Paid search gets a lot of press because it’s making a big bang. However, many advertisers and web managers are still confused about this hotly evolving science (or art depending on your perspective).
Paid search allows an advertiser to pay for small text ads, that sometimes look like they are regular search result listings or they are offset from the regular listings as small promotional boxes, and are served up alongside regular search result listings. For example, do a search for “intranet consulting” and you will produce the following:
The paid ads are those that are highlighted by a red box (the red boxes are strictly for illustrative purposes). The regular search result listings appear as they normally do in the center of the page.
In publishing the ads, you choose the keywords that you want your ad associated with. In the example above, advertisers are paying to have their name associated with the term “intranet consulting.” The advertiser only pays only when someone clicks on the ad. This rate, called Cost Per Click (
The big players in this space are Google and Yahoo! (which bought Overture) with Google still leading the way.
Paid search also allows you to track exactly how you’re doing: how many times people are seeing your ad, how many are clicking through, and what is the exact cost to you the advertiser.
However, paid search is part art and part science. You may want to have your ad associated with keywords and phrases, but you will have competition. And getting the top spot is not yet determined solely by price but my algorithm. However,
Bidding on keywords can be very expensive if you have rivals jockeying for position. Alternatively, you can bid on more obscure keyword phrases that no other advertiser is using where you can assure yourself the number one ad placement, but you won’t get as much traffic as more popular search phrases.
To determine what keywords to associate with your ad, there are a couple of tools:
· Hitwise's search term analysis – type a phrase and it will list the sites that receive the most traffic and their percentage share of the total traffic generated by the phrase.
· WordTracker – competitive analysis tool to seek out the best keywords based on over 300 million keyword phrases.
· Pay Per Click Galaxy - generates thousands of keyword phrases to consider and experiment.
· Google link analysis – type in your URL and find out what websites link to your website.
While traditional online display advertising (banner, spatials, etc.) accounts for 45% of all online advertising, paid search advertising accounts for 34% of the marketing (JupiterResearch) and is growing at a massive clip. In fact it won’t be long until paid search advertising passes all other forms of online advertising. The study forecasts paid search to exceed banner ads by 2010. At the same time, the cost-per-click is anticipated to grow from $.39 in 2004 to $.58 by 2010.
Despite the increase in cost, paid search clearly is good bang for the buck. Forty-two percent of the study respondents that classify themselves as sophisticated marketers plan to increase their paid search budget next year.
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