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Unraveling the Essential Building Blocks of SEM
On October 23, 2000, Google gave birth to Google Adwords, the first self-serving online advertising platform. Its launch sent waves that reverberated across the marketing industry, redefining advertising as we’ve come to know it.
Since then, SEM has gone on to become a multi-billion dollar industry, with Google cornering over 73 percent of the paid ad market—and for good reason: Google controls more than 92 percent of the global search engine market.
By comparison, its closest rival, Microsoft Bing, holds a fraction of Google’s volume at 2.79 percent, followed by Yahoo at 1.1 percent. Its dominance is particularly evident in Singapore, where it commands over 95 percent of the market.
However, Bing and Yahoo should not be dismissed outright. Since the integration of ChatGPT, Microsoft has reported a rise in daily active users, hinting at possible shifts in a previously rigid market. Moreover, Bing and Yahoo typically offer less competition for ad space than Google, which can lead to lower advertising costs.
Despite these emerging factors, Google’s long-term dominance in the search engine market remains unchallenged, which is why the focus of this article will be on Google SEM.
To put this into context, on any given day, Google processes over 5.6 billion searches; that equates to roughly 63,000 search queries per second. YouTube, the most popular video-sharing platform in the world, also owned by Google, has 2.5 billion monthly active users across the globe. Similarly impressive is Google’s Display Network, which reaches 90 percent of online customers. This network comprises various sites that allot space for Google Ads (more on that below).
All of these factors together make Google SEM a compelling advertising platform for marketers. But what exactly is Google SEM?
Understanding Google SEM
As alluded to earlier, SEM enables advertisers to drive qualified traffic (customers that fit a target demographic) to their business. Advertisers can tailor their ads to fulfil various objectives such as capturing leads, increasing in-store visits, or boosting website traffic via Google SEM with a broad spectrum of campaigns, ranging from shopping campaigns to app campaigns, remarketing ads, dynamic (responsive ads) and much, much more.
Why Advertise on Google
Besides being the most popular search engine in the world, there are several reasons why businesses should add SEM to their digital marketing strategy.
1. Intent-Based Advertising
Because Google is used to search for information, products or services, businesses can target users who are actively looking for what they offer, leading to higher conversion rates.
2. Targeting Capabilities
Google offers a variety of targeting options for businesses, such as keywords, demographics, location, and even the time of the day. This can help businesses reach the most relevant audience for their products or services.
3. Measurable Results
Unlike traditional advertising methods, Google provides detailed metrics that can help businesses understand how their ads are performing and where their money is going. This makes it easier to measure return on investment (ROI) and adjust strategies as needed.
4. Competitive Advantage
On account of its effectiveness, a large number of businesses are including Google SEM into their digital marketing strategy. If your competitors are using Google Ads, and you’re not, they are likely appearing in search results above you and potentially capturing traffic that could have been yours.
A Breakdown of How Google SEM Works
Understanding how SEM works can significantly enhance your marketing efforts. However, to effectively leverage its capabilities, it is crucial to understand how it works. But before we delve into the steps, let’s go over some terms you will encounter during your journey with Google SEM.
Essential SEM Terms to Know
Ad Extensions
Ad Extensions are extra bits of information that you can supplement to your Google Ads when they appear in search engine results pages (SERPS). They are often used to provide more information and increase visibility on SERPS. There are a variety of Ad Extensions including, sitelink extensions, call extensions, location extensions, offer extensions, app extensions and more.
Ad Rank
Ad Rank is a metric used to determine the placement of your ads compared to other ads. Ad Rank is calculated based on your maximum bid for a keyword or ad group multiplied by your Quality Score. With a high Ad Rank, your ad will rank better, gain more eyeballs and have a greater chance of users clicking on the ad.
Bidding
Google Ads operates on a bidding system that determines which ads will be placed within a given ad space. Advertisers set a limit on the highest amount of money they are willing to pay for a click, with the more favourable positions going to those with higher bids.
There are several bidding strategies that apply to Google SEM, tailored to different types of campaigns and goals. This includes:
- Target cost per action (CPA)
- Target return on ad spend (ROAS)
- Maximise Conversions bidding
- Maximise Conversion Value bidding
- Enhanced cost per click (ECPC)
- Maximise Clicks bidding
- Manual CPC bidding
- Target Impression Share
- Cost-per-thousand viewable impressions (vCPM)
Click-Through Rate (CTR)
CTR is a metric used to measure the percentage of people who click on an ad relative to the total number of people who view. It is often used to evaluate the effectiveness of an ad. The formula for CTR is as follows:
Total Clicks / Total Impressions = Click-Through Rate
Conversion Rate
Conversion rate is a metric used to measure the percentage of users that take a predetermined action after clicking on an ad. Examples of actions that constitute a conversion include, but are not limited to, purchasing a product or service, contacting via email or phone, filling out a contact form and downloading an application.
Display Network
They are two main places where Google Ads can be displayed: on SERPS and on web pages that are part of Google’s Display Network. This Display network is a group of more than 2 million websites, videos, and apps where your Google Ads can appear.
Impressions
Impressions is a term used to refer to the number of people who view a Google Ad. In certain circles, you’ll hear advertisers informally refer to impressions as ‘eyeballs’. Impressions can help you understand whether your advertisement is being seen or not. And from this insight you can use it to understand the percentage of people clicking on your ad, and make further adjustments if necessary.
Keywords
Keywords are words or phrases that Google uses to match a user’s search query to the most relevant web content. Advertisers can select keywords that they want to associate with their ads. For example, if a user searches for ‘nike sneakers’, Google will serve ads from advertisers who have chosen ‘nike’ or ‘sneakers’ as their target keywords.
To further refine ad targeting, advertisers can use different keyword match types to designate how closely a user’s search query needs to align with a keyword to trigger an ad. A few of the main keyword match types include, broad match, phrase match, and exact match.
Apart from this, advertisers can also designate negative keywords. These are keywords that are to be dissociated with an ad, and are typically used for keywords that are semi-related to what you offer, but fall out of the scope of your products and services.
For example, if you are an owner of a bookstore selling new books, keywords you might use to attract potential customers include, ‘books,’ ‘novels,’ ‘buy books,’ e.t.c.
In such a situation, keywords such as ‘used’ or ‘second-hand’ can be designated as negative keywords.
Because, despite being related to books, these keywords attract a segment of users who are not likely to buy what you are offering, since you don’t sell used books.
Pay Per Click (PPC)
PPC is an advertising model in which advertisers pay each time a user clicks on their ad. SEM is a key type of PPC advertising, focusing specifically on search engine results.
Quality Score
Quality Score is a metric used to determine the quality of your ad in relation to other advertisers. It is dependent on multiple factors, including your click-through rate, the relevance of your keywords, your historical Google Ads account performance, the quality of your ad text as well as your landing page quality and relevance.
Demystifying Google SEM: The Process Explained
Before we dive in, it’s crucial to recognise that three primary participants contribute to the Google SEM process: the searcher, the advertiser, and the Google Ads platform. Each has a significant role to play where businesses can effectively promote their products and services by reaching potential customers.
Here’s an overview of what happens behind the scenes:
1. The Bid
Through a process called bidding, advertisers bid for the keywords they want to associate with their ads on SERPS. Depending on the competition level, Quality Score, and a myriad of other factors, the cost for a keyword can range between a few dollars to hundreds of dollars.
2. The Query
Once advertisers have bid on a keyword, next comes the search query. In essence, once a user searches for a product or service, they’ll see ads on SERP from advertisers that closely match the intent of the query.
3. The Position of Your Ad
During the time it takes a user to input their search query, and for the results to show in SERP, Google is computing a crucial metric known as Ad Rank.
Ad Rank, as we’ve previously mentioned, is a metric based on the quality score and maximum bid, and it determines which advertisers get the number one spot, the number two spot, the number three spot and so on.
4. The Click
Upon seeing the ads for the keywords they searched for, potential search engine users may choose to click on one of the several ads that are relevant to their search intent.
Once they’ve clicked on an ad, they may choose to make a purchase, return to the SERPS and click on another ad, or simply leave without taking any action.
However, it’s important to highlight that irrespective of whether users interact with an ad, search ads can amplify top-of-mind awareness, positioning a brand as the first one consumers consider in association with a particular product or service. In countries such as Singapore, which boasts a robust smartphone penetration rate of 85 percent that surpasses PC usage, Google reports that users who engage with an ad are over twice as likely to purchase goods or services compared to those who didn’t encounter the ad.
Factors Contributing to SEM Performance
So far, we’ve explained common SEM terms, and broken down the SEM process into its most elemental form. Now, let’s explore some of the factors that affect the performance of your SEM campaigns.
1. Keywords
Keyword research is an important part of the Google SEM process. The keywords you choose can have a significant bearing on the success of your Google SEM campaign. This is because Google matches your chosen keywords with user search queries. The closer your keywords align with user search intent, the more likely customers are to engage with your ad.
2. Ad Rank
Ad Rank influences just how well-placed your ad will be in relation to your competitors. As previously mentioned, your Ad Rank is determined based on your quality score and the maximum amount of your bid for a keyword. Keep in mind that there are several other factors that influence ad rank, including, but not limited to the context of the search (which encompasses elements such as location, device & time), specifics of the search terms, competitiveness of an auction, expected impact of assets and more.
That said, we highly recommend following quality score best practices.
3. Headline and Description
Finding relevant keywords is only one part of the process in creating an effective Google SEM campaign, the quality of your ad copy (your headline and description) also plays a significant role. It can affect whether a user clicks on your ad or on one of your competitors.
Your keywords should be as close to searcher’s intent as possible, addressing their pain points with clear solutions. Your headlines and descriptions should underscore your unique selling proposition (USP). They need to be concise, straightforward, and comprehensible, coupled with a clear call to action that prompts an immediate response. Please remember, this will only be effective if the same attention to crafting concise and impactful copy for your headline and description is also applied to your landing page.
4. Ad Extensions
Ad Extensions are free and can add considerable versatility to your ads. For one, they allow you to relay additional information to customers; secondly, they increase the chances of users interacting with your ad.
Depending on the nature of your ad, you can choose to use any of the aforementioned ad extensions to maximise CTR, relevance and conversion rates through effective optimisation.
5. Location
As part of the Google Ad process, during the geo-targeting setup, you’ll be asked to specify the geographical area where you want your ads to be displayed. This setting can affect the placement of your ad.
Google offers a comprehensive suite of targeting solutions designed to enhance your customer reach. Skilled SEM specialists can assist you in choosing advanced location options pertinent to your objectives. Whether your goal is to connect with individuals situated in or frequently visiting your targeted areas, or with those searching for your targeted locations, the right expertise can guide your strategy effectively.
For example, If your target audience is potential customers in Singapore, you would typically designate locations such as “Malaysia”, “Johor Bahru” or “Mumbai” as negative keywords. You also have the option to exclude specific areas from viewing your ads using local area negative keywords. This can prove beneficial when certain locales aren’t pertinent to your business, for instance, if your business doesn’t deliver to specific areas. With this, you can avoid spending money on clicks with low conversion potential.
To put it simply, Google’s overarching goal is to provide relevant results, so if you own a physical printing shop in Yishun, and set your target location to a few miles around your store, a person in Mumbai searching for printing shops won’t see your ad no matter the ad rank.
These are just a few of the many tactics to maximise your ROI and they are details that experienced SEM agencies and skilled SEM strategists are trained to identify.
Are You Ready to Take Your Google SEM to the Next Level?
Google’s position as the most popular search engine as well as its extensive tools and versatility make it worthwhile to include in your digital marketing strategy. The information shared above will help you get a better sense of what you need to create a successful Google SEM campaign.
Should you require expert assistance navigating the complexities that revolve around building an effective Google SEM campaign, consider consulting a specialist SEM agency to get the best return on your investment.
On that front, Rogue Digital stands out; we are a full-service digital marketing agency with a wealth of experience under our belt. If you wish to schedule a consultation, you can do so by clicking here.
