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Paid search marketing

Paid search marketing or paid listings are similar to conventional advertising; here a rel-

evant text ad with a link to a company page is displayed when the user of a search engine 

types in a specific phrase. A series of text ads usually labelled as ‘sponsored links’ are dis-

played on the right and/or above and below the natural search engine listings. Unlike con-

ventional advertising, the advertiser doesn’t pay when the ad is displayed, but only when 

the ad is clicked on which then leads to a visit to the advertiser’s website – hence this is 

often known as ‘ pay-  per-  click marketing’! The relative ranking of these ‘paid performance 

placements’ is typically based on the highest bid  cost-  per-  click value for each keyphrase. 

The variation in bid amounts for clients of one search bid management tool are shown in 

Table 9.1.

But it is not a simple case that the company which is prepared to pay the most per click 

gets top spot as many think. The search engines also take the relative clickthrough rates of 

the ads dependent on their position (lower positions naturally have lower clickthrough rates) 

into account when ranking the sponsored links, so ads which do not appear relevant, because 

fewer people are clicking on them, will drop down or may even disappear off the listing. 

The analysis of CTR to determine position is part of the 

quality score

, a concept originally 

developed by Google, but now integrated as part of the Microsoft Live and Yahoo! search 

networks.

As well as paid search ads within the search engines, text ads are also displayed on  third- 

 party sites (for example, the ads on 

www.davechaffey.com

) which form a