Search Advertising

Search ads appear in search engine results e.g. Google "baseball memorabilia" or Yahoo search "baseball memorabilia.

Marketers pay search sites to put ads in search results—can be very cost-effective. Only motivated buyers (who are searching for something) see the ad. Ad dollars are not wasted on people who are not interested. In “pay per click” ads, the marketer only pays when someone clicks on the ad. Presumably this person is motivated buyer. If so, using search advertising leads to higher conversion rates and lower customer acquisition costs. More specific searches can be even more valuable e.g. location-specific searches like Googling "scooters Greenwich CT".

According to a MarketWatch story about Microsoft's bid for Yahoo search engine ads account for 41% of the online advertising market. Google dominates the search advertising market with a 63% share as of January 20091. Google AdWords allows marketers to bid for key words—the highest bidder has a greater chance of top ranking in the paid search results.

In February 2009 Yahoo! introduced graphics and video into search engine results.

Weaknesses

  • Cannot influence people who are not actively looking
  • Little use for brand building
  • Marketers cannot easily influence the search process
    • People may search for “Home Depot” when you want them to search for “plumber in White Plains NY”
    • You could pay for all possible search words but that would get expensive
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