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What is Paid Search?

Updated: Jun 14, 2023

I once went through an entire presentation with a client on this topic. I shared all kinds of useful information and insights about this advertising option. I was sure that I nailed the presentation.

Then, I found out they thought I was saying "paperclip" instead of "pay-per-click."

They were thoroughly confused. And it taught me a lesson to slow down while I am presenting, although I am still guilty of talking a bit too fast or too much.

Anyway, since the terms are interchangeable, I now refer to it as "paid search" vs "pay-per-click" to avoid confusion!

What is paid search, or pay-per-click? And why is it important?

Simply put, paid search is advertising on search engines. It allows businesses to pay search engines to place their ads higher on results pages. The goal is to drive traffic to their site.

It's what happens when I search "best running shoes for women." The first few results that pop up have "Sponsored" in the upper left corner.

Why is paid search so critical businesses?

It's the one spot to reach shoppers with INTENT. If someone is searching for a window repair shop on Google or Bing, they likely have a need for window repair. A window company may spend thousands on direct mailers trying to convince people to use their product, but some of those ad dollars may go to waste on people who don't need that service.

Businesses should be spending some ad dollars on paid search because it's what advertisers call "lower funnel" marketing. This simply means you have moved your buyers past awareness advertising and reached them at the intent phase.

Paid search is relatively inexpensive and can even be focused on a small area if you are a hyper local service company.

Why paid search benefits B2B businesses.

Paid search is also crucial to B2B businesses because they can get really granular with their search terms to only reach companies that are in the market for their particular offering. An auto dealer looking for a new spark plug supplier may search for "wholesale spark plugs." The spark plug manufacturer could use paid search to bid on a high SERP (Search Engine Result Page) ad position.

We've talked about why paid search is important, but how does it work?

Paid search is COMPLICATED.

I don't mean that in a condescending way. It's a particular field of advertising that requires expertise to properly optimize performance.

The 3,000 foot view of how it works is a process that includes:

  1. Providing the search terms you think your customers will be using to find your product, or one similar to yours.

  2. Telling the ad platform how much you're willing to pay for a click from someone who searched the terms you provided, or similar terms.

  3. Telling the search engine which terms are NOT relevant to weed out the waste. (This is extremely important and an ongoing part of campaign management.)

  4. Tracking conversions from clicks to understand how much you are actually paying to acquire a customer.

  5. Refining your search terms on an ongoing basis.

  6. Testing various ad copy to understand which combinations work best.

Most clients do not have the time or energy to perfect paid search and, as a result they wind up wasting money.

Google wants to maximize how much you spend on a click, so they provide automated tools that funnel new advertisers into a system designed to maximize Google's income, not the advertiser's conversions.

Bottom line: Hiring paid search expert pays for itself vs. using automated tools.

Many businesses are scared off from advertising via paid search because they do not think they have the money to compete with national advertisers.

For example, a local framing shop may fear that they will always get outbid by a national chain. But, Google loves local! Your ad may surface higher than your competition, even at a lower bid because of something called "quality score." Quality score is another complicated algorithm that takes a lot of factors into account, but helps hyper local advertising beat out bigger brands.

If you're thinking about kicking off or refining a paid search campaign for your business, please contact us for a quote!


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