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Digital Marketing: Search Engines

Introduction

The recent advancements in Information and Communication Technology (ICT) have revolutionized how people interact with one another. In particular, the invention of the Internet has made the world a global village because many companies are expanding their operations globally through e-commerce (Stone & Woodcock 2014). For example, giant search engines such as Google and social media platforms like Facebook, Twitter, and YouTube, have made businesses succeed due to instant feedback from clients as well as from prospective customers.

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Over the years, the number of people with access to the Internet has grown steadily, indicating greater prospects for organizations that have embraced online trade. Multinational e-commerce leaders like Amazon, e-Bay, and Walmart are well established in the sector, and any new entrants have to employ appropriate marketing techniques that can help them become competitive in an already crowded industry (Stone & Woodcock 2014). Essentially, one of the modern marketing techniques which are in tandem with the current online technology is digital marketing.

Digital marketing, also known as e-marketing, involves the use of online platforms to advertise products and services to prospective buyers surfing the Internet (Kannan 2017). Many organizations use social media and custom-made websites to sell their goods and services to the online community. Since a significant number of potential online customers subscribe to these platforms, many retailers use them as marketing channels (Kannan 2017). As such, digital marketing relies, to a great extent, on the availability of the Internet and the possession of devices that can access the Internet such as computers and smartphones.

There are different forms of digital marketing such as inbound marketing, content marketing, social media marketing, email marketing, and search engine marketing. Inbound marketing involves creating content that attracts the attention of potential online customers (Kannan 2017). Qualified customers visit the website and by doing so inform Google about the site’s popularity. This implies that, unlike outbound marketing which concentrates on what the marketer wants the consumer to see, inbound marketing is more customer-centric and advertises what the consumers desire (Kannan 2017). This paper focuses on search engine marketing as an important method of digital marketing drawing examples from the Simbound simulation game.

Search Engine Marketing

Search Engine Marketing (SEM) is the process of obtaining traffic and visibility in online search engines such as Google and Yahoo using free and paid ads. Principally, SEM revolves around the maximization of brand presence and conversions. The implication here is that potential customers are attracted to the website (Yang, Shi & Wang 2015). Once they click an ad, they can access information about a product that is being advertised and may end up purchasing the product via the company’s online platform.

To get a broader insight into Search Engine Advertising, it is imperative to understand paid and unpaid search marketing. Paid search ads aid marketing practitioners to obtain more presence and visibility in online platforms at a faster rate (Yang, Shi & Wang 2015). As such, SEM is one of the most effective techniques that marketers use for online advertising campaigns and for drawing in new customers (Yang, Shi & Wang 2015). Given that SEM helps potential customers to get the specific information they are looking for, retailers and businesses pay search engines to display their ads to prospective customers.

Like any other form of digital or non-digital marketing, SEM depends on various factors that can either make it effective or otherwise ineffective. To begin with, before rolling out the digital marketing campaign, there is a need for a clear understanding of the target audience. Studies have progressively indicated that most users of the main online platforms are youth (Yang, Shi & Wang 2015).

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The implication here is that the product being advertised must be marketable to the young generation. At the same time, the website they are directed to must be appealing as youth tend to lose focus easily (Yang, Shi & Wang 2015). Therefore, not all products will be marketed successfully via search engines. It is prudent to note that marketers are responsible for ensuring that all paid ads are meant for easy moving goods that can yield returns on investment.

The second factor that marketers need to consider when dealing with digital marketing is the purpose of the advertisement. Some ad campaigns are primarily for brand development through increased exposure. This is particularly true for companies that do not engage in online marketing. Conversely, some businesses may aim for a direct response from search engines, leading to an increase in sales (Yang, Shi & Wang 2015). This premise suggests that knowing the aim of the advertisement helps marketing practitioners employ a strategy that guarantees Return on Investment (ROI). Thirdly, the marketers need to select the right keywords and arrange them according to the target campaigns and ad groups.

SEM Analytics and Related Terms

Keywords

A keyword is a phrase keyed into a search engine by the user with the expectation of getting the most suitable results (Search engine marketing 2019). The search engine then displays results related to the keyword alongside similar ads as well. For instance, in the Simbound digital marketing simulation game, the top 5 keywords that yielded more conversions include Asus tablet (334), Lenovo tablet (94), mid-Android tablet (8), Coby Android tablet (3), and Samsung Galaxy tablet (2).

Conversions

In digital SEM, conversion refers to the achievement of the objective of an advertisement. Simbound indicates a total of 444 conversions for all the ads (Search engine marketing 2019). In this case, the users of the search engine not only click on the ads but also develop an interest in the product(s) being marketed and proceed to the purchasing process. This is the ultimate objective of the marketer. As such, the more conversions there are for a particular ad, the more profit is made. For instance, the sale of Asus tablets in the UK market recorded the highest number of conversions (more than 334). This suggests that more people purchased the Asus product in the UK than any other product.

Impressions

This is how frequently the advertisement appears in the search engine. The results of Simbound indicate that there were a total of 109,669 impressions for all the ads in the search engine (Search engine marketing 2019).

Click-through rate

The term refers to the number of conversions made per 100 impressions. It is an important metric in SEM that is expressed as a percentage. The CTR for all the impressions in the game is 3% (Search engine marketing 2019).

Cost

The term refers to the amount of money earned from the ads vis-à-vis the amount of money spent on them. According to Simbound, for example, a total of €2,407 was spent on these advertisements. In return, this investment yielded a profit of €7,186 (Search engine marketing 2019). This indicates that the advertising expenses incurred by companies such as Samsung were paid back as the company had a good return on investment (ROI).

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Current Practices

Different marketers employ different techniques in digital advertising. The method used relies on the company’s marketing objectives. For example, SEM allows marketers to place bids on keywords and phrases, thereby, allowing their ads to appear alongside the primary search results in a search engine such as Google. Thus, a marketer would ideally pay for an advertisement depending on the number of clicks made on their websites.

Marketing practitioners incorporate SEM in their product mix because it is easy to create an SEM account and it yields traffic easily. Although the strategies used by Google to rank websites in its search engines remain guarded by the company (Google), studies have continuously shown that search engines prioritize organic results depending on several keywords that correspond to the words and phrases entered in the search engine (Gudivada, Rao & Paris 2015). Paid advertisements that relate to the keywords entered in the search engine appear alongside the organic results.

As a matter of principle, Google ranks advertisers based on two conditions – the bid price and the click-through rate. Accordingly, individuals or/and firms that offer high bid prices are highly ranked, and their ads take precedent over those that give low-priced bids (Yang, Shi & Wang 2015). Keyword research is often carried out by SEO professionals to establish alternative words that people consider to be related to the topic being searched.

Marketers then place bids on such words for use in their advertising. In this regard, ads that obtain a high click-through rate become highly ranked. Google influences its users to click on ads by placing a particular ad in small boxes that attract their attention.

Competition in SEM

The use of keywords is becoming common as more companies continue to embrace it due to its simplicity and ability to quickly reach the target market compared to other methods such as email marketing that may take a longer time to receive feedback. Moreover, stiff competition among the top search engine companies such as Google, Yahoo, and Microsoft MSN is making it more difficult to improve the quality of services given to advertisers.

These companies are also coming up with creative ways of offering quality services marketers prefer. For example, to stage a more aggressive competitive challenge to Google, Microsoft invested in the development of its MSN search engine at a cost of $100 million (Yang, Shi & Wang 2015). The management of the company declared that this was a game-changer in the industry and that giant rival companies such as Google would lag if they did not invest in their search engines.

Furthermore, the increased competition in search engine marketing has made it almost impossible for advertisers with narrow budgets to edge into the market in a way that they would intend. For a long time, an organization’s success in digital marketing has been used by experts as a key performance indicator (KPI). Even so, the initial notion that website traffic is related to the ranking of an ad is becoming more far-fetched than it has ever been (Yang, Shi & Wang 2015).

Studies have shown that being the third in rank may be less expensive than being on the top. However, this is no guarantee that top positions will lead to high traffic. For instance, an advertisement in the third position may cost 10% less, but receive only 30% less traffic than the one in the first position (Yang, Shi & Wang 2015). Even though the phrase “Samsung Galaxy tablet” appeared at an average position of 7.7 in Simbound, it managed 2 conversions compared to the phrase “Asus tablet Android” which appeared on average at position 1.8 but had 0 conversions (Search engine marketing 2019). As a result, experts advise marketers to assess whether the increase in traffic corresponds to their ROI.

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To underscore the high level of competition present in the SEM industry, studies suggest that new companies or businesses have to set aside a large advertising budget to compete freely with those already in the field. This means that for a new firm to obtain traffic it should be able to place higher bids for more words that are searched by most users. Due to the high risk of financial investment involved, experts suggest that new businesses must undertake competitor research to get insight into the strengths and weaknesses of similar companies that are already using SEM. Having such information enables the marketing firm to leverage the weaknesses of its rivals and attain a competitive advantage. Nevertheless, this has proven to be an uphill task as many of the top positions are held by established firms.

Search Engine Optimization (SEO)

SEO has everything to do with ensuring that the advertising firm remains on top in terms of traffic, as used in ranking websites (Gudivada, Rao & Paris 2015). A marketer that optimizes his or her search engine ensures that a significant number of online users can access his or her website. This helps to alleviate the risk of incurring advertising losses.

Several factors are considered when looking into the optimization of a search engine. First, the use of the relevant keywords for the domain to indicate the title and description of the business should be taken into account (Baye, De Los Santos & Wildenbeest 2016). This premise implies that the product mix of a company plays an important role in determining the most suitable keywords to be used in SEM. In this case, experts contend that the least competitive keywords and phrases work effectively in increasing the rank of the ad, hence, the traffic obtained. Secondly, user experience indicates a website’s relevance and ease of use.

A high bounce rate on websites can be due to negative feedback from the users of the search engine. It is also important to note that the time spent on a website plays a critical role in the optimization of a search engine (Gudivada, Rao & Paris 2015). A page will become more visible and rank highly when a user spends more time on it before scrolling to other pages. At the same time, the information in the ad needs to be as cohesive and informative to attract the user. Websites that provide a lot of unnecessary information may not perform well in the ranks.

Another important factor to consider is the speed of the website. Sites that take long to load will lose potential consumers and also get negative feedback. This would, in turn, ensure that the site is ranked poorly. Baye, De Los Santos, and Wildenbeest (2016) argue that a single second delay in information processing can lead to a traffic decline of 7%. For ads that are designed to appear offline, creating backlinks and social signals can ensure the proper and higher ranking of the website. Backlinks should always be from trustworthy websites that users can trust. Such links help to create the traffic that is needed for the high ranking of the ad.

Paid Per Click (PPC)

PPC is an important part of SEM, which requires advertisers to pay for every click made on their ads in search engines. PPC is predominantly provided by Google. The first organic results to appear when keywords are entered in the search engine are often ads whose titles and descriptions have some similarities (Hu, Shin & Tang 2015). It is an effective technique of charging for advertisement services because the number of clicks and the duration of visits can easily be tracked using methods such as Google Analytics. Moreover, advertising companies have the freedom to decide the priority of their advertisements depending on their budgets.

In general, the higher the number of clicks, the higher the number of conversions that are likely to be recorded. Most companies carry out landing page optimization to improve the quality of their websites and increase conversions (Hu, Shin & Tang 2015). For example, the campaign made by Asus Company on its tablets in the UK market attracted the greatest number of clicks (1,119). This can be attributed to the high number of conversions made for the company’s products in the advertisement thanks to an investment in the optimization of the company’s website. Although the company incurred a high advertising expense due to a large number of clicks, the ROI also increased substantially as a result of high traffic on its website.

Challenges Facing Search Engine Marketing

Even though SEM has been used for more than 10 years now, accounting for more than 33% of all online spending on advertisements, there are several challenges that the industry still faces. The main challenge is the stiff competition for top positions in search engines. Normally, top positions are held by multinational companies with enormous financial capabilities. Small companies are compelled to go for cheaper second-tier search engines that can place them in better positions and yield significant returns (Yang, Shi & Wang 2015). Therefore, these low-cost second-tier search engines are prone to click fraud that can be difficult to detect.

Researchers have found out that click fraud exists in two forms: competitor fraud and affiliate fraud. Competitor fraud takes place when a competing company sponsors programs that continuously click on rivals’ ads to exhaust their daily ad budgets (Yang, Shi & Wang 2015). On the other hand, affiliate fraud is one in which affiliate companies use programs that click on their ads to cause more traffic and increase their compensation (Yang, Shi & Wang 2015). As a result of this, marketers are likely to note a difference between the number of clicks they paid for and the number of clicks recorded by the search engine through the low traffic to the website.

Conclusion and Recommendations

There is no doubt that digital advertising has revolutionized how advertisements are being undertaken by many organizations. One can project that digital marketing and SEM, in particular, will grow in demand due to the increased access to the Internet by the global community. Many companies have realized that there is a steady increase in the online community, implying that the online market is getting more lucrative.

SEM is advantageous to both marketers and consumers. Marketers can control their spending on this form of advertisement by deciding the maximum number of clicks per day that can go in line with their ad budgets. On the other hand, the benefits enjoyed by online consumers are a matter of convenience as they can get information about a given product by a single click on the ad. Moreover, users can be guaranteed accurate results due to the use of keywords in the search engine.

It is important to note that Search Engine Advertising is not perfect. There is unhealthy competition among players in the industry. Big companies have outdone their small counterparts in terms of creating traffic and placing high bids for ads. Therefore, there is a need for measures that can help in controlling this problem. This paper recommends that search engine companies such as Google seek ads in terms of user preferences such as location, levels of income, and family size. This will not only help small companies to do business freely but also online consumers to access ads that suit their interests best.

Search engine companies that provide advertising services should keenly address the challenges created by click fraud. Addressing them can go a long way in ensuring that there is fair competition among search engine marketers. The best solution is for Google, Yahoo, and Microsoft MSN among others to install sophisticated software systems that can trail the location of clicks. Overall, SEM remains one of the most effective forms of digital marketing that is interactive.

Reference List

Baye, MR, De los Santos, B & Wildenbeest, MR 2016, ‘Search engine optimization: what drives organic traffic to retail sites?’, Journal of Economics & Management Strategy, vol. 25, no. 1, pp. 6-31.

Gudivada, VN, Rao, D & Paris, J 2015, ‘Understanding search-engine optimization’, Computer, vol. 48, no. 10, pp. 43-52.

Hu, Y, Shin, J & Tang, Z 2015, ‘Incentive problems in performance-based online advertising pricing: cost per click vs. cost per action’, Management Science, vol. 62, no. 7, pp. 2022-2038.

Kannan, PK 2017, ‘Digital marketing: a framework, review and research agenda’, International Journal of Research in Marketing, vol. 34, no. 1, pp. 22-45.

Search engine marketing. 2019. Web.

Stone, MD & Woodcock, ND 2014, ‘Interactive, direct and digital marketing: a future that depends on better use of business intelligence’, Journal of Research in Interactive Marketing, vol. 8, no. 1, pp. 4-17.

Yang, Z, Shi, Y & Wang, B 2015, ‘Search engine marketing, financing ability and firm performance in E-commerce’, Procedia Computer Science, vol. 55, pp. 1106-1112.

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StudyCorgi. (2020, December 15). Digital Marketing: Search Engines. Retrieved from https://studycorgi.com/digital-marketing-search-engines/

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StudyCorgi. "Digital Marketing: Search Engines." December 15, 2020. https://studycorgi.com/digital-marketing-search-engines/.

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StudyCorgi. 2020. "Digital Marketing: Search Engines." December 15, 2020. https://studycorgi.com/digital-marketing-search-engines/.

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