How Does Paid Search Engine Works?

Paid search marketing is known in the marketing and advertising industry by many different names (and abbreviations).

Search engine marketing (SEM, which can include SEO), pay-per-click (PPC), search engine advertising, sponsored listings… the list goes on. And that’s before you start to involve the names of specific advertising programmes and ad types, such as Google Ads (formerly Google AdWords), Google Product Listing Ads, Google Shopping Ads, and Bing Ads.

Paid Search Marketing

Paid search marketing is a critical part of your pay-per-click (PPC)campaign strategy. There is no better time to advertise than when someone already has determined they want your product or service and is actively looking to buy.

In a nutshell, you bid on the keywords related to your business to get your ad in front of users and pay the search engine a small fee if your ad gets clicked.

If your campaign is set up right, this can be a very profitable way to get in front of potential customers who are actively looking for your solution. However, a badly designed campaign can waste a lot of money.

As you can probably imagine, running a successful paid search campaign requires a lot of time and attention. At Disruptive, we constantly monitor and optimize our clients’ accounts to ensure the best results possible.

Paid search marketing isn’t easy, but the results can redefine success for your business.

The key players in paid search marketing

Paid search marketing usually refers to a pay-per-click model where advertisers pay only when people click their ad and visit their website. Google is the 800 lb gorilla in the space; through their ad platform called AdWords, advertisers create text ads that appear on the search engine results pages.

There are many other players (Bing, Yahoo, Amazon, etc), and many types of ads beyond text (banners, video, sponsored email, etc).

How to be successful, and why reaching the right audience matters

Usually, advertisers have something specific they want you to do on the site (like make a purchase, or submit your contact info), but since they are charged by the click, they pay whether or not you buy, sign up, or just exit the site immediately.

Advertisers don’t want to waste their money paying for clicks where people aren’t likely to take action, so they set up targeting to reach a specific audience that’s more likely to be interested in their offer.

Targeting can include: only showing the ad to certain locations, certain languages, people who have visited certain websites, and most commonly – people who typed certain keywords into Google.

How advertisers decide what to spend

Advertisers can track just about everything that happens in paid search marketing – how often their ads were seen, how often they were clicked, how many leads and sales came from those visits, etc. This lets them know how valuable the clicks are, and helps them decide how much they’re willing to pay for clicks.

Using a tool like AdWords, advertisers set their “bids” for keywords. Most engines won’t charge advertisers more than their bid, and may charge significantly less.

How engines decide what to charge

Engines like Google use an auction and their own algorithm in real time to decide which ads to serve, and in which order.

They try to determine not only who’s willing to bid the most, but also whose ad is most likely to get clicked.

Remember, Google makes no money if the ad is not clicked, so they want to serve the best ads. 1st position goes to the best ad that’s likely to get clicked, not just the highest bid. The top ad may actually cost than other ads if the click-through-rate is strong.