Top of Google: Search Engine Advertising (SEA) Explained

Online marketing is an important, if not the most important, marketing channel for almost every brand. An ever-increasing portion of the customer journey takes place online. McKinsey even concludes that this has accelerated due to the Covid-19 pandemic. Buyers not only research online, but an increasing part of the actual sales process also takes place online.

In this article, we focus on an important aspect of online marketing: search engine advertising. This channel is valuable for brands taking their first steps in online marketing because it allows them to appear at the top of search results immediately. Results from long-term initiatives like Content Marketing and SEO usually take longer to materialize. But even for brands that have been active online for years, search engine advertising is an important tool.

What is Google Ads?

Google’s search results – the Netherlands’ largest search engine with about 95% of searches – can be divided into two categories:

• Organic search results
• Paid search results

Organic search results are the results that best match the search query according to the Google algorithm. People work on the positioning of their website in this category through SEO and Content Marketing.

Paid search results are the advertisements of brands that pay the most to appear there. For a specific search query, for example, ‘mortgage application,’ companies pay a certain amount to be visible to the searcher. Prices range from around €0.30 cents per click to as much as €100 or even more for highly valuable search queries.

Google Ads is Google’s platform for selling advertisements in its search results and, therefore, the go-to tool for Search Engine Advertising (SEA). There are few markets where it is effective to advertise in other search engines.

How does Google Ads work?

Google Ads is a seemingly simple program with a vast depth, making it easy to get started with (and explain), but it’s a specialized skill to use it optimally. However, even getting started with Google Ads requires some explanation.

In Google Ads, users enter a keyword and a corresponding bid. When someone uses that keyword, Google looks at all available bids and places the ads of brands that bid the most alongside the search results. This also means that your ad won’t be displayed if you bid €1 but at least three competitors bid at least €1.10.

At the same time, Google Ads operates with a daily budget, the amount in Euros that you want to spend on buying ads each day. When the budget is exhausted, your campaign automatically stops purchasing ads. In practice, it’s not uncommon for the highest bidder’s budget to run out halfway through the day. So, who gets the best deal then?

Long-tail keywords in search engine advertising

But that’s talking about competition on a single keyword. What happens when people bid on different words that appear in one search query?

For example, if you search for ‘mortgage,’ you might see ads from price comparison sites, advisors, and banks. Then, if you search for ‘mortgage application,’ you might see completely different names. A brand that bids on ‘mortgage’ will also appear for the search term ‘mortgage application’ unless you explicitly indicate otherwise. But how does Google determine who appears at the top?

Google wants to sell as many clicks as possible. Therefore, the algorithm does its best to estimate which ad has the highest click-through rate. And for Google, the more specific, the better. Someone who bids separately on ‘mortgage application’ probably has a better offer than someone who advertises only on ‘mortgage.’ Additionally, Google also uses a quality score for both the ad and the landing page to reinforce this further.

In summary, search engine advertising is a complex and often opaque auction system with many different factors at play. Therefore, SEA is often part of our online marketing services (link). Clients often lack the time or expertise to use this tool optimally.

Explaining Display Ads

After you’ve searched for “refrigerator” on Google, you often encounter ads for the refrigerator you just viewed, for example, on a site like Nu.nl. How does that work? These are called Display Ads.

Google stores recent search queries using cookies. Companies can leverage this information to place ads on sites you visit after your visit to Google. Such a campaign is typically bundled together with your search engine campaign and can improve results. An additional benefit is that, unlike search engine ads, you can use images and banners, making your brand stand out even more.

Because banners and other Display ads generally have a much lower measurable return on investment compared to search engine ads, Display Ads are relatively inexpensive. In some cases, they cost as little as 10% of the price of a click in search results. Therefore, Display Ads are a welcome addition to the SEM strategy for many brands and a way to keep their brand in the spotlight at relatively low costs.

Costs of Advertising on Google

The costs of advertising on Google are determined by two factors:

1. Budget and maximum cost per click
2. Costs for creation, optimization, and administration

The first factor is straightforward: how much do you want to spend on search engine advertising? SEM tools allow you to specify your budget and maximum cost per click down to the cent, so you’re never in for surprises.

Allocating a budget to search engine advertising is a crucial consideration. The best approach is to work backward from how much a visitor is worth to you. How many people do you need to bring to your website to sell your product or service, and what is the return on investment? If you need 100 visitors to your webpage to sell 1 product with a margin of €500, theoretically, you could afford to pay up to €4.99 per click.

Setting Up a Search Engine Advertising Campaign

Additionally, you have to factor in the costs for creation, optimization, and administration. Many brands hire companies like Merkelijkheid to manage their search engine advertising. They realize that by properly maintaining and optimizing the campaign, they can achieve better results and lower costs while requiring minimal time investment.

Merkelijkheid offers search engine advertising as part of our online marketing services. We provide a comprehensive package where our clients receive regular but concise reports, allowing them to maintain control over this marketing channel.