Search engine marketing, often known as SEM or PPC (pay per click) or just simply Paid Search, uses a variety of acronyms, that each represents a measurement or bidding strategy. I’ve tried to break them down and explain them below.

Cost per click (CPC$) – When entering into a paid search or Google Adwords campaign, you will have to set a maximum cost per click bid (CPC$) for each keyword or ad text. This is the maximum you’re prepared to pay per click you might receive for any given keyword that your search creative may show up in Google’s search results. To rank number one on Google’s search results, on the right hand side in the sponsored links area, you will only pay $0.01 cent more than the 2^nd best bid. So if the existing highest bid for the keyword “online” is $1.20 and you bid $1.30, you will become the highest bidder, and should rank #1, but you will only pay $1.21 for the position.

Search creative – Your search creative is the heading, description and click through URL that you use for your paid search ad.  This is also known as ad text.

Your search creative needs to be intuitive. It needs to match the keyword that the user has just typed into the search box and it needs to be informative and engaging to entice the user to click on it. As if this isn’t hard enough to anticipate what they user is thinking or looking for when writing your search creative, it must also match the landing page it will click through to as well. If you have excellent search creative that generates a lot of clicks but the landing page doesn’t deliver to their expectations, you will get a poor quality score and undo your good work.

You can run up to 5 different search creative for each keyword. Google will automatically run them all in a 20% rotation and will optimize to the best performer. This helps you learn what your users relate to and improve your search creative over time.

Search creative is also a good medium to use for testing of messaging before a major ad campaign. If you’re tossing up between a few different phrases, use them in your search creative (as long as they match the landing page) and you will get very quantitative results to measure.

Click through rate (CTR%) – Your click through rate (CTR%) is calculated by the number of times your ad has been shown in search results and how many times it has been clicked on. Your click through rate is a strong indicator if your search creative is strong or weak.

Your click through rate is still very relevant to your bidding strategy and quality score. If you are the top bidder for a keyword, but your CTR% is poor, Google can relegate your ad to 2^nd or 3^rd ranking because your competitors have a stronger click through rate and Google wants to provide its users with the best possible results.

Quality score – Your quality score is based on your search landing page and the number of users who have clicked on the sponsored ad and they clicked straight back – this is called a “bounce”. If too many users bounce back to Google immediately after clicking on your ad, Google assumes that the page does not match the search keyword used and penalizes you for poor quality.

Remember, Google wants to give their users a good experience (the best possible search results, as fast as possible) – they reward websites that help them do this with a good quality score. A strong quality score can help you outrank competitors with dedicated search agencies and larger budgets than yours.

PPC SEM Search Engine Marketing Bidding Strategies Are Like A Blind Auction

Search Bidding strategy – your Google Adwords bidding strategy will also depend on your objectives, your competition, your timeframe and your budget.

One bidding strategy is to always rank #1 for your most important keywords. This ensure you always show on the search results page, you get brand exposure and usually get more clicks, but it also burns through your budget fast as well. This strategy is often used for head terms – generic keywords or brand terms that users arte typing in at the beginning of their research or at the start of the consideration cycle.

Another bidding strategy may be to always be within the first 3 paid search listings. This way you sometimes show above the organic or natural search listings on the left side but if not, because you’re ranked number three, it makes you number one on the right side listings. It also still gets a lot of brand exposure but doesn’t burn through your budget quite so fast.

You might consider a bidding strategy that focuses on long-tail terms – which are multiple words or a phrase that users might type into Google when they have done some research and are further along in their consideration cycle.

Your bidding strategy may be to day target or day-part target, based on user behaviour or website analytics. Web analytics can give you insight into your customers buying patterns and behaviours. Maybe you sell digital music and your website analytics is telling you that your existing customers buy more downloads on a Friday. After doing some research and looking at the click stream that shows what websites were referring traffic to you, you figure out its because of a Thursday night music TV show. You may choose to only focus your budget and bidding strategy on Thursday nights and Friday and Saturdays. This will conserve your budget and bring you a higher quality prospective customer.

Day-part targeting is simply targeting the time of day. Similar to the example above, you might notice that you get most of your sales or conversions between 9am-12 noon in the morning, so you set your bidding strategy to only show your search ads from 8am to 1pm. Again, this conserves your budget and should still increase your sales given the contextual relevance.

Okay so that is just the tip of the iceberg. You’ve also got search bidding strategies such as broad match, exact match, phrase match. You can insert keywords into your ad-text headings and so much more. Watch this space.