Search Engine Simplicity or Marketing Complexity?
Search engines enable anyone with internet access and a computer to access tremendous amounts of information by simply indicating what they are interested in learning more about. Take a step back and think about how simple this is. Now think about how the content that you are provided with emerges before your eyes. Don’t know? The irony is that search engine marketing is far more complex than we ever care to think about.
Search Engine Marketing – The Basics
Companies spend a tremendous amount of effort and often a boatload of cash to gain that first spot on your Google search. To do this they analyze things like SEO, CPM, CPC and CTR for the purpose of coming up with SEM strategies that bring you their site first.
These acronyms aren’t as complicated as they seem, but understanding industry jargon is essential to knowing why companies put in so much effort for your attention. A full glossary of search engine marketing terms can be found on Search Engine Watch , but here’s the lowdown on the most important terms that are important for you to know getting started:
Search Engine Marketing (SEM): Marketing efforts meant to improve a sites position in search engine results using SEO and/or paid advertising.
Search Engine Optimization (SEO): Efforts to create content and use key words or phrases that are easily found by search engines and help boost a pages ranking in search results (which is based on what an algorithm deems important).
Click Through Rate (CTR): The percentage of people that click on an ad, calculated by dividing the total number of clicks by the total number of ad impressions (how many people see it).
Cost per Click (CPC): The amount an advertiser pays search engines when someone clicks on their ad (note this varies depending on the keywords or phrases).
Cost per Thousand (CPM): An ad model that charges advertisers every time an ad is displayed to a user, whether the user clicks on the ad or not. The fee is based on every 1,000 ad impressions (M is the Roman numeral for 1,000). Most display ads, such as banner ads, are sold by CPM.
The Payoff for Companies – Dominating Keywords, Getting Cash from AdWords
To illustrate why search engine marketing is important for companies, I asked my boss today to explain to me how the web site I am working for makes most of its revenues. Specifically I inquired about what search terms we target, what the significance of dominating keywords was in regards to our bottom line and what other advantages we were deriving. Our company doesn’t charge for it’s service, so the obvious benefit of having people pay for something does not apply.
He explained that by including keywords and more often phrases that were specific to our industry throughout the sites URL, content, links, etc. we had gained the advantage of being the first company listed for a broad industry. According this webinar, by Patrick Flynn, the first result listed on a Google search gets 42% of traffic, while the second result yields only 12% of potential traffic. Without being on the first page of a Google search a company will miss 90% to 98% of total traffic.
Revenues are related to the amount of traffic a site gets, because companies can get paid by selling ad space on their site – which is worth more when a company dominates specific keywords that an advertiser finds relevant to their target consumer. Most of my companies profits come from customers that actually click on these ads (costs per clicks) because this provides more of a benefit for the advertiser than impressions. The click through rate (CTR) is thus a good indicator of how much a site makes.
How SEM Strategies Improve Page Rankings
At the end of the day, the company I work for makes a decent chunk of change from the ads that they feature on their site. However, the future aspirations of the company are to expand the service futher within the industry they currently exist. The marketing and social media campaigns I have been working on are key to ensuring that there is content continuously being provided to our users, with the hope that they will link or reference our site as an industry expert. Through these efforts and the backlinks that exist, we have achieved a page ranking of 6 – very high in comparison to our competition. From this ranking my bosses hope to derive future value as the company expands to offer other services. This can occur because a new site that is linked to our existing one receives a bump in page ranking because it is endorsed and associated with an already highly ranked site.
Interesting to see how a top-ranking site on Google search can make money from the ads it posts on its site as a result. I wonder, do you make back the money spent in attaining this top-ranking position via these ads?
the beauty is that these companies aren’t spending money to achieve top ranking positions, they’re just creating relevant content with keywords and back links !