1/4/2019

Digital Marketing: Session 2

Search Engine Marketing

(Paid Search/ PPC Marketing)

By Atanu Ghosh
Founder and CEO, Bluebeaks Solutions and Salt n Soap

Search Marketing

Search Marketing is one of various digital marketing

techniques that enable a product or service a company
intends to market to appear in search results page of a search
engine (e.g. Google or Bing) when a surfer is searching for
the particular product on service on the internet.

Note:
1. Search Marketing can be paid or earned
2. Search Marketing is sometimes used interchangeably with Search Engine
Marketing (SEM). In some cases SEM is used to specifically mean Paid
Search Marketing, alternatively also called PPC/ CPC Marketing

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Understanding Search Results

Search Term

Google
Shopping Ads

Paid Search
Ads
Organic
Search Results

There can be at most 7 ads for commercial search terms in one page, 4 on top and 3
at the bottom. For non-commercial search terms there can be at most 6 search ads.
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Understanding Search Results

These are Google “Local Listings” implemented through Google My Business.

This can be organic or paid. In the example above, the results are all organic

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Understanding Search Results

Data Highlighter

Google Knowledge Graph

SEO and SEM in Context of Digital

Marketing Spectrum
Paid

SEM Display,
Paid Paid
Listing Social

Inbound Outbound

SEO Social
Organic
Free Social
Listing Shares

Earned/ Owned
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SEM Coverage in this Course

1.TROM

2. SEM Using Google Ads

3. SEM Strategy

4. SEM Planning and Budgeting

5. Some Advanced Features of Google Ads

TROM

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TROM

Real Time
Targeting
Bidding (RTB)

Measurement
Outcome
of Outcome in
Based Pricing
Real Time

TROM is a cardinal principle of SEM

Targeting

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Contextual Targeting in SEM

Contextual Targeting: Targeting an audience, not always,

but only in context of some specific event or action of the
audience.

In case of SEM this event or action is the user searching for

a particular product or service she is interested in at that
instance.

The trigger of such Contextual Targeting in SEM are

the Search Terms used by the user.

Contextual Targeting is one of the most powerful features

of Digital Marketing in general and SEM in particular.

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Search Terms and Keywords in Search Ads

Search Term = What Search Ad Keyword = The words for

the user types in the which the advertiser wants Google to
search bar of search contextually target her ad when a user
engine searches in the search engine.

Search Term is the input of the user to Google on what she is searching for.

Search Ad Keyword is the input of the advertiser to Google on the user

searches for which the advertiser wants his ad to be shown.
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Search Terms and Keywords in Search Ads

Search Term = What Search Ad Keyword = The words for

the user types in the which the advertiser wants Google to
search bar of search contextually target her ad when a user
engine searches in the search engine.

It might appear that Search Term and Search Ad Keyword are same

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Search Terms and Keywords in Search Ads

Search Term = What Search Ad Keyword = The words for

the user types in the which the advertiser wants Google to
search bar of search contextually target her ad when a user
engine searches in the search engine.

But they are not!

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Why Search Terms and Keywords are Different

Use Case: You are a seller of different varieties of shoes.

You want your ad to show up in Google Search results
when a surfer in Google is searching for shoes.

Question: Can you think of the different “search terms” a

surfer is likely to use in Google Search bar when she is
searching for or about shoes?

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Search Terms
Search Terms
shoes
buy shoes
buy shoes online
shoe store
buy footwear
buy ladies footwear
buy sports shoes
where can I buy designer shoes
job in a shoe company
where can I get my shoes repaired?
I want to buy shoes with green sole and red lace

This is a very small sample of what surfers can search in a Search Engine like
Google when they are searching for shoes. What are some “characteristics” of
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Search Terms - Characteristics

1. There can be innumerable terms with which people may search for shoes
in Search Engine. It is impossible to list down all of these seemingly
infinite number of ways a surfer searches for a product or service in
Search Engines like Google.

2. There can be many synonyms or semantically similar words as the search

term (e.g. shoes and footwear)

3. Search terms can range from very generic (e.g. “shoes”) to specific (“I
want to buy shoes with green sole and red lace”)

4. There can be search terms against which you do not want your product or
service to appear because your product or service is not about what
people have specifically searched for (e.g. “job in a shoe company” or
“where can I get my shoes repaired?”)

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Search Terms and Keywords

Thus, an Advertiser cannot provide a comprehensive list of

desired Search Terms to the Search Engine.

Instead, she provides only a small set of words or phrases

to the Search Engine.

The Search Engine is expected to show the advertiser’s ad

when a searcher is searching in the search engine using
search terms that are around or similar to the small set of
words or phrases provided by the advertiser.

This small set of words of phrases provided by the

Advertiser are called Search Ad Keywords.
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Search Terms and Keywords

Keywords

Search Terms

By providing a small set of words or phrases the advertiser is able

to cover a wide range of words or phrases used by the users to
search for the product or service she is offering.

But there is a challenge in this method. What is that?

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Search Terms and Keywords

Keywords

Search Terms

How much will the advertiser allow the Search Engine to “stray”
away from the specified keywords?

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Balancing Reach and Accuracy

Search Engines provide “Rules” which can be set by the advertiser

that helps the search engine to balance Reach and Accuracy of the
search ad.

Factors that influences this balance will be discussed in Search

Marketing Strategy section.

In Google some of these “rules” are called Match Types, Negative

Match and Long Tail Keywords.
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Keyword Match Types

Match Type Syntax

Broad Match buy shoes
Broad Match Modifier +buy +shoes
Phrase Match “buy shoes”
Exact Match [buy shoes]
Negative Match -job

Keyword “buy shoes” rendered through various Match Types.

Keyword “jobs” used as Negative Keyword

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Search Terms and Match Types

Search Terms Broad Broad Match Phrase Exact Negative Match
Match Modifier Match Match (“job”)
shoes Yes No No No No impact

buy shoes Yes Yes Yes Yes No impact

buy shoes online Yes Yes Yes No No impact

shoe store Yes No No No No impact

buy footwear Yes Yes Yes Yes No impact

buy ladies footwear Yes Yes No No No impact

buy sports shoes Yes Yes No No No impact

where can I buy designer shoes Yes Yes No No No impact

job in a shoe company Yes No No No No

where can I get my shoes Yes No No No No impact

repaired?
I want to buy shoes with green Yes Yes Yes No No impact
sole and red lace
Example of how the search terms against which an advertiser’s ad will be or not be shown
depends on match type. The keyword taken is buy shoes and the negative keyword taken is job.
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Search Terms, Keywords and Match Types

Keywords

Search Terms

Exact Match

Phrase Match

Broad Match Modifier

Broad Match
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Search Terms, Keywords and Match Types

Keywords
Desired and
Not Desired but Delivered
Delivered (Waste)

Search Terms

Desired but not

Exact Match Delivered
Accuracy
Phrase Match

Broad Match Modifier

Reach, Waste
Broad Match
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Addressing the Long Tail in SEM

Chris Anderson’s Long Tail

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Long Tail Keywords

1. Long Tail Keywords are usually keywords with many and descriptive
terms that are used by few people but there may be many such
people using many such similar long tail keywords.

2. Example: “shoes with green sole and red lace” or “2 bhk ready-to-
move apartment in Juhu Mumbai”

3. Long tail keywords are usually used when

• You want to promote a specific product or service.
• Your marketing objective is that of achieving a very high
accuracy.
• You are competing with larger brands having a much higher
budget and you want to focus on specific products or services
that are your USP.

4. By using long tail keywords you can derive a high return on your ad
spend (due to high Accuracy that minimise “waste”) but you heavily
compromise on Reach.
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Real Time Bidding

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What is Real Time Bidding

1. In traditional media, media space and time is purchased through

negotiations done by humans representing the advertiser and/or agency
and publisher.
2. In Programmatic Buying negotiations are done by algorithms.
3. RTB is one type of Programmatic Buying used in Search Ads.
4. In RTB every bidder specifies the maximum amount he is willing to pay for
a click on his ad. Method of fixing the bid amount can be
• Manual – Fixed manually by the advertiser, Static (does not change
with every search instance, changes only when the advertiser changes
the bid price manually)
• Automatic – Fixed algorithmically by Search Engine, Dynamic (changes
for every search instance). The algorithm attempts to maximise the
objective set by the advertiser
5. A bidder is pitted against competing bidders. Competing bidders are
those whose ad qualifies to be shown for the search term provided by the
user. Qualification depends on target set by advertisers including keywords
and match types used by advertisers.
6. Ad position is determined by bid price but advertise pays only when a user
clicks on the ad. Hence such ads are called PPC (Pay per Click) ads.
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Real Time Bidding - Example

This is my keyword search …

Which bidder is going to get which position?

Assumption – Top most position will be allotted to the winner as the

visibility and CTR (Click through Rate) is highest for topmost position 30

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Second Price Auction

Bidder Bid Ad Position Actual CPC

A Rs. 100 1 Rs. 81
B Rs. 80 2 Rs. 51
C Rs. 50 3 Rs. 31
D Rs. 30 Eliminated NA

Second Price Auction is based on Vickrey-Clarke-

Groves (VCG) auction mechanism
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Quality Score

1. Most Search Engines do not rank ads based only on willingness to pay (bid price).
Quality of the ad also plays an important role.

• Note: This is a significant shift from the way ad placements are sold in traditional
media where willingness to pay is the primary determining factor. A newspaper
will not reduce the ad price if the advertiser’s creative is path breaking.

2. Quality of Ad is determined by various factors. Google considers 3 primary factors

• Expected CTR (Click Through Rate)

• Landing Page Experience
• Ad Relevance

3. Quality score is a general static estimate based on past data. It can be null if no past
data is available. Q-score may differ for Auction-Time Ad Quality (ATAQ) which is
used in calculating Ad Rank. Auction time ad quality takes multiple inputs including
keywords, targeting, competitor’s ad, time of ad delivery, device of ad delivery, etc.
Quality score is expected to provide only an estimate to the advertiser as to how his
ad will fair in auction time ad quality and is not the auction time ad quality.

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CTR and Expected CTR

CTR (Click through Rate) = Clicks/ Impressions

Viewable CTR = Clicks/ Viewable Impressions

Expected CTR = Predicted CTR based on

assumption that search term will match keyword
exactly and considering historical CTR across all
accounts for the same keyword

Can CTR be > 100%?

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Landing Page Experience

Landing Page is the page a user is directed to when

he clicks on the ad.

Note: Landing Page is not necessarily (and is usually

not) the Home Page of the website

Google provides a high score on Landing Page

Experience on factors like whether keywords are
appearing prominently in the landing page,
readability of the landing page, loading time of the
landing page, etc.

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Ad Relevance

Ad Relevance depends on the semantic similarity

between the keywords and ad copy (content)

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Bid Price, Quality Score and Ad Rank

Ad Position is determined by Ad Rank

Ad Rank = Bid Price * Quality Score

(Simplified calculation)

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RTB Considering Q-Score and Ad Rank

Bidder Bid Q-Score Ad Rank Ad Position Actual CPC

A Rs. 100 1 100 Eliminated NA

B Rs. 80 5 400 1 Rs. 61
C Rs. 50 6 300 2 Rs. 46
D Rs. 30 9 270 3 Rs. 12

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RTB Considering Q-Score and Ad Rank

In Search Engines like Google calculation of Ad Rank is far more complex

than the simplified example provided here.

Google considers Auction Time Ad Quality that is calculated dynamically at

every search instance rather than static historical Quality Score depicted here.

Besides, it considers a variety of other factor like targeting, semantic

alignment of search term with keyword, user signals and attributes, ad
extensions, etc.

Ad Position is relative to other advertiser. The actual position in SERP

(Search Engine Results Page) depends on any threshold value on Ad Rank
that Google may apply. For example, if Google applies a threshold value of 300
for “top of the page” impression D’s ad will not be shown on top of the organic
search results even if there are technically 4 available slots for ads on top of the
page. Instead it will be shown in bottom of the page.

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Average Cost per Click

Bidder Bid Q-Score Ad Rank Ad Position Actual CPC

A Rs. 100 1 100 Eliminated NA

B Rs. 80 5 400 1 Rs. 61
C Rs. 50 6 300 2 Rs. 46
D Rs. 30 9 270 3 Rs. 12

For a specific keyword, Actual CPC may vary for every click even if
Bid Price and Quality Score do not change.

SEM Analytics provides the Average Cost per Click (Average CPC)
for the desired period.

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Average Cost per Click

Bidder Bid Q-Score Ad Rank Ad Position Actual CPC

A Rs. 100 1 100 Eliminated NA

B Rs. 80 5 400 1 Rs. 61
C Rs. 50 6 300 2 Rs. 46
D Rs. 30 9 270 3 Rs. 12

All 4 Bidders A, B, C and D bid on keywords buy shoes but with

different match types

A bids for broad match, B for broad match modifier, C for phrase
match and D for exact match.

Let us see how the Average CPC varies for different use cases of
search terms used.
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Average Cost per Click

Use Case 1: Search Term buy shoes

Bidder Bid Q-Score Ad Rank In Ad Position Actual CPC
Competition
A Rs. 100 1 100 Yes Eliminated NA

B Rs. 80 5 400 Yes 1 Rs. 61

C Rs. 50 6 300 Yes 2 Rs. 46

D Rs. 30 9 270 Yes 3 Rs. 12

Use Case 2: Search Term buy shoes online

Bidder Bid Q-Score Ad Rank In Ad Position Actual CPC
Competition
A Rs. 100 1 100 Yes 3 Rs. 100

B Rs. 80 5 400 Yes 1 Rs. 61

C Rs. 50 6 300 Yes 2 Rs. 17

D Rs. 30 9 270 No Non participant NA

Average CPC: For A, Rs. 100; B Rs. 61, C Rs. 31.50 and D Rs. 12
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Outcome Based Pricing

• Outcome is an action of a user on the ad (e.g. a click, a view) or

attributed to the ad, immediately (e.g. clicking on an ad, visiting
the landing page and downloading a brochure) or after a specified
period of time (e.g. clicking on an ad, visiting the landing page and
then coming back to the landing page after 7 days and downloading
the brochure)

• In Outcome Based Pricing the advertiser pays when an outcome is

reached. However, advertiser has to choose the outcome for which
he will pay only among the options provided by the ad serving
platform. Available options depend on campaign type and bid
strategy.

• In Google Search Ads the only outcome for which advertisers

are charged are clicks. Hence these ads are called PPC (Pay per
Click) ads.

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Measurement of Outcome in Real Time

• Outcomes are measured and reported on real time.

• Most Ad Serving Platforms provide extensive Analytics providing

measurement of outcome

• Outcome does not mean a sale/ purchase. It is any user action on

the ad or attributed to the ad.

• An Outcome is not necessarily a Conversion. Conversion which is

an action of a user (online or offline) attributable to an ad and that
has a business value to the advertiser.

• Thus all Conversions are Outcomes but all Outcomes are not
Conversions.

• Some (not all) Conversions can be measured in real time and

attributed to outcome.
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Thank You

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