Overview
In my last post, I gave an overview on Website Conversion Rates and Search Engine Marketing.  Today, I will delve more deeply into Paid Search Advertising which is the most widely used channel for online marketing.

What is Paid Search Advertising?
When you search on Google, a set of links to web pages are returned.  The set of links at the right and towards the top of the page (with a light brownish background) where it says Sponsored Links, are really advertisements.  This form of Advertising is known as Paid Search Advertising (PSA).

What are the different websites that allow Paid Search Advertising?
Google now has close to 70% market share in Paid Search Advertising and this is in fact, Google’s biggest revenue generator by far.  In addition to Google, if you were to include Yahoo and Microsoft, you will have accounted for 95% of the total search volume.  In other words, when it comes to Paid Search Advertising, you should:

1. Start with Google
2. Add Yahoo and Microsoft over time
3. Limit yourselves to these “big three” knowing that you have captured 95% potential searchers

Why is Paid Search Advertising so Powerful?
There are a number of reasons why Paid Search Advertising can really generate leads and clients quickly for you:

1. Target precisely – you have complete control of the keywords which when searched on trigger your ad.  For instance, if you are a plumber in the Seattle area and are advertising using Paid Search, you can ensure that your ad appears only when someone searches on “plumbing services” and lives within, say, 12 miles from your business location.
2. Pay only per visitor – when a user searches on Google for a keyword that you have targeted for your business, this user will see your ad.  You don’t pay Google anything for this free impression.  If that user then decides to click your ad, the user will then land on a web page of your choosing within your website.  You only pay Google for this visitor.  Think about the absolute precision of that!  You are only paying when someone visits your website after they searched on a keyword that you specified, and clicked on your ad copy.
3. Start small with complete flexibility – on Google, there is a one time activation fee of $5.  After that, you have total control of your budget with no commitments.  You can stop & resume as you wish.  Typically on Google, your ads start appearing within 20 minutes of your decision to launch a campaign.
4. Collect data, track and continuously improve the ad campaigns – you can start collecting data as soon as you launch your campaigns.  For instance, if set up correctly, you can tell which of the many keywords you “bought” are leading to visitors and whether those visitors are becoming leads, or clients.  Such rich data can then be used to improve and optimize your campaign from a “cost per lead” or “cost per client” perspective.

How easy is it to get started with Paid Search Advertising?
All the major search engines make it very easy for small businesses to get started.  For instance, on Google, you simply have to sign on to their AdWords program.   Then, you provide the following information to Google:

• the keywords that you want to bid on
• how much are you willing to pay per visitor
• what is your daily budget
• which geographic area are you targeting
• what should your ad copy say
• what is the URL of the web page you want your visitors to land on when they click the ad copy
• what time of day do you want your ad to run

Then you are good to go.

In my next post, I’ll discuss some of the dynamics of Paid Search Advertising including the concepts of:

• max CPC (cost per click)
• quality score
• determinants of ad position and actual cost per click
• tradeoff between getting more visitors and paying more per visitor

I’ll also discuss how all this can be neatly linked together in an effort to maximize your profits and what that even means.

About Nadir Hussain, COO, Media Flint, Inc.
Nadir Hussain is an Internet Advertisement and Search Engine Marketing expert. He is both Google and Yahoo certified for their Internet Advertisement programs.  He teaches an Internet based Advertising class both at UC/Berkeley Extension and the Continuing Studies Program at Stanford University.  His education comprises of a Bachelor’s degree in Computer Science & Mathematics from UC/Santa Cruz,  a MSEE from Stanford University and an MBA from UC/Berkeley.

Tags: analytics, cost per lead, Internet Advertising, internet marketing, lead generation, online advertising, online marketing, paid search advertising, Search Engine Marketing, targeted keywords, tracking data, website conversion rates