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Paid Search Marketing

Beginner's Guide

Paid Search Marketing Beginner's Guide

Econsultancy London

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or any information storage and retrieval system, without

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Copyright © Econsultancy.com Ltd 2011

Published 2011

Paid Search Marketing Beginner's Guide

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage

and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2011

Contents

1. About this report .............................................................. 1

2. About Econsultancy ......................................................... 2

2.1. Further reading .......................................................................... 2

3. What is a search engine? ................................................. 3

4. Why do people use search engines? ................................ 4

5. What is search engine marketing? .................................. 5

6. What is paid search marketing? ...................................... 6

7. Which is better: paid or natural search? ......................... 7

8. How does paid search work? ........................................... 8

9. Why should I bother with paid search? ........................... 9

10. Who manages paid search? ........................................... 10

11. Where do I start with search? ........................................ 12

11.1. Key considerations: four questions to ask yourself ................... 12

12. Resources ....................................................................... 13

12.1. Further reading and research .................................................... 13

12.2. Training courses ......................................................................... 13

Paid Search Marketing Beginner's Guide Page 1

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1. About this report This guide aims to be the first step in a journey towards becoming an in-company expert in paid

search; something many people are using successfully to drive online sales.

You can use the guide to discover what paid search is all about: how it works, how to manage it,

what pitfalls you need to avoid and why an investment in search marketing can be a very smart

move.

But you should view this concise beginner’s guide as a jumping-off point. Other reports we have

published go into much more detail about search engine marketing (both search engine

optimisation and paid search).

We hope this guide helps you. If you have any feedback please email editor@Econsultancy.com.

Best of luck!

Paid Search Marketing Beginner's Guide Page 2

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2. About Econsultancy Econsultancy is a digital publishing and training group that is used by more than 200,000

internet professionals every month.

The company publishes practical and timesaving research to help marketers make better

decisions about the digital environment, build business cases, find the best suppliers, look smart

in meetings and accelerate their careers.

Econsultancy has offices in New York and London, and hosts more than 100 events every year in

the US and UK. Many of the world's most famous brands use Econsultancy to educate and

train their staff.

Some of Econsultancy’s members include: Google, Yahoo, Dell, BBC, BT, Shell, Vodafone, Virgin

Atlantic, Barclays, Deloitte, T-Mobile and Estée Lauder.

Join Econsultancy today to learn what’s happening in digital marketing – and what works.

Call us to find out more on +44 (0)20 7269 1450 (London) or +1 212 699 3626 (New York). You

can also contact us online.

2.1. Further reading

UK Search Engine Marketing Benchmark Report

http://econsultancy.com/uk/reports/uk-search-engine-marketing-benchmark-report

SEMPO State of Search Engine Marketing Report 2010

http://econsultancy.com/uk/reports/sempo-state-of-search

Search Marketing Statistics

http://econsultancy.com/uk/reports/search-marketing-statistics

Paid Search Marketing (PPC) - Best Practice Guide

http://econsultancy.com/uk/reports/paid-search-marketing-ppc-best-practice-guide

PPC Bid Management Technology Buyer's Guide 2010

http://econsultancy.com/uk/reports/ppc-bid-management-technology-buyers-guide

PPC Advertising Request for Proposal (RFP)

http://econsultancy.com/uk/reports/sem-ppc-advertising-request-for-proposal-rfp

Paid Search Marketing (PPC) Business Case

http://econsultancy.com/uk/reports/sem-paid-search-marketing-ppc-business-case

PPC – Digital Marketing Template Files

http://econsultancy.com/uk/reports/search-engine-marketing-ppc-digital-marketing-template-files

Paid Search Marketing Beginner's Guide Page 3

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3. What is a search engine? You’ve heard of Google, presumably. What about Bing or Yahoo? ChaCha or Wolfram Alpha?

There are hundreds of search engines that people use to find websites (like yours). As such, they

are tremendously powerful allies in your battle to attract relevant visitors.

Search engines help users find web pages on any given subject. They index web pages in databases

and list them in the search results in order of ‘relevancy’ (to the search query).

And they also feature ads, typically labelled ‘sponsored links’.

Ads on search engines = ‘paid search’

Search engines make billions from placing small text ads alongside the ‘natural’ search results,

found on the left of the page. Look out for them. They can be highly effective in driving leads and

sales.

These ads work for advertisers because they are demand-driven, very targeted, and appear at a

time when the consumer is actively searching for something.

Ads are bought on an auction basis, where you bid for position. The highest bid (defined by the

amount you are prepared to pay per click) typically wins, though there are a few other factors to

take into account.

Before we dive into the detail on the joys of paid search, let’s first try to understand what drives

search engine usage among consumers…

Paid Search Marketing Beginner's Guide Page 4

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4. Why do people use search engines? One thing is for certain: people simply love to search. The likes of Google are the first port of call

if you are looking for information. Gone are the days of stumbling around dusty, old libraries.

People want information at their fingertips – and they want it fast. Now they have it. Google will

deliver relevant results in a fraction of a second. That’s why people use Google.

Searchers are looking for all kinds of information. They come in all shapes and sizes, but search

activity can be split into three broad categories:

1. Content (you want to find news articles, videos, forums, blogs etc)

2. Research (you want reviews, product and price comparison sites)

3. Commerce (you want to buy something)

The search query a user types into Google tells you a lot about what they are trying to find, and,

specifically, about their mindset. Users refine their searches, typically by adding more words to

the search query to hone in on something highly relevant.

It is also worth noting that people use search engines (and the browser toolbars they provide) as a

quick way of navigating to their favourite sites. In the past this was largely done via bookmarking

sites (by clicking ‘add to favourites’ in Internet Explorer), but many of the top searches last year

were for brand names (iPhone, Facebook etc)

An example of search activity during the buying cycle

If the searcher is a consumer in the process of buying something then they may be in a research

phase (what kind of product do I want?), the price/product comparison phase (where can I buy

the product?), or the buy phase (I know what I want, now give it to me!).

Research phase. The search query might be ‘digital cameras’ and then ‘digital camera

reviews’, to identify a product or create a shortlist.

Price/product comparison phase. The query might be ‘sony cybershot offers’, if the

consumer likes the look of Sony’s product.

Buy phase. The search might now be very specific as the consumer knows exactly what they

want, for example ‘sony cybershot t10 black’.

Paid Search Marketing Beginner's Guide Page 5

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5. What is search engine marketing? Search engine marketing, or SEM, is about using search engines like Google to attract visitors to

your website.

There are two ways of going about this. This report focuses on the latter…

Search engine optimisation (SEO). This is about trying to gain prominence in the

‘organic’ or ‘natural’ listings - the results found on the left of the search results page. Clicks on

these links are free, but SEO requires patience, investment and a long-term approach.

Paid search. These ‘sponsored links’ are essentially advertisements, which advertisers can

control (for a fee). Companies choose to place ads that are matched to search queries. These

links tend to be found on the right of the page and at the very top. You pay every time

somebody clicks on them, but only if they click through to your website. You define how much

you’re prepared to pay: it’s essentially an auction that governs ad position, with the top ad

typically paying the most per click.

Search engine marketing is hugely important for all businesses, even if you are not selling online.

There are no exceptions to the rule – you absolutely must have a strategy for search. Despite

this fact, many businesses have yet to fully embrace the search engines.

Search engines allow you to reach out to consumers at a time when they are actively ‘searching’

for something. It is a highly-targeted form of advertising that can deliver excellent results.

Search engines are immensely popular and the internet’s foremost navigational tool. As a

route to market, Google, the most popular search engine by far, is unsurpassed. It generates many

billions of pounds worth of revenue for the companies indexed in its results (from paid search

ads). Google’s users are your prospective customers, and probably your existing ones too.

With search engines, placement is everything. Most people will click on the first result

presented to them by following a keyword search. The vast majority won’t get beyond the first 10

results. As such, if your company isn’t found on the first page of the organic results then you may

consider buying your way to the top via paid search platforms (such as Google Adwords).

If you’re new to search there is no need to panic. It really isn’t rocket science. You just need to

start somewhere. This guide will help you understand the opportunity, and we have some other

guides to help you understand the finer details of implementing a search marketing strategy, and

planning campaigns.

Resource

Econsultancy also has a popular SEO Beginner's Guide available for download.

Paid Search Marketing Beginner's Guide Page 6

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6. What is paid search marketing? Paid search marketing is about making your product, services or brand highly visible on search

engines by buying ads linked to search queries.

For example...

If you run a shoe shop you might want to achieve high visibility in Google for terms like ‘men’s

shoes’. You can ‘buy’ this term, design an ad, choose a landing page on your website, set a budget,

and then have a paid search campaign up and running (in a matter of hours, potentially).

Paid vs. non-paid results?

The screenshot below shows you how Google divides up its search results to accommodate both

organic and paid listings. For the purposes of this report we are primarily concerned with the area

shaded in dark blue…

The right-hand column and the first three results on the left column – all shaded in dark blue

– are ‘sponsored links’ that have been paid for. Every time somebody clicks, the advertiser

pays a fee.

The left-hand column, shaded in orange, hosts natural listings that Google has selected as the

most relevant websites for the search term (in this case ‘car insurance’).

Paid Search Marketing Beginner's Guide Page 7

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7. Which is better: paid or natural search? Both have their own strengths and weaknesses, but, like any dynamic duo, they are better when

used together as part of the same marketing strategy.

Paid search is a straightforward media buy that is very easy to understand and to implement. The

advertiser chooses which search queries should trigger the ad to appear, and also chooses the

‘landing page’ (the page the visitor ‘lands’ on after clicking through from Google). As such it can

be hugely targeted. These controls are highly valuable, but it comes at a cost.

Paid search can be used to plug gaps in your natural search strategy, where your website’s pages

don’t rank so well in the organic listings.

Meanwhile organic search is essentially free – you don’t pay for clicks. You may need to invest in

other areas (such as website improvements, content and copywriting, link-building and PR) to

make your website ‘Google-friendly’, and it takes longer to achieve these results, but the upside

can be massive.

You should also consider how people use websites. Typically, the eye will automatically aim for

the left of the page, rather like reading a book. As such, content that appears on the top left of a

web page tends to see the most action.

Because most paid search ads are placed on the right they receive fewer clicks, as can be seen on

the image below (the peaks indicate click activity). However, the paid ads that often sit at the top

left of the page can generate high response rates. Also, the ads on the right do work well; it’s just

that the volume of clicks is lower than the ‘free’ results, relatively speaking.

Paid Search Marketing Beginner's Guide Page 8

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8. How does paid search work? We explain this in far greater detail in our Paid Search Marketing Best Practice Guide, but for now

let’s distil paid search into three points:

It is essentially buying text adverts on the likes of Google and Yahoo by bidding on ‘search

queries’. How much you are willing to pay for a specific search term has a huge say in how far

up the listings, but the biggest bidder is not guaranteed top spot – there are some other

factors at work.

There are various ways you can pay for your ad, but the most common method is pay per

click (PPC). This means you only pay when someone clicks on your ad. No click, no fee.

Paid search is a very quick way to get to the top of a search engine’s results. In fact, if you are

willing to pay enough, you can be top dog within hours. In this sense, results are guaranteed.

Get the detail

Econsultancy’s Paid Search Marketing Best Practice Guide is the definitive guide to planning and

executing a paid search strategy. Ideal for both beginners and experts, it covers all aspects of paid search across

250 pages.

Key Sections:

Part 1. Planning For Paid Search Marketing

Part 2. Targeting With Paid Search Marketing

Part 3. Budget And Bid Management For Paid Search

Part 4. Creative, Testing And Optimisation For Paid Search Marketing

Part 5. Communications Integration For Paid Search

Part 6. Appendices For Paid Search Marketing Best Practice Guide

Paid Search Marketing Beginner's Guide Page 9

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9. Why should I bother with paid search? There are four key reasons why you should make the effort…

1. Higher visibility

Make it easy for web users to find your shop window, products and services. More than half of

all web traffic originates via the search engines, so making it onto the first few pages of Google

or Bing could not be more crucial. If you cannot do this via organic search, then you can

quickly buy your way to the top.

2. Reach out and touch (at the right time)

Want more customers? More leads? More sales? The internet is a global marketplace and

consumers appear to have lost their fear of buying things online. E-commerce is booming!

Remember that search is demand-driven so you can target your messages to specific search

queries. It is surely one of the least intrusive ways of advertising your presence to interested

consumers.

3. Competitor activity is intensifying

UK businesses spent more than £3.5bn on search engine marketing in 2010, so if you’re

currently spending nothing then you’re already way behind. Companies spend to try to stay

one step ahead of their rivals in the rankings. If you’re serious about online marketing, you

cannot afford to be left behind. Try searching in Google for keyphrases relevant to your

business and take a look around – is your website listed? What about the competition? Don’t

let them steal a march…

4. Because it’s very easy to gauge its success

The beauty of the internet is that every click is monitored and recorded. If you want to know if

your SEM strategy is working, it is very easy to find out. Are you top of the listings? How

many customers came to you via a search engine? Which keywords generate the highest

conversion rates? Paid search lets you dig into the data, optimise your campaigns, and

generate even higher returns.

What results can I expect from paid search?

Good ones. The key thing to remember is that you can see what’s going on, so you can actually

measure results properly, almost in real time, optimising campaigns on the fly. Compare this level

of control and visibility to an expensive TV or print ad campaign!

More sales/leads

Most companies use paid search to drive highly-targeted traffic to their websites, with a view

to converting them to a customer or prospect. For transactional e-commerce firms, paid

search is one of the very best sources of new business.

High conversion rates

Studies have found that search engines generate better-than-average conversion rates, based

largely on the fact that shoppers are actively looking for products.

Highly accountable, no guesswork needed

As mentioned, there’s no need to work on assumptions with paid search. You can see exactly

what’s going on. You control the ads, the keywords, the costs, the budgets, and you can

quickly tweak all of these elements to finesse your campaign. It is unlike any other ad medium

in this respect. Your marketing spend has never been so measurable.

It’s scaleable, so ramp up the budget for better results!

The joy of paid search is that if you spend £50 a day and make £100 then you can scale it up

tomorrow. Try spending £100 to make £200. And so on. Demand is finite, for sure, but aim

for the ceiling. Scale up!

Paid Search Marketing Beginner's Guide Page 10

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10. Who manages paid search? Some companies choose to manage their search activity in house but many choose to outsource,

particularly since skilled paid search marketers are hard to find.

Why outsource?

Companies that choose to outsource their paid search requirements tend to do so either because

they can’t recruit the right calibre of staff, or because they need help in managing a lot of

keywords.

What sort of agency can I use?

The main choices to consider are:

Traditional media agencies

Full-service digital focus agencies

Specialist search engine marketing agencies

Specialist paid search marketing agencies

In-house paid search specialists

While all of these may deliver a great service, often it is the specialist digital or paid search agency

that will perform best.

Outsourced charging models

1. Account management fees

These are the most common charging structures. Fees average between 5%-20%. Higher rates

might include ‘hidden’ charges, like monthly management fees, or setup fees, so may actually

prove a better choice.

2. Pay-by-performance deals

Potentially hazardous – the more you spend, the more the agency tends to receive, so scaling

up could cost you. Typically these schemes are goal-orientated (for example, visits, sales,

leads, registrations, ROI). If you do this, the best combination of goals is clearly ‘sales + ROI’.

3. Agency commission or rebates

Search engines pay a fee to agencies for media buying, in the same way that TV ad agencies

win agency commission for placing big campaigns. However the engines are lowering these

fees or in some cases removing them altogether, so whether this model has longevity isn’t

clear at this point.

4. Fixed price or hourly arrangement

Good for initial or temporary work. The client and agency agree how much time will be spent

in managing the account each month. For example: ‘Three days across the month to involve

regular monitoring and adjustment of the Adwords account at a day rate of £500; total of

£1,500.’ Alternatively, an hourly rate can be used up to a maximum number of hours. For

example: ‘£65 per hour up to a max of £2,000 per month.’

Paid Search Marketing Beginner's Guide Page 11

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Typical costs

Your investment in paid search breaks down into the media spend on clicks, and the spend on

managing your advertising through activities such as planning, review, keyphrase analysis,

account setup, creative development and testing, bid review and reporting.

In terms of day rates, the fees for agencies profiled in Econsultancy’s Paid Search Agencies

Buyer’s Guide typically range from £500 to £1,000 per day.

Some companies and packages may charge a one-off fee, but these are likely to offer a

relatively limited solution with little room to improve your listings over time.

Charges for paid search are typically based on an initial project set-up fee and an ongoing

monthly charge for management and reporting.

Set-up fees for those agencies profiled in our buyer’s guide are in the range of £1,000 to

£6,000, depending on the scope of the project.

Agencies will also generally impose a regular charge, usually monthly, in line with a longer

term approach to improving your visibility. The monthly cost will vary according to the

project or projects.

Looking to outsource paid search?

Econsultancy’s Paid Search Agencies Buyer’s Guide, focused on the UK search market, contains profiles of

leading agencies operating in the UK. The guide also provides detail on the issues and trends affecting this

sector, as well as advice about how to find the right agency.

Paid Search Marketing Beginner's Guide Page 12

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11. Where do I start with search? Start? You already have! By reading the basics in this guide you have already set the wheels in

motion. But before you get any new project off the ground you have to think about two key

factors: education and preparation.

Education

Now you have seen how search marketing can transform your business, it is up to you to spread

the word. Educate your colleagues and boss on how much impact it could have on your online

strategy. But don’t stop there. Read our best practice guides and business case reports to find out

more. And work out how paid search and SEO interact with one another for the best results.

Preparation

This is one of the most important aspects of any search marketing project but probably the most

overlooked. Without clear aims and objectives your campaign is doomed to failure before you

even begin. So stop and ask yourself the questions outlined below before doing anything else.

11.1. Key considerations: four questions to ask yourself 1. What are we hoping to get out of this?

What is the overall motivation for using paid search? Do we want more sales, more

subscribers, more traffic or more publicity? This will help determine what keywords and

phrases you want to focus on.

2. What is the timeframe?

How long will it take to get off the ground? Is this a quick fix or part of a long-term

strategy? This will help decide whether to focus your strategy on paid search, which

essentially is a quick fix, or search engine optimisation, which is more of a long-term

commitment. The best strategy is to use both in conjunction with one another.

3. How much money is needed?

There’s no ‘minimum’ really. Paid search scales very well. It is wise to start off with a low

budget to conduct an experiment. Optimise your campaigns once they’re active and

monitor the results carefully. Finesse your programme and then scale it up, if you’re

generating returns. Your web analytics tools can help you see a 360 degree view of paid

search, from keyword query to checkout. But you must measure campaigns properly.

How much you spend will also be determined on whether you decide to outsource or not.

4. Who will be responsible for this project?

Will it be run entirely in house or will it be handed to another company to sort out? Do

you have the staff to run such an operation? Who will coordinate training?

Paid Search Marketing Beginner's Guide Page 13

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12. Resources Econsultancy has the knowledge. Now it’s your turn. Happy hunting, and good luck…

12.1. Further reading and research UK Search Engine Marketing Benchmark Report

http://econsultancy.com/uk/reports/uk-search-engine-marketing-benchmark-report

SEMPO State of Search Engine Marketing Report 2010

http://econsultancy.com/uk/reports/sempo-state-of-search

Search Marketing Statistics

http://econsultancy.com/uk/reports/search-marketing-statistics

Paid Search Marketing (PPC) - Best Practice Guide

http://econsultancy.com/uk/reports/paid-search-marketing-ppc-best-practice-guide

PPC Bid Management Technology Buyer's Guide 2010

http://econsultancy.com/uk/reports/ppc-bid-management-technology-buyers-guide

PPC Advertising Request for Proposal (RFP)

http://econsultancy.com/uk/reports/sem-ppc-advertising-request-for-proposal-rfp

Paid Search Marketing (PPC) Business Case

http://econsultancy.com/uk/reports/sem-paid-search-marketing-ppc-business-case

PPC – Digital Marketing Template Files

http://econsultancy.com/uk/reports/search-engine-marketing-ppc-digital-marketing-template-

files

12.2. Training courses Econsultancy has a fantastic training division that is retained by some of the world’s biggest

brands. We train both privately and publicly, depending on your needs, and because we truly

understand how the internet affects businesses we’re able to deliver everything from ‘starter

courses’ to high-level strategic briefings for executives.

Check out our paid search training courses