Search Star An Introduction to Pay Per Click

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1 Search Star An Introduction to Pay Per Click 9 th September 2005

2 About Us Search Star Ltd was established in July 2005 & is based in Bath Experience in advertising, media & direct marketing since 1992 & in digital media since 2000 Specialists in digital media & search advertising Task based pricing with no hidden commission

3 Our Ethos Give someone a fish & you feed them for a day Teach them to fish you feed them for life

4 All consumer demographics are using the internet & search engines in increasing numbers & increasing enthusiasm

5 Search Engine Promotion With increasing consumer reliance search engines should be the cornerstone of most web strategies There are 3 main components to SEP: Search Engine Optimisation (SEO) Directories Pay Per Click Advertising (PPC)

6 Search Engine Optimisation (SEO) Fundamental basis for most online presences Essential for long term strategy Website optimisation requires design for indexing and ranking Imprecise control relies on spiders for indexing Labour intensive limited keywords Slow turn around time results in weeks & more often months

7 Static listings Directories Essential for long term strategy Paid or Free Can improve traditional search engine ranking Limited scope in terms of keyword coverage no lateral thinking Lack of flexibility

8 Pay Per Click (PPC) Performance based pricing Charged on a per clickthrough basis High control and top rankings for competitive search terms Broad & lateral keyword coverage possible Great flexibility & fast turnaround 100% accountable with the right tracking in place

9 What is Pay Per Click (PPC)? Pay per click, or PPC, is an advertising technique used on websites, especially search engines. Pay per click advertisements are usually text ads placed near search results; when a site visitor clicks on the advertisement, the advertiser is charged a small amount. Pay per click is also sometimes known as Cost per Click (CPC). The most popular pay-per-click search engines are Google Adwords and Yahoo Search Marketing, formerly Overture Depending on the search engine, minimum prices per click start at 0.01 (up to 0.30). Very popular search terms can cost much more on popular engines. Source: Wikipedia 8 th Sept 05

10 Critics & Evangelists Critics PPC search results are not useful in finding information Evangelists the free market is effective in bringing the best results to the top. In theory the highest bids will be held by successful companies that are in a position to bid highly on their most targeted keywords

11 A Media Planner s Dream Ads reach users at the moment they demonstrate interest

12 Keyword Advertising Targeted advertising at point of demand - a media planners dream Better ROI for advertisers than other media in most cases How search engines monetize their technology & market dominance Why Google is valued at $44bn & is the most valuable media company in the world

13 A Typical AdWords Ad Ad Title (25 character limit) Ad Text (35 character limit per line) Display URL (35 character limit)

14 Google Ad Distribution The Google Network consists of Google sites & partner properties that use Google AdSense to serve AdWords ads These properties include: Search sites, content pages, newsletters, services & discussion boards The Google Network reaches over 80% of Internet Users worldwide* Google properties, including: Search ad partners, including: Content publishers, including: * Source: comscore Media Metrix (September, 2004)

15 Google Network: AOL Example Search query: designer menswear Four AdWords ads under the title Sponsored Links

16 Adsense Content Distribution Google technology places your ad on the most relevant content pages

17 Yahoo Search Marketing Yahoo bought & renamed Overture in 2004 Sales house for Yahoo, MSN, Lycos, Alta Vista, BT, Wanadoo & Ask Jeeves

18 MIVA (Espotting) Thomson Local Mirago Other UK Suppliers

19 Location & Language Targeting

20 The Cost Benefit of PPC Low minimum spend You choose your own maximum daily spending limit (daily budget) Choose how much you want to spend per click for every keyword Pay for users who click on your ad Conversion tracking = real-time ROI data ** U.S. Bancorp Piper Jaffray, New Methods in Search Marketing: Contextual Advertising and Other Evolutions (Safa Rashtchy), June 2004

21 How Search PPC ROI Works 1,000 initial investment AdWords Increase revenue by reinvesting profit 1.00 CPC 1,000 clicks 10% conversion rate = 100 sales Average sale = 100 1K investment returns 10K in sales Reinvest profits, increase budget

22 Search Advertising is Far More Cost Effective Cost-per-lead across Various Direct Marketing Methods Search % Search Banner Ads 1.90 Direct Mail Ave. acquisition CPA vs. the online average of 50 * U.S. Bancorp Piper Jaffray, Equity Research, June 2004

23 Which is why search is driving the online ad boom % Online Advertising Revenue 100% 80% 6% 8% 9% Other Rich Media Sponsorships 60% 17% Classifieds Marketers are voting with their s. 40% 20% Banners Search is now the most dominant form of online advertising 20% 40% Search Nearly 3x growth in since start of % 73% search penetration Type of Online Media Source: Interactive Advertising Bureau, PricewaterhouseCoopers (September 2004); comscore (October 2004)

24 Get the variables right to maximise ROI Search Engine Selection Keywords Matching Options Bidding strategy Geo-demographics Days & Dayparts Adtext Landing Pages The Website! Minimise Cost & Maximise ROI

25 Search PPC Summary Reach Access to c.80% of Internet users worldwide Cost Low costs for high ROI Pay when users click on your ads Timing Ads are seen by users looking to purchase Reach your audience at the right time, with the right message Flexibility Start advertising quickly Unlimited changes, whenever you want You can target ads to the specific location & language of your customers

26 A Few Definitions

27 Definition: CPC Cost Per Click Click: The action a user takes to select your ad and be taken to your website. The advertiser is charged when a user clicks on their ad A sample AdWords ad The Destination Website

28 Definition: CTR Click Through Rate Impression: The appearance of your ad on Google or one of our partner sites Clicks Impressions = CTR (expressed as %)

29 CTR Examples CTR is how Google measures relevance Example Advertiser A: 20 clicks 1000 impressions = 0.02 = 2% Example Advertiser B: 3 clicks 100 impressions = 0.03 = 3%

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