1. Chapter 5: Paid Search Marketing

2. Chapter Objectives
Identify the various types of search engine advertisements and their parts.
Analyze the effectiveness of an existing search engine advertising campaign.
Determine ways to improve an ad’s position without increasing the bid amount.
Create a categorized list of keywords on which to advertise on a search engine.

3. Technical Terms
Pay Per Click (PPC)/Cost Per Click (CPC)=the amount an advertiser pays for each click is determined both by the company’s bid and by it’s competitor’s bids
Search Engine Marketing (SEM)=advertising on search engines
Impressions=an appearance-every time an ad appears on a SERP, an impression has occurred, even if the searcher never actually looks at it or clicks on it
Click-through Rate (CTR)=Average CTRs tend to be around 1-4%, but some ads might have a higher CTR based on branded words from a company’s actual brand name
Conversion Rate=the percentage of visitors to a site who make a purchase (retail website) calculated as the number of buyers divided by the number of visitors
Cost Per Acquisition (CPA)=An acquisition is typically considered a completed sale for a retail site or a lead generated for a lead generation site. CPA determines how much it costs, on average, to reach a site’s acquisition goal.
Discuss each term and any related concepts.

4. Anatomy of a Search Page

5. Anatomy of a Text Ad
Ad Extension Examples:

6. Why is SEO & SEM so Important?

8. Common Elements of a High Performing Text Ad
Keyword relevance
Enticing and unique value proposition (UVP)
Geico® could save you 15% or more on car insurance.
With State Farm® you may save up to $480.
Obvious Call to Action (CTA)
State Farm invites the searcher to take action by switching, saving, and calling today. Note: Including a time frame like “today” or “sale ends Friday” adds urgency to a CTA.
Esurance.com invites the searcher to compare and to see.
Ad extensions
The destination URL is not shown
The chapter discusses the anatomy of a text ad. Have the students first identify the title, description lines, and display URL. Note that description line 1 and description line 2 are on one line due to the way Google chose to format this ad.
Review this ad as an example of a good ad. Have the students identify what makes this ad relevant to the keyword searched (point out value of bolded words). Also, discuss the UVP, CTA and ad extensions of the ad.
You may also want to point out that while these ad characteristics are commonly found in high performing ads, sometimes in order to stand out an ad must break the mold, and that A/B testing is a good way to prove which ad is the best.

9. Common Elements of Landing Pages That Convert Are:
Relevant to the keyword searched
Match the ad message, UVP, and CTA
Make it obvious for the user what they need to do to continue through to conversion
Quality score and conversion rates are impacted by landing page content. Have the students point out the UVP and CTA in the landing page screenshot here that matches the ad on the previous slide. Have the students discuss what is good about this landing page and what could be improved. Ask the students whether they believe this landing page has ALL three of the common elements listed here.

10. Product Listing Ad (PLA)
Displayed when Google thinks someone is looking to purchase a product

11. Whose ad is best? Which ad(s) stand out?
Which ads are the most relevant?
What do the ad messages focus on?
Who will the ads appeal to?
What are their unique value propositions?
What are the call to actions being used?
After doing Google searches as outlined in the lesson plan, discuss and analyze the ads specifically based on these questions.

12. High Performing Landing Pages
Does the landing page encourage a purchase?
How targeted to that specific keyword phrase is the landing page?
Do the price, promo, and keywords align with the ad copy?
Within seconds of landing, is it obvious what the user is expected to do next?
As you click through the ads to see the landing pages associated with the ads on the Google SERPs as outlined in the lesson plan, discuss and analyze the landing pages specifically based on these questions.

13. Calculations Cheat Sheet
Click Through Rate=(Clicks/Impressions)*100=CTR
Ex: (100 Clicks/3000 impressions)*100= 3.33% CTR
Conversion Rate=Numbers of Buyers/Number of visitors
Ex: If 100 people visit a site and two make a purchase, the conversion rate is 2%
Return on Advertising Spend (ROAS)=(Total Revenue/Total Adspend) x 100=ROAS
If a company sold $30,000 in cars and it spent $10,000 on ads, the ROAS would be 300%
Cost Per Acquisition=Total Amount spent on Advertising/the total number of sales completed (or leads generated)
Ex: If an advertiser spends $100 and gets 10 sales, its CPA is $10

14. PPC Math
With a budget of $1000, an average CPC of $2.50, how many clicks can the advertiser receive before their budget is exhausted?
ANSWER: $1000/$2.50 = 400 clicks

15. PPC Math
With an unlimited budget, an average CPC of $1.00, a CTR of 1.8%, and 60,000 impressions, how much will the advertiser spend?
ANSWER: (60,000 * .018) * $1 = $1080

16. PPC Math
With an average CPC of $2.00, how high does the conversion rate need to be in order to reach a goal CPA of $10?
ANSWER: ($2/$10) * 100 = 20%

17. PPC Math
If you have a $3000 budget, your average CPC is $0.50, and your conversion rate is 5%, what is your current CPA? How many conversions can you get for $3000?
ANSWERS: At a 5% conversion rate 5 out of 100 clicks result in sales, or 1 sale for every 20 clicks. 20 Clicks * $0.50 = $10 CPA. $3000 Budget/$10 CPA= 300 conversions.

18. PPC Math
Assume you buy women’s skirts at wholesale for $10, and you resell them online for $50, and you give away free shipping which costs $5, and you want to make $20 per dress, what should your target CPA be?
ANSWER: $50 Retail Price - $10 Wholesale cost - $5 Shipping cost - $20 Target Margin = $15 Target CPA

19. PPC Math
Using the above information and answer, with an average CPC of $3, how many clicks can you get before you get a sale? What should be your target conversion rate? 
ANSWER: $15 CPA / $3CPC = 5       (1 Conversion / 5 clicks) = 20% Target conversion rate.

20. Buying Ad Space
With paid search advertising, the price paid to advertise could change from one minute to the next
Cost-Per-Click Bidding (CPC)=search engines sell keyword ad space using an automated auction platform. Advertisers place a bid on a keyword (with how much they are willing to pay) and the winning bid gets the best ad location for searches on that keyword
CPC is determined by:
Quality Score
Maximum CPC bid
Expected impact of extensions and other ad formats to determine Ad Rank

21. Second-Price Auction Model
Charges the highest bidder only a penny more than the bid of the second-highest bidder
Second-Price Auction
Bid Pays
Bidder 1 $3.00 $2.01
Bidder 2 $2.00 $1.51
Bidder 3 $1.50 ??

22. Quality Score
How often does Google calculate the Quality Score? Each time an ad is considered for display for a particular keyword
The Quality Score considers
Expected CTR
Landing Page Experience (bounce rate)
Ad Relevance
Ad Rank takes into consideration the Quality Score
The Advertiser with the highest Ad Rank is awarded the top Ad position

23. Choosing the Best Keywords
Ask the questions below for class discussion. Using the data on this slide, or by referring to the data when loggedin to the Stukent RealDeal simulation, pick 3 keywords and have students volunteer why they would or would not advertise on that keyword.
--What makes a keyword ideal for advertising? 
--Does a high CPC mean you shouldn't bid? 
--Does a low CPC always mean the keyword is worth it? 
--How much should you bid? Higher than the average CPC? Lower?
--Should you shy away from high search volumes or are those a good thing?  
--What about selling lots of brands of tablets? 
--Do you get more traffic when you have campaigns for lots of different tablets?  
--Should you sell lots of brands of tablets in the same campaign? Why? Or Why not?
Point out the round search trends. Ask the students which keywords they would choose to bid on if they wanted to get the most impressions in round 2. Assuming that each round represents a month in real life, ask them why they think search volume may vary each month.

24. Analyzing Keyword Performance
You can use the data on this slide, but I recommend finding a high-performing volunteer student that will allow you to login as them in their RealDeal Simulation account. Click into the Search Engine Marketing Module. Click the Keywords tab. Analyze the keyword data as a class and have the students use the data to discuss the following:
--Give examples of keywords that are performing well and explain why.
--Give examples of keywords that are performing poorly and explain why.
--Upon mouseover of the red dots to the left of the keywords, the simulation warns, “Ad not showing. Increase bid or check Ad/Landing page structure.” Explore and determine as a class what is most likely the cause of the ad not showing.
--Are there any keywords you would pause? Why?
--Are there any keywords you would want to increase bids for? Why?
--Are there any keywords you would want to decrease bids for? Why?
--What could be done to improve average ad positions?
--List things that could be done to improve average CTR?
--What keyword has the best CPA?
--Why is it important to review keyword performance and optimize bids?
--How frequently should you adjust bids, ads and campaigns?
--What seems to be the searcher’s intent when they type in a keyword like [Samsung tablet review]? What about if they search for [tablet PC reviews]? Are they just as likely to buy?

25. Adwords Account Structure
Review the Adwords Account Structure diagram on this slide as seen in section 8 of chapter 5. Discuss how the proper organization of an account helps with account management and keyword-to-ad relevance.

26. Keyword Match Types
Have 5 volunteer students each describe one of the match types. Have another 5 students talk about why and when they would choose to use each of the match types.