Bid Fight
Understand the search environment, then plan your keyword strategy to optimize your search budget
February 2006 By Andrew Goodman
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Paid search advertising has been with us for nearly eight years now, since GoTo.com pioneered the concept in 1998. Growth was rapid, as Overture and Google fought for paid search supremacy. Google alone boasts about 400,000 advertiser accounts worldwide and exceeded $5 billion in revenues in 2005, 97 percent of that from advertising. Judging by my clients’ accounts, Overture (now Yahoo! Search Marketing) generates about half the spend and click volume of a typical Google AdWords campaign.
The typical layout on sites such as Google Search places small text ads in the right-hand margin next to search results on a given user query, as well as a limited number of ads highlighted above the non-paid, “natural” results, at the top of the page. The total number of ads on the page may vary based on these companies’ ongoing tests; 10 is a typical number. Advertisers have made increasing use of these paid slots, as they have more control over placement than they do in unpaid results. However, as anyone with a paid search account knows, the process can be complex.
Jockey for Position
Today’s leading search engines maintain a rigorous church-state separation between search index (organic) results, and the keyword-triggered ads appearing nearby. In spite of relatively clear labeling on the page, many search engine users do not distinguish between paid and unpaid results. Jakob Nielsen, the Web usability guru, has written that the very top result on the page, paid or unpaid, appears to users as a “default choice,” and attracts many clicks because searchers crave unambiguous direction.
Recent eye-tracking lab studies confirm the importance of appearing as high on the results page as possible. The so-called “golden triangle,” a hot zone at the top of the screen, garners the preponderance of user attention. Moreover, at least on many high-volume queries, listings appear to generate a higher click-to-sales ratio out of the top three positions on the page, according to a recent study by Atlas Research.
Of course, the highest ad positions come at a higher cost. A look at a typical bidding war on a popular query shows that ad costs may ramp up exponentially when moving from the middle of the pack up to the first or second ad position. For example, a query on the keyword “high-ratio mortgage” reveals that the first spot costs three times as much as fifth position.
Thus the paradox: Advertisers may gain greater legitimacy and generate higher volumes of clicks and sales if they appear in the top two or three ad positions, but if advertisers attempt to outbid one another to reach those positions, the cost can become prohibitive. So, do you have to bite the bullet and bid more? Let’s review recent changes in the search environment to keep in mind when planning your search engine optimization strategy, and talk about some tactics to help you run a more efficient campaign.
The typical layout on sites such as Google Search places small text ads in the right-hand margin next to search results on a given user query, as well as a limited number of ads highlighted above the non-paid, “natural” results, at the top of the page. The total number of ads on the page may vary based on these companies’ ongoing tests; 10 is a typical number. Advertisers have made increasing use of these paid slots, as they have more control over placement than they do in unpaid results. However, as anyone with a paid search account knows, the process can be complex.
Jockey for Position
Today’s leading search engines maintain a rigorous church-state separation between search index (organic) results, and the keyword-triggered ads appearing nearby. In spite of relatively clear labeling on the page, many search engine users do not distinguish between paid and unpaid results. Jakob Nielsen, the Web usability guru, has written that the very top result on the page, paid or unpaid, appears to users as a “default choice,” and attracts many clicks because searchers crave unambiguous direction.
Recent eye-tracking lab studies confirm the importance of appearing as high on the results page as possible. The so-called “golden triangle,” a hot zone at the top of the screen, garners the preponderance of user attention. Moreover, at least on many high-volume queries, listings appear to generate a higher click-to-sales ratio out of the top three positions on the page, according to a recent study by Atlas Research.
Of course, the highest ad positions come at a higher cost. A look at a typical bidding war on a popular query shows that ad costs may ramp up exponentially when moving from the middle of the pack up to the first or second ad position. For example, a query on the keyword “high-ratio mortgage” reveals that the first spot costs three times as much as fifth position.
Thus the paradox: Advertisers may gain greater legitimacy and generate higher volumes of clicks and sales if they appear in the top two or three ad positions, but if advertisers attempt to outbid one another to reach those positions, the cost can become prohibitive. So, do you have to bite the bullet and bid more? Let’s review recent changes in the search environment to keep in mind when planning your search engine optimization strategy, and talk about some tactics to help you run a more efficient campaign.
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