mobile logo
May 15, 2015

Search Engine Marketing (SEM) – Traction Channel #4

by StartupRunner

Search Engine Marketing (SEM) refers to placing advertisements on search engines like Google, where online marketers spend over $100 million each day on Google’s AdWords platform. Paid search advertising (also known as pay-per-click, or just PPC) involves buying ads for keyword searches. For example, when someone searches for “leather shoes,” a shoe company would bid to show advertisements next to or above the links that organically show up. It’s called pay-per-click because the shoe company only pays when a user clicks on an ad. SEM works well for companies looking to sell directly to their target customer. It is the key to capturing people that are actively searching for solutions. Because the scope of the SEO is so vast, it will work for any kind of startup to gain traction. History of SEM In 2012, North American advertisers spent US$19.51 billion on search engine marketing. The largest search engine marketing (SEM) vendors were Google AdWords, Bing Ads,[3] and Baidu. As of 2006, SEM was growing much faster than traditional advertising and even other channels of online marketing.[4] Managing search campaigns is either done directly with the SEM vendor or through an SEM tool provider. It may also be self-serve or through an advertising agency. (from Wikipedia) SEM Terminology

  • Click-Through Rate (CTR) – the percentage of ad impressions that result in clicks to your site. For example, if 100 people see your ad and 3 of them click on it, you have a CTR of 3% (3/100).
  • Cost per Click (CPC) – the amount it costs to buy a click on an advertisement. CPC is the maximum amount you’re willing to pay to get a potential customer to your site.
  • Cost per Acquisition (CPA) – CPA is a measure of how much it costs you to acquire a customer, not just a click.
Great Example using SEO In their book Traction, Weinburg and Mares interviewed Matthew Monahan, CEO and Co-founder of Inflection, a company that at their peak was spending six figures per month on SEM. Inflection is the company behind Archives.com, a genealogy site, which was acquired by Ancestry.com for $ 100 million. Inflection’s core technology is their aggregation.  Monahan’s input on SEO’s value as a traction channel:
“Even if you don’t expect to be profitable, you can decide to spend $5,000 or way less on an advertising campaign and get an early base of customers and users. It informs a whole bunch of things that are really important in terms of the basic [metrics]: conversion rate of landing page, how well email captures are working … if you’re selling a product, what the average cost per customer is and what their lifetime value might be.” “Having those baseline metrics is critical for informing your strategy moving forward and determining what you need to work on.  We just wanted to learn as much as we could for as little cost as possible. So we would test different keyword segments, we would test different concepts.”
Weinberg and Mare’s interview with Matthew clarified that his approach exemplifies the benefits of building traction and developing your product in parallel. Running these small tests enabled Inflection to make improvements to their product while simultaneously acquiring customers. Such tests, also give you a rough idea of how much it will cost to acquire a new customer.  Archives.com business was essentially built on paid search. They dedicated several employees and more than $100,000 a month to customer acquisition through this traction channel. Value of using SEM as a Beginning Traction Channel (from Traction)
  • The basic SEM process is to find high-potential keywords, group them into ad groups, and then test different ad copy and landing pages within each ad group. As data flows in, you remove under-performing ads and landing pages and make tweaks to better performing ads and landing pages to keep improving results.
  • Keyword research is the first core component of a strong SEM strategy. With Google’s Keyword Planner, you can discover the top keywords your target customers use to find products like yours. When you enter a term in this tool, it tells you how often your keyword (and similar terms) are searched. Other tools like KeywordSpy, SEMrush, and SpyFu are valuable for discovering keywords your competition uses to attract customers.
  • You can further refine this keyword list by adding more qualifying terms to the end of each base term, creating what are known as “long-tail keywords.”  They are less competitive and have lower search volumes , which make them ideal for testing on smaller groups of customers. Keep in mind that SEM is more expensive for more competitive keywords. As such, you will want to limit yourself to keywords with profitable conversion rates.
  • After you have keywords you want to target, it’s time to run experiments on the AdWords platform.  You should not expect your campaigns to be profitable right away. However, if you can run a campaign that breaks even after a short period of time, then SEM could be an excellent channel to focus on.
Running a Campaign (from Traction)
  • A campaign is a collection of ads designed to achieve one high-level goal, like selling shoes. You first create different ad groups. For example, if you’re an ecommerce store, you might create an ad group for each product type (e.g. sneakers , loafers, etc.). You then select keywords you want your ad groups to appear for (e.g. “Nike sneakers” for sneakers). After you’ve determined the ad groups and keywords you are targeting, create your first ad.
  • When you write an ad, the title should be catchy, memorable, and relevant to the keywords you’ve paired with it. You will also want to include the keyword at least once in the body of your ad. Finally, you will want to conclude with a prominent call to action.
  • Once you set up your ads, you should use the Google Analytics URL Builder tool to create unique URLs (web addresses ) that point to your landing pages. These URLs will enable you to track which ads are converting , not just the ones that are receiving the most clicks.
  • Building a scalable SEM campaign can take a long time because there are so many variables to test:  keywords, ad copy, demographic targeting, landing pages, CPC, and more. However, this complexity can actually work to your advantage.  You can use tools like Optimizely or Visual Website Optimizer to run A/ B tests on your landing pages.
Quality Score-Each of your ads and ad groups, as well as your whole AdWords account, have a quality score associated with it. This score is a measure of how well customers are responding to your ads.  The quality score is Google’s way of rewarding advertisers for high quality advertisements. Click-through rate has the biggest influence on quality score by a wide margin. Because your ad’s relevance to a particular keyword has the biggest impact on your CTR, you should tailor your ads to the keywords they’ll appear against, either manually or dynamically (for example by using AdWords’ Dynamic Keyword Insertion feature). Advance SEM-For beginners and for those just testing this traction channel, the content network can be difficult to navigate. Yet once you have established profitable campaigns, you should consider expanding them to the content network, which includes millions of non-Google sites that serve Google’s ads.
  • Retargeting  You should also consider luring people back to your site by retargeting through Google AdWords, or other sites like AdRoll or Perfect Audience. With retargeting, users that visit your site will see your ads elsewhere on the Internet. These ads often convert at a higher rate, as they are aimed at prospects who have already visited your site at least once.
  • Conversion Optimizer  Another advanced tool is Google’s Conversion Optimizer. It analyzes your conversion tracking data and automatically adjusts your ads to perform better. After you’ve been running a campaign for a while, using this tool can make your CPAs and keyword targeting better than you would be able to on your own. If you decide to use the Conversion Optimizer, know that it can take time for Google to build a robust prediction algorithm for your campaign.
  • Negative Keywords  You can use negative keywords to prevent your ads from showing for certain keywords. You specify words that you don’t want your ads to appear for: if you’re selling eyeglasses, you want to prevent your ads from showing to people who search “wine glasses” or “drinking glasses,” as those keywords will convert poorly. This technique can significantly improve your CTRs.
  • Scripting One more advanced tactic is using programming scripts to automatically manage your ads. You might use scripts to set up new ads for certain keywords or to change existing ads. Scripts are especially helpful if you are managing a large number of ads or keywords. If you’re not yet scaling up your efforts or focusing.
Other resources on SEM are below to give you even more input on this important Traction Channel. Resources ]]>