The Components and Impact of Sponsored Search
Summary (2 min read)
Search engines
- Sponsored search provides the revenue stream to support the massive and expensive infrastructure current search engines need to crawl billions of webpages, index these documents (including text, images, videos, newspapers, blogs, and audio files), accept millions of Web queries per day, and present billions of links per week.
- Without sponsored search, it is doubtful that the major search engines could finance anything close to their current infrastructures to provide these services.
consumers
- Consumers often use search engines to collect information and evaluate alternative products and services.
- Advertising helps inform and persuade potential customers about a particular brand, good, or service, but results have often been difficult to measure.
- Sponsored search also initially relied on impressions, but it quickly evolved into a more sophisticated model with multiple layers of measurement.
- One of the main advantages of CPC is that the advertiser can easily audit the number of clicks.
SponSored-Search technologieS
- The technologies underlying sponsored-search services are complex.
- Therefore, sponsored-search platforms provide mechanisms for businesses to develop ads and link them to query keywords that potential customers submit to the search engine.
- This isn't as simple as it sounds given that most Web queries are only one or two terms, and terms can have multiple derivations and meanings.
targeted ads
- Modern sponsored-search platforms provide means for advertisers to tailor their campaigns across myriad variations.
- These include keyword matching (broad, exact, phrase, or negative keywords), keyword generation that automatically produces possible alternate terms to trigger the ad, and dynamic ad creation that automatically creates ads targeted to specific queries.
- In addition to targeting ads based on user information searches, organizations can refine target campaigns based on traditional demographics.
- Sponsored-search platforms include search engine services-including currency conversion, flight time tracking, desktop searching, and language translation-that have rapidly become essential to many online consumers.
organizations
- Sponsored search is vital for many profit-and not-for-profit organizations to attract the interest of searchers and reach potential customers through online advertising.
- Sponsored search provides unique opportunities to SMEs at little to no increased transaction costs.
- Commonly used by mail-order companies, telemarketers, and catalogers, direct marketing targets individual customers to sell directly to them.
- Further, keyword advertising provides real-time results and lets direct marketers change advertisements immediately.
- To address the growing interest in sponsored search, the Direct Marketing Association now offers a Search Engine Marketing Certification (www.the-dma.org/seminars/ searchcertification) aimed at professionals in the industry.
impact of SponSored Search
- Search engine companies are also pushing into traditional advertising areas with innovations that link sponsored-search services to advertising in e-mail, magazines, newspapers, radio, telephony, and television.
- In GOMCHA, groups of about five students participate in a keywordadvertising competition that narrows down the initial number of teams to 10, including one global winner and three regional winners (Americas, Europe-Middle East-Africa, and Asia-Pacific).
S
- Ponsored search has dramatically influenced how people interact with the Web.
- It has funded the Web searching infra-content to searchers, and this includes ads.
- Therefore, most major sponsoredsearch platforms now rank an ad based on both the price that an advertiser will pay for it (the bid) and a relevance score based on the ad's CTR.
- Keyword-advertising platforms use historical data generated from multiple ad displays to calculate the relevance score.
- In reality, the advertiser also seeks to display relevant ads, as clicks by users who aren't potential customers incur a cost with little prospective benefit of a purchase.
management tools
- Finally, organizations have an array of management tools such as account organization software, A/B testing to automatically assess ad effectiveness, budget management tools to control advertising expenditures, and campaign analytics to gauge progress to campaign goals.
- These tools make it possible to manage and measure the effectiveness of advertising efforts in ways that were impossible prior to the advent of sponsored search.
- Most permit real-time campaign management for both reporting results and changing ads.
online auctions
- Organizations rarely have an ad market completely to themselves.
- Typically, multiple advertisers desire the same set of keywords.
- To determine whose ad is shown and where the ad appears on the search engine results page, sponsored-search platforms use online auctions in which advertisers bid on the key terms and phrases to appear in their ads.
- The more demand there is for a particular key term, the higher the prices for top placement on the results page.
- In a CPC model, the advertiser only pays when a potential customer clicks on an ad that the search engine displays.
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Citations
9 citations
Cites background from "The Components and Impact of Sponso..."
...Ability to manage keywords and bids: Selecting appropriate keyword is a critical and challenging decision in paid search industry and involves many considerations (Rashtchy et al. 2007; Laffey 2007; Jansen et al. 2009; Porter 2007)....
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...…the findings in Table 1, we introduce the following hypotheses: i. Ability to manage keywords and bids: Selecting appropriate keyword is a critical and challenging decision in paid search industry and involves many considerations (Rashtchy et al. 2007; Laffey 2007; Jansen et al. 2009; Porter 2007)....
[...]
...Without SEA, it is unlikely that search engines would be able to finance anything close to their infrastructure to support the massive and extensive infrastructure that they need to be able to provide a free search service to users (Jansen et al. 2009)....
[...]
7 citations
Cites background from "The Components and Impact of Sponso..."
...Without sponsored search, it is unlikely that search engines could finance anything close to their infrastructure to support this free service to web users (Jansen et al., 2009a)....
[...]
...The technology underlying sponsoredsearch platforms—including online auctions, geotargeting, and keyword volume prediction—is extremely complex (Jansen et al., 2009a)....
[...]
7 citations
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References
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