Search Engine Marketing, or SEM, is a form of internet marketing that uses search engine page results or site content to direct customers towards products or offerings. SEM advertising campaigns can appear in either search results and or within site content (i.e. contextual advertising).
Market leaders include Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter. As Google AdWords is the largest SEM competitor, we will demonstrate how you can develop a successful ad campaign using their platform.
There are four main elements in Google AdWords: keywords, advertising messages, targeting and budget. To start, you will want to cast a wide net and optimize your efforts as you go. For instance, you will want around 95 keywords to begin, then delete those keywords that are under-performing.
Keywords are the center of SEM. Determine which keywords customers would use to find your product. Google’s keyword tool can help you find and identify these keywords. For instance, let’s say you’re a florist launching a SEM campaign. In addition to obvious keywords, like “flowers,” also be sure to words that describe your product (e.g. tulips, roses, etc), the competition (e.g. 1800flowers), events and holidays (e.g. birthday, Christmas, Valentine’s Day). In the end, you should have at least 95 keywords — the more the better.
With this information, you will develop around three to four SEM ads — each promoting a different element of your business. For instance, one of the ad campaigns might be, “Flowers for her birthday, Give her the gift of love” and though your audience might have a disposable income, they might be savvy shoppers — so throw in a campaign that advertises discounts. In all advertisements, Google recommends that you use keywords to catch customers attention.
Targeting Your Audience
One of the most helpful features in Google AdWords is geo-targeting. Geo-targeting (also called “Location”) means only those people in your specified market will see your ad. In this instance, people in Idaho are not going to see your ad if you’re based in Rochester and Philadelphia. As you are trying to collect as much data as possible, be sure to include surrounding towns, such as Henrietta, Pittsford, Narberth and Main Line.
Deciding Your Budget
Lastly, you will need to set a budget. To determine your maximum click per customer (or CPC), identify the lifetime value of each customer and assume only 1:8 users that click on your ad will become customers. This 1:8 ratio is called conversion rate. You want to spend less than each customer is worth while acquiring new customers. Additionally, you will need to set a daily cap on spending. Therefore, if you’re monthly SEM budget is $1,500, you can spend about $50 per day.
Let your ad campaign run for about a week and a half to gather as much data as possible. At this point you will be able to see which keywords and locations are performing well and those that are not. Maybe “tulip” has 29 clicks while “birthday” only has 1. Delete those under-performing keywords, locations and ads to optimize your efforts. Over time you will see what works and what doesn’t to determine which keywords and campaigns are most effective in acquiring new customers.