What is Paid Search?
Paid Search (aka Sponsored Search) refers to any form of advertising or marketing that involves payment that is directly or primarily associated with the results of an online search. The methods of payment can be various but are now typically Pay-Per-Click (PPC), although Cost-Per-Thousand Impressions (CPM) or Pay-Per-Action (PPA aka CPA) can be found. The latter are more commonly associated with more general, non-search, forms of online advertising like Banner Ads.
Paid Search is contrasted with Natural Search (aka Organic Search) which is influenced primarily be search relevance determined by software algorithms. While money can be spent on influencing natural search results, through knowledge of how algorithms typically work and search engine optimisation of a website, the latter kind of expenditure is indirect and non-specific to individual searches.
Pay per click (PPC) Advertising is the most common advertising model used on search engines, advertising networks and content websites, where advertisers only pay when a user actually clicks on an advertisement which passes the user through to the advertisers' website or targetted landing page. Advertisers bid on keyword phrases relevant to their target market. When a user types a keyword search query matching an advertiser's keyword list, or views a webpage with relevant content, the advertisements may be displayed. Such advertisements are called sponsored links or sponsored ads and appear to the right of or above the "natural" or organic results on search engine results pages, or anywhere a webmaster or blogger chooses on a content page.
Cost-Per-Thousand Impressions (CPM) refers to the cost of showing your Ad one thousand times regardless of how many users click on the Ad. Pay-Per-Action (PPA) refers to the cost for each action successfully performed by the searcher such as a form completed (sale, membership, enquiry, order or whatever can be successfully tracked by webpage code).
So, who are the paid search engines? The best-known of the PPC advertising services is Google AdWords, whose market reach is the largest. The oldest service with the oldest technology is Yahoo Search Marketing (formerly overture.com aka goto.com bought by Yahoo!). This latter service has been significantly upgraded in some markets and has reached Australia in 2007. Microsoft has recently entered the lucrative PPC market, starting in the USA, through its Microsoft AdCenter and will be rolling this out to Australia very soon.
With the Google Adwords technology, your listing is ranked according to the price you bid for each keyword (i.e. keyphrase) and the quality of your ad and it's landing page. It is a very sophisticated system with dozens of options and traps for young players. For example, careful use of "broad matching" (default) keyword feature, and related matching types, is essential it making sure you do not pay for visitors that are not likely to convert. A professional manager can certainly lower the cost per conversion through good creative advert production, careful day-to-day bid and landing page management and appropriate conversion tracking.
