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Why does paid search work so well?

Sometimes I get so tied up in being an expert that I miss the basics. It happened to me not long ago when I was explaining some deep search marketing concepts to a savvy marketing audience. From the questions I was getting, it was clear to me that my listeners were overlooking a basic reason that paid search ads work—people want to see them.


As someone steeped in search technology for 20 years, it’s obvious to me that people searching for something are interested in the answer—so obvious that I sometimes fail to mention it. But it’s not so obvious to marketers, because the whole domain of advertising has grown up around interrupting people doing something else. To the dyed-in-the-wool advertising person, it’s almost a foreign concept to think about people actually desiring to look at your advertising message. That’s what’s different about search.
But instead of comparing paid search to traditional advertising, such as TV and print, where so may things are different, let’s make a simpler comparison. We’ll examine the differences between banner ads and paid search ads.
Banner ads are shown on Web site pages the same way print ads are shown in magazines—bought based on the subject matter of the content and the demographics of the readership. So, Canon might want to buy a banner ad for its digital cameras on Digital Photography Review’s site, because of the subject matter. And Gillette might want to buy a banner for its razor and razor blades on ESPN, because of its predominantly male audience.
Here’s what we know about the effectiveness of banner ads. Their recall rate is quite low (about 20%) and their clickthrough is also low (usually well under 1%). So what do we know about paid search? We know that their recall rate is about 60% and their clickthrough rate is almost always over 1%, sometimes as much as 10%.
To a veteran advertiser, this seems amazing. I mean, just look at those sexy banners with big type and pictures next to those sedate little text-only search ads. Why do customers click on these boring-looking paid search ads while ignoring the glitzier banners?
Because the search ads are relevant to what they are looking for. Search engines sell the ads based on the words the searcher enters, so ads for “life insurance” are displayed when the searcher is interested in that topic (unlike banners that are shown at random). In other words, the mere act of searching has eliminated most of the audience who doesn’t care about the subject.
I know that this point is basic, but I’ve seen so many people stumble over it recently that I can’t help but point it out. Searchers are a self-selecting audience. Marketers have a chance to get their message in front of someone who is ready to hear it. And they can reach them at the exact moment they are ready to listen. No wonder search ads work so much better than banners.

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Mike Moran

Mike Moran is an expert in internet marketing, search technology, social media, text analytics, web personalization, and web metrics, who, as a Certified Speaking Professional, regularly makes speaking appearances. Mike’s previous appearances include keynote speaking appearances worldwide. Mike serves as a senior strategist for Converseon, an AI powered consumer intelligence technology and consulting firm. He is also a senior strategist for SoloSegment, a marketing automation software solutions and services firm. Mike also serves as a member of the Board of Directors of SEMPO. Mike spent 30 years at IBM, rising to Distinguished Engineer, an executive-level technical position. Mike held various roles in his IBM career, including eight years at IBM’s customer-facing website, ibm.com, most recently as the Manager of ibm.com Web Experience, where he led 65 information architects, web designers, webmasters, programmers, and technical architects around the world. Mike's newest book is Outside-In Marketing with world-renowned author James Mathewson. He is co-author of the best-selling Search Engine Marketing, Inc. (with fellow search marketing expert Bill Hunt), now in its Third Edition. Mike is also the author of the acclaimed internet marketing book, Do It Wrong Quickly: How the Web Changes the Old Marketing Rules, named one of best business books of 2007 by the Miami Herald. Mike founded and writes for Biznology® and writes regularly for other blogs. In addition to Mike’s broad technical background, he holds an Advanced Certificate in Market Management Practice from the Royal UK Charter Institute of Marketing and is a Visiting Lecturer at the University of Virginia’s Darden School of Business. He also teaches at Rutgers Business School. He is a Senior Fellow at the Society for New Communications Research. Mike worked at ibm.com from 1998 through 2006, pioneering IBM’s successful search marketing program. IBM’s website of over two million pages was a classic “big company” website that has traditionally been difficult to optimize for search marketing. Mike, working with Bill Hunt, developed a strategy for search engine marketing that works for any business, large or small. Moran and Hunt spearheaded IBM’s content improvement that has resulted in dramatic gains in traffic from Google and other internet portals.

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