The best way to explain search engine marketing is with an example. Imagine that you sell cell phones and that a prospective customer is searching on a major search engine such as Google for the phrase “free cell phone”. That prospect will probably see a page like this:

There are three important parts to this page that we need to analyze: the search term (i.e. Free Cell Phones), the paid ads and the natural search results. See image below:

Search engine marketing is the process of getting your website to appear at the top of the search engines for paid ads and/or natural search results when someone types in a relevant search term.

In a later blog post, I will explain how to optimize your website for the natural search results (also known as search engine optimization). Right now, though, I want to focus solely on the paid ads that are displayed on the top and right hand side of the major search engines. Marketing your site through these paid ads is known as paid search, pay-per-click or bid for placement marketing.

If you were ever wondering how Google makes its billions of dollars, it is through paid search. It is actually free to have your ad displayed on Google, but if someone clicks on your ad, Google will add to its coffers by charging you a specified cost per visitor.

Your positioning is determined by how much you are willing to pay per visitor and something called a quality score. For now, let’s assume the quality score does not exist.

Imagine again that the cell phone vendor wants to appear at the top of the paid search ads when someone does a search for the term “free cell phone.” To do this, this vendor would have to enter an auction for that phrase. The more that they are willing to pay per visitor, the higher they will appear in the search results. For example, suppose wirefly.com is paying $1.00 per visitor for the #1 spot. Our vendor would have to pay $1.01 to bump wirefly.com to the #2 spot while taking over the #1 spot. Once again, this assumes that the quality score does not exist.

Let’s now assume that it does exist. The quality score is a subjective measurement on how important your ad is relative to the other ads displayed. It is determined by multiple factors that range from the percentage of people that click on your ad to how many times the word searched in Google appears in your ad. The higher your quality score, the less you will have to pay per visitor for a specific spot.

For example, imagine that wirefly.com, the current advertiser in the #1 spot for the search term “free cell phone” was bidding $1.00 per visitor and had a quality score of 2. If the cell phone vendor wanted to grab the #1 spot and had a quality score of 5 (The higher the better), it could pay less than $1.00 per visitor since it has a higher quality score.

Now that we have explained paid search advertising, it is important for us to understand how to get ranked in the natural search results. This will be explained in the next blog post.

Rise Interactive is a Chicago-based Internet marketing company providing insight into global Internet marketing for Fortune 1000 clients.

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Tags: natural search, organic search, paid search, ppc, search engine marketing, sem, seo

This entry was posted on Wednesday, March 18th, 2009 at 9:52 am and is filed under Paid Search (PPC), SEM Tutorial, Search Engine Optimization (SEO). You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.