SEM was used by marketers as a broad term that encompassed all methods to increase a website’s ranking in search engines. In recent years businesses started to use SEM exclusively for paid advertising. These terms are often used to describe SEO, SEM, and PPC. How can they differ?
Search Engine Optimization (SEO) refers to the techniques you use in order to increase your organic search ranking — such as website optimization or link building.
Search Engine Market (SEM) refers to achieving a top ranking on search engine results pages by paying search engines. Later, we’ll discuss SEM.
PPC Advertising (PPC), pays search engines only when people click on your ads. PPC and SEM are often interchangeable. PPC campaigns don’t just have to be limited to search engines. PPC advertising is also supported by social media channels such as YouTube and Instagram.
You need to understand search engines’ logic for displaying ads in order to create a successful search engine marketing strategy. Let’s take Google Ads as an example of search engine marketing. for digital marketing also check SEO Geek.
Keyword Bidding for Ad Auction: PPC Advertising Workflow
Google and other search engines strive to provide users with the most relevant search results. Google will only show advertisements that are highly relevant for the search.
Here is an example of the process Google uses to select relevant ads for display in SERPs.
Comparing bids that match user-supplied keywords
Assume you run a hand-made jewelry business. Your ads should appear on Google for your target audience searching for “buy hand-made jewelry”.
You might find hundreds of hand-made jewelry businesses competing for the same spot in Google’s SERPs. You can create an advertising campaign on the Google Ads website to enter the race for the ad spot.
These are the essential elements for an advertisement campaign:
- Keywords you would like to use in your ad
- Maximum amount per click (Cost per Click)
- Advertising copy
- Address of landing page
Google will accept your campaign and display it when a user searches for “buy hand-made jewelry”. However, only a handful of spots are available, so you must compete with other businesses to get one.
Google must choose a few businesses to appear at the top of the SERPs. Google holds an ad auction to do this.
Calculating Ad Rank and Choosing Ad Auction Winners
Google holds an auction to select ads that will appear in the SERPs. Multiple companies may bid on a keyword. While you may be willing to pay 10 cents per click, another business might offer a bid at 30 cents per click.
Contrary to traditional auctions, however, the highest bid does not always win. Google’s Ad Auction takes many factors into consideration during the decision-making process.
These are the ones:
- Bid amount
- Qualitative score
- Relevance of your advertisement to the keyword (Ad Copy)
- How likely are people to click (Click Through Rate, CTR).
- What a great experience ( Landing Page).
- Relevance of ads to users based on their search intent and location
- Your advertisement’s historical performance
Based on these factors, Google generates an Ad rank for every bid. The top ad place is won by the business with the highest rank. To beat your competitors and secure a top spot in search engine marketing, you need a great strategy.
This post was written by Kristian D’An. Kristian is the owner and SEO Specialist at Lux Digital Marketing, a SEO St Petersburg company. Kristian has been optimizing websites successfully for over 7 years. He has helped his clients achieve the #1 position on Google in several different industries.