The Rise of Search Engine Marketing

Pay Per Click (PPC) is the cornerstone of advertising revenue for the three big search engine providers today, namely Google[1], yahoo and Microsoft[2]. Google’s AdWords has the greatest online presence[3] in the search engine advertising sphere so Yahoo and Microsoft have consolidated their efforts into the Yahoo | Bing Network. With AdWords now Google’s biggest source of income we may want to explore what PPC is and how it rivals traditional advertising.

With every new communication or broadcasting medium comes a new avenue of advertising. What would newspapers be without the classifieds or full-page ads? Telephones enabled telemarketers to talk to you about their new amazing product within your very home. Watching the Super Bowl wouldn’t be the same without the half-time commercial spots. In all of the above examples advertising took advantage of the capabilities of the medium. With colour printing came colour ads. Jingles that were popular with their respective brands on radio easily made the jump to television, with the added benefit that listeners were now also viewers of their product.

If advertising adopts the capabilities of the medium it inhabits, what then are the hallmarks of the World Wide Web that all before it significantly lacked? In short, interactivity.

A person had a binary choice with the consumption of an advert in a newspaper, on the tube or over the radio. Either you paid attention to it or you didn’t. Marketers also only had one choice in the delivery of their ad, which magazine, television channel or newspaper would display it. This was the interface between the marketers and the world. They could only hope that their advert will reach its broadly indicated audience and that some response will be merited, often difficult to measure directly. Traditional advertising is a one-way street.

The internet is not.

Whereas a person used to read, listen or view content, now they browse. That indicates that they are being selective and thus constantly engaged in the material. That’s a great boon in itself already but the real gain here comes from the information we reap from customer behaviour. Thanks to the two-way nature of the internet we can now learn a little bit about the people who showed interest in your ad, and maybe even about those who did not. At the forefront of this marketing revolution sits Google AdWords.

There are two fundamental methods for navigating and finding information on the web with a web browser. Clicking on hyperlinks and using search engines. The latter provides the user with relevant sources of the former. Google has become so ubiquitous in this regard that it has embedded itself in today’s lexicon[4].

Google is focused on delivering rich, relevant information to its users and to that end applies the same philosophy to its advertising services. With Google’s AdWords the lofty goal of displaying your ad to as wide an audience as possible is discouraged. Narrowing your audience, designing your ad with the intended customer in mind and essentially second-guessing what a user would want to see are the recommended practices. To facilitate this Google has added functionalities to AdWords that provides multitudes of feedback on customer behaviour in near real time. A marketer can now observe ad performance, experiment and adjust accordingly. This is the spirit behind targeted advertising, enabled by fast adoption of emergent technology.

It is increasingly clear that the next phase in advertising is proactive and it is online.

References:

[1] http://investor.google.com/financial/tables.html

[2] http://www.microsoft.com/investor/EarningsAndFinancials/Earnings/PressReleaseAndWebcast/FY14/Q1/default.aspx

[3] http://www.comscore.com/Insights/Press_Releases/2014/1/comScore_Releases_December_2013_US_Search_Engine_Rankings

[4] http://www.oxforddictionaries.com/us/definition/american_english/google

Yuri Shatalov
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