This document provides an overview of search engine marketing (SEM). It defines SEM and discusses the importance of search engines in driving website traffic. SEM involves both search engine optimization (SEO), which influences organic rankings, and search engine advertising (PPC), which involves paid text ads. Key factors in SEO include keywords, links, and content while PPC involves bidding on keywords. Non-linear search behavior and short searches are also covered. Overall SEM aims to match websites to customer intent based on keywords and drive qualified traffic and sales.

1. SEARCH-ENGINE MARKETING
Joni Salminen
29.10.2015
Oulu University
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2. DEFINITION AND
SIGNIFICANCE
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3. 4 reasons why search engines are important
1. They are information gatekeepers (most website
information is indexed by them; we want to be
indexed as well)
2. Huge search volumes (1.2 trillion searches in 2012)
3. Consumers often start information retrieval
(purchase process) by online searches
4. Keywords give information about customer intent
(remember, marketing is about matching supply and
demand).
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4. The importance of search-engines in driving
website visitors (ElämysLahjat.fi)
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Google = ~70%
of visitors
All visitors
The ”2/3 rule”

5. Market shares of search engines (2014)
• Google is a natural monopoly in the Western world (70-90%)
• elsewhere Yandex (Russia) and Baidu (China)
• when you optimize for Google, generally speaking it works also
for other search engines. (Because they imitate Google.)
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6. Google is an engineering miracle
• In 1999, it took Google one month to crawl and build
an index of about 50 million pages.
• In 2012, the same task was accomplished in less
than one minute.
• 16% to 20% of queries that get asked every day
have never been asked before.
• Every query has to travel on average 1,500 miles to
a data center and back to return the answer to the
user.
• A single Google query uses 1,000 computers in 0.2
seconds to retrieve an answer.
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Source: InternetLiveStats.com (2015)

7. What is search-engine marketing (SEM)?
Search-engine marketing (i.e., Google marketing)
utilizes the Web’s search engines to drive visitors
into a chosen website.
a. The marketer’s goal is to find economically feasible
keywords and rank as high as possible with them.
b. To achieve that, a search-engine marketer has to
know the both the search behavior of his target
audience and the operating principles of his target
search engine.
c. Because ranking algorithms rely at least partially on
user behavior, it can be said that search-engine
marketing requires understanding of search engines
and users.
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8. The sub-areas of SEM
• Search-engine marketing is divided into two fields:
a. Search-engine optimization (SEO) = influencing
the natural (organic) ranking of a website in a
search-engine results page (SERP).
b. Search-engine advertising (PPC) = text advertising
in a SERP in relation to sponsored results.
• In other words, SEO aims at increasing organic
traffic (=free website visitors), whereas search
advertising paid traffic (=payment for clicks).
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9. Search-engine result page (SERP)
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Ads
(search
advertising)
Organic
results
(search-engine
optimization)

10. How does a search engine work?
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Index
SERP
(results)
Ads
$
$
$
$
Search query…
1.
2.
3.

11. PageRank (Brin & Page, 1998)
• PageRank is a fundamental part of Google’s ranking
algorithm
• The idea is simple: the number and quality of inbound
links influence search ranking
• PageRank value of a given website is expressed as
in which PageRank of page u depends on the sum of
PageRank values from linking sites v.
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𝑃𝑅(𝑢) =
𝑃𝑅(𝑣)
𝐿(𝑣)𝑣∈𝐵 𝑢

12. PageRank (W3.org, 2005)
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Marketing implication: acquire links from
pages with high PR value (scale: 0-10).

13. Development of search engines (Fishkin, 2009)
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Aika
Google Algorithm Change History (Moz)

14. Google’s algorithm: Hummingbird
(Sullivan, 2015)
Some components of Hummingbird:
• PageRank: link authority
• Panda, Penguin: spam identification
• Pigeon: local results
• Top Heavy: demoting ad-cluttered sites
• Mobile Friendly: lift mobile-friendly sites
• Pirate: copyright infringement identification
• RankBrain: machine learning (3rd most important)
These components, and others, produce signals which are
joined to output a list of websites in a ranking order by their
relevance to a given search query. (There are “hundreds” of
signals.)
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15. Knowledge Graph (Sullivan, 2015)
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16. Google’s algorithm is constantly updating
(CognitiveSEO, 2014)
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17. SEARCH BEHAVIOR
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18. Google’s influence on human beings
1. Using Google may weaken memory (Sparrow, Liu
& Wegner, 2011)
– there is no need to remember things by heart, when
the cost for information seeking is so small
2. Information retrieval is often started in Google, not
e.g. by asking friends (Griffiths & Brophy, 2005)
– on the other hand, referrals and word-of-mouth
(eWOM) have remained important in online
environments
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19. The relationship between search engines
and purchase process
a. Targeting is based on intention/motive
– it is known (or deductable) what the searcher is
looking
– it is possible to choose keywords that indicate a high
purchase motivation
b. Results (incl. ads) answer to search query
– they provide use, not irritation
– the purpose of marketing is completed: matching
demand with supply
For the above reasons, there is a digital marketing ”Law
of nature”: Google Ads typically generate more than 10x
better results than display advertising.
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20. Google’s first result receives up to 33% of
clicks (Chitika, 2013)
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21. Almost all clicks originate from the 1st page
of Google. Rather than clicking second page,
users refine their query if the 1st page does not
provide the answer. (Chitika, 2013)
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22. F pattern (aka Google Golden Triangle)
(Nielsen, 2006; Enquiro, 2008)
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Individuals scan Web sites,
like SERPs, in a pattern
similar to letter ’F’.
All text is not
read.
Rank here!

23. Linear search behavior
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”As marketers, we tend to think of
the search process as a linear one.”
(Hotchkiss et al. 2003)
Query Results Site Conversion
Classical process models:
AIDA (Lewis, 1899)
• attention
• interest
• desire
• action
ACCA (Colley, 1961)
• awareness
• comprehension
• conviction
• action
CAB (Howard, 1963)
• cognition
• affect
• behavior

24. Non-linear search behavior
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• the search process
involves switching back
and forth between
search engine and
websites
• the user makes
comparisons, refines
search query
• search engine
represents a base where
the user always returns
to make new, improved
searches
”In reality, we see the typical
pattern is quite different.”
(Hotchkiss et al. 2003)
Back
Site 5
Back
Back
SERP 1
Site 10
Site 9
Site 8
Site 7Site 6
Site 4
Site 3 Site 2
Site 1Query 1
SERP 2 Query 2 Query 3 Results 3
Main points:
Implications:
• make a positive
impression during the
1st second
• reduce the barrier for
1st action (clear CTA)

25. Search engines and purchase process
(Enquiro, 2005)
• Search engine is used to find product information and
compating products
• In which stages? (% of respondents)
– Awareness (discovering new products) 8.7%
– Consideration (conducting research to learn about
product qualities) 68.3%
– Purchase decision (comparing prices & shops) 42.6%
– Purchase action (searching for a shop) 28.2%
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”If there was a high level of
familiarity, the searcher
would often bypass search
engines and go right to a
vendor’s site.”
Advantage of a
strong brand

26. Length of searches (OneStat.com, 2006)
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 Almost all searches contain multiple words
 In addition, ~15 % of searches are previously
unknown to Google (Google, 2014)

27. Conclusion
1. No 1 position in SERPs is highly desirable; up to 1/3
of searchers click the first result, and the difference to
the following result is remarkable
2. Click-through rate rapidly declines in lower positions
on the SERP (cf. below the fold, F pattern)
3. After 10th position clicks fall close to zero (second-
page syndrome)
However, the optimal position for a given keyword
is not always 1.
Why?
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28. SEARCH-ENGINE
OPTIMIZATION
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29. Defining SEO (Wikipedia, 2012)
”Search engine optimization (SEO) is the process of
improving the visibility of a website or a web
page in search engines via the ‘natural,’ or un-paid
(‘organic’ or ‘algorithmic’), search results. In general, the
earlier (or higher ranked on the search results page),
and more frequently a site appears in the search results
list, the more visitors it will receive from the search
engine’s users.”
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“Optimizing a website may involve editing
its content and HTML and associated
coding to both increase its relevance to
specific keywords and to remove barriers to
the indexing activities of search engines.
Promoting a site to increase the number
of backlinks, or inbound links, is another
SEO tactic.”

30. Three pilars of SEO (DeMers, 2013)
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CONTENT
LINKS
SOCIAL

31. SEO is divided into two sub-areas
a. On-page optimization (e.g., technical SEO, content
production)
b. Off-page optimization (e.g., link building)
The first step, however, is always keyword research
(internal and external).
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32. SEO is manipulation of Google?
It can be dangerous, indeed…
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33. White hat or black hat?
“Manipulating Google results shouldn’t be something you feel
entitled to be able to do. If you want to rank highly in Google, be
relevant for the user currently searching. Engage him in social
media or email, provide relevant information about what you’re
selling, and, generally, be a ‘good match’ for what the user
wants.” (Google, 2012)
• Link farms, cloaking, fake content, etc.
• Warning cases:
– Expedia
– Rap Genius
– BMW
(“Cat and mouse”; Google changes the algorithm
hundreds of times per year.)
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34. The power of Google

35. Copywriting, keywords and SEO
“Many marketers like to embellish products to make
them seem grander than traditional fare. But customers
define their needs in known terms, so be sure to use
them, even if you don’t think they’re exciting. The very
fact that a word is unexciting indicates that it’s frequently
used. People search for terms like ‘cheap airline tickets,’
not ‘value-priced travel experience.’ Often, a boring
keyword is a known keyword.” (Nielsen 2006)
• Being good for the user is being good for
Google! (No marketing bullshit, please.)
• UFO: user-focused optimization (Dang, 2013)
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36. SEARCH ADVERTISING =
BUYING CLICKS FROM
GOOGLE OF VISITORS WHO
ARE SEARCHING WITH
SPECIFIC KEYWORDS
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37. Google advertising
(AdWords) is an auction in
which you bid for keywords.
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So-called second-price Vickrey auction
(hidden bids), in which the outcome is
decided not only by bid amount but quality of
ads (Quality Score) (Midha, 2008). A
massive innovation in online advertising
riddled with crappy ads.

38. An example of AdWords (PPC) account
structure
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Campaign: Laptops
Ad Group: Dell Ad Group: Apple
Ad: Buy Dell laptop.
Lowest prices
guaranteed.
URL: www.store.
com/Dell-Laptops
Keywords: buy dell
laptop
Campaign: Mobile phones
Account
Ad: Buy Macbook.
Available now,
delivered by
tomorrow.
URL: www.store.
com/Apple-Laptops
Keywords: buy
macbook
Ad Group: Nokia Ad Group: Apple
Ad: Buy Lumia 1020.
Free case with all
purchases.
URL: www.store.
com/Lumia-1020
Keywords: buy lumia
1020
Ad: Compare iPhone
prizes. All models.
URL: www.store.
com/iPhones
Keywords: iPhone
prices

39. How to select the keywords? Two
alternative keyword strategies.
a) Generic keyword strategy = selecting general
keywords; the problem is popularity/competition
which drives up prices (necessity to track
profitability).
b) Long-tail strategy = selecting very specific
terms where low competition; the problem is
limited volume (possibly solvable by escalating to
thousands of variations).
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40. A lot of the academic research focuses on
optimal bidding strategies. That is, how to
determine the CPC levels?
a) Minimize CPC: the cheapest possible clicks
b) Maximize visibility: the highest possible ad position
and impression share
c) ROI-adjusted bidding: settings bids according to
cost per conversion
d) Profit-adjusted bidding: settings bids according to
profitability (incl. margins).
Different companies have different goals; therefore,
there is no universally optimal bidding strategy.
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41. CONCLUSION
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42. SEO vs. PPC – which is better?
A company usually maximizes its performance by
investing into both, but because we live under scarcity
let’s examine this as a trade-off.
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SEO PPC
+ - + -
”Free” (if done by
yourself and w/o
value for work)
Requires manual
work and know-how
Results
(visitors/sales)
NOW
Each visit costs (the
CPC)
Lifetime of
content (long-
lasting results)
Results don’t show
instantly (3-6
months)
Targeatability
(GEO, device,
etc.)
Short-term effect (as
soons as you stop
paying, it’s off)
Richness of
organic content
(long-tail effect)
Difficult to attribute
credit to actions
Clear
measurement of
performance
Ad resistance (e.g.,
ad blockers)
Authencity (higher
trust for organic
results than paid)
”Fear of algorithm”,
lack of technical
skills
Easy to
understand and
get started
Worse credibility than
organic results
Competition over
popular keywords
Competition over
popular keywords

43. Limitation in SEM: The natural boundaries
of search traffic
a. At a moment t there is a finite number x of searches.
b. When ROI of SEM fulfills economic goals, the
optimal strategy for an advertiser would be infinite
budget, but due to the natural limit of search volume
for a set of given keywords, the optimum cannot be
reached
c. In practice, the advertisers needs to 1) allocate
resources to other, less profitable marketing
channels, and 2) aim at increasing search volume
(brand searches, category searches)
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44. ”Good brand building is the best form of
search-engine marketing.”
Why?
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45. Learn more about SEM
• Blogs:
– Matt Cutts: https://www.mattcutts.com/blog/
– MOZ: http://www.moz.com/blog
– PPC Hero: http://www.ppchero.com/
– Search Engine Land: http://www.searchengineland.com
– Search Engine Watch: http://searchenginewatch.com/
• PageRank checker: http://checkpagerank.net/
• Change history of Google’s algorithm:
http://moz.com/google-algorithm-change
• List of many ranking factors in Google:
http://backlinko.com/google-ranking-factors
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46. Google is not the only search engine…
• Amazon, eBay – to get your products found
• LinkedIn – to get job and collaboration offers
• Youtube – to get your videos found
• Twitter – to be found with trending topics
• Spotify – to get your music found
• App Store – to get your app found (ASO)
• Whenever there’s a search page, the participants get
ranked
• The general SEO principles apply (headline,
description text, keywords)
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47. ADVICE FOR STUDENTS: Instead of going
out on Friday night, stay home and spend
your bar money (50€) on AdWords.
I guarantee, it’s one of the best investments
you’ll make.
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48. How to get started?
1. Open AdWords account (www.google.com/adwords)
(It’s free, but you need a credit card.)
2. Follow the steps and create a campaign!
3. Define campaign keywords
4. Write campaign ads
5. Define your daily budgets
6. Let it go live.
7. After a week, check back to see the results.
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49. Thank you!
• Slides available in Optima (later today)
• Add me in LinkedIn: http://fi.linkedin.com/in/jonisal
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