Search Engine Advertising forms the second pillar of Search Engine Marketing (SEM) alongside Search Engine Optimization. SEA comprises the fee-based booking of text or image ads in the result pages of search engine providers (such as Google or Bing).
In order to book advertisements, bids can be placed on fixed keywords (the best-known provider for this is Google Ads). In this way, the targeted presentation of thematically suitable pages is guaranteed and scatter losses are reduced. The booked ads are placed in a highly visible area (in Google) above the organic (unpaid) search results.
The costs for the ad booking are billed according to various models. The best-known billing model is cost per click (CPC).
The advertiser pays when the user clicks on the ad. The costs for this depend on the competition over a keyword, the positioning of the ad and the so-called quality factor. The latter is influenced by factors such as the click rate for the keyword, the URL displayed or the quality and relevance of the target page.
The maximum CPC is then multiplied by the quality factor. Consequently, the ad with the highest result appears at the best position on the search results page.
There are also other booking models available:
CPA (cost per acquisition): The company pays when the user makes a conversion (e.g. purchase or newsletter subscription).
CPM (cost per mille, also called thousand contact price): The company pays a certain amount for every 1,000 impressions of the advertisement.
Cost per call: The company pays when called by the user via the ad.
Another factor that can influence the position of the ad are bids from competitors. If a competitor has a better bid-quality factor combination, they will reach a better (higher) position, which automatically reduces the visibility of their ads. Therefore, the competition is also a factor for the cost and visibility of SEA ads.
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