could be effective in generating clickthroughs or traffic, but not achieve the outcome required on the web site such as generating a lead or online sale.

Managing pay per click3
Managing Pay per Click

  • This could be because there is a poor incentive, call-to-action or the profile of the visitors is simply wrong.

  • One implication of this is it will often be more cost-effective if targeted microsites or landing pages are created specifically for certain keyphrases to convert users to making an enquiry or sale.

  • These can be part of the site structure, so clicking on a ‘car insurance ’ ad will take the visitor through to the car insurance page on a site rather than a home page.

  • This is not a form of advertising to use unless the effectiveness of the web site in converting visitors to buyers is known

Managing pay per click4
Managing Pay Per Click

  • Cost Per Click differs between different keywords from generic to specific. It also shows the impact of different conversion rates on the overall CPA.

  • It can be seen that niche terms that better indicate interest in a specific product such as ‘women ’ s car insurance ’ demand a higher fee (this may not be true for less competitive categories where niche terms can be cheaper).

  • PPC search in competitive categories have been shown. Advertising just on these four keywords to achieve a high ranking would cost €33 000 in a single day! Some advertisers target lower positions in the SERPs, since visitors are better value and lower cost.

Managing pay per click5
Managing Pay Per Click

  • The cost per acquisition (CPA) can be calculated as follows:

  • Cost per acquisition

    (100/Conversion rate %) X Cost per click

  • Given the range in costs, two types of strategy can be pursued in PPC search engine advertising.

    • If budget permits, a premium strategy can be followed to compete with the major competitors who are bidding the highest amounts on popular keywords. Such a strategy is based on being able to achieve an acceptable conversion rate once the customers are driven through to the web site.

    • A lower-cost strategy involves bidding on lower cost, less popular phrases. These will generate less traffic, so it will be necessary to devise a lot of these phrases to match the traffic from premium keywords.

Optimizing pay per click
Optimizing Pay Per Click

  • Each PPC keyphrase ideally needs to be managed individually in order to make sure that the bid (amount per click) remains competitive in order to show up in the top of the results. Experienced PPC marketers broaden the range of keyphrases to include lower volume phrases. Since each advertiser will typically manage thousands of keywords to generate clickthroughs, manual bidding soon becomes impractical.

Optimizing pay per click1
Optimizing Pay Per Click

  • Some search engines include their own bid management tools, but if you or your agency is using different Pay Per Click services such as Overture, Espotting and Google, it makes sense to use a single tool to manage them all. It also makes comparison of performance easier too.

  • Bid management software such as Atlas One Point (ww.atlasonepoint.com ) and BidBuddy ( www.bidbuddy.co.uk ) can be used across a range of PPC services to manage keyphrases across multiple PPC ad networks and optimize the costs of search engine advertising.

  • The current CPC is regularly reviewed and your bid is reduced or increased to achieve a goal of profitability or sales volume.

Optimizing pay per click2
Optimizing Pay Per Click

  • More sophisticated bid management tools such as Efficient Frontier use historical click, cost, impression and position data to model the whole campaign in a portfolio-style approach similar to those used by stock market traders. For each keyword and each position, these tools predict the required bid, the actual CPC (cost per click), the click volume and the conversion rate.

  • As more marketers have become aware of the benefits of PPC, competition has increased and this has driven up the Cost Per Click (CPC) and so reduced its profitability. We will soon reach the point where those bidding at the top will be the companies with the most efficient web sites for conversion to outcome and the highest potential lifetime value for cross- selling.

Making your ad creative effective
Making your ad creative effective

  • Creative ad copy is important for quality score and minimizing costs.

  • Your copywriting techniques need to work within the many editorial guidelines.

Beware of the fake clicks
Beware of the fake clicks

  • Whenever the principle of PPC marketing is described to marketers, very soon a light bulb comes on and they ask, ‘so we can click on competitors and bankrupt them ’.

  • Well actually no. The PPC ad networks detect multiple clicks from the same computer (IP address) and say they filter them out.

  • However, there are techniques to mimic multiple clicks from different locations such as software tools to fake clicks and even services where you can pay a team of people across the world to click on these links.

Beware of the fake clicks1
Beware of the fake clicks

  • It is estimated that in competitive markets one in five of the clicks may be fake. While this can be factored into the conversion rates you will achieve, ultimately this could destroy PPC advertising. We believe that, in the longer term, PPC will move to something similar to an affiliate model where marketers only pay when a sale or some other outcome on a site occurs.


  • Overview of Search Marketing

  • Paid Search Search Marketing

    • Advantages vs Disadvantages

  • Managing PPC

One more thing for today
One more thing for today...

  • Assume you are starting a local business that will provide photography services at events. You want to reach the right audience. You have a website where your portfolio is available and users can see your work. However, the visibility of your website in search results is not good.

  • What would you do?