Search engine marketing, or SEM, is a form of Internet marketing that seeks to promote websites by increasing their visibility in search engine result pages (SERPs). According to the Search Engine Marketing Professional Organization, SEM methods include: search engine optimization (or SEO), paid placement, contextual advertising, and paid inclusion. Other sources, including the New York Times, define SEM as the practice of buying paid search listings.
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E-mail marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fund raising messages to an audience. In its broadest sense, every e-mail sent to a potential or current customer could be considered e-mail marketing. However, the term is usually used to refer to:
- sending e-mails with the purpose of enhancing the relationship of a merchant with its current or previous customers and to encourage customer loyalty and repeat business,
- sending e-mails with the purpose of acquiring new customers or convincing current customers to purchase something immediately,
- adding advertisements to e-mails sent by other companies to their customers, and
- sending e-mails over the Internet, as e-mail did and does exist outside the Internet (e.g., network e-mail and FIDO).
Researchers estimate that United States firms alone spent US$400 million on e-mail marketing in 2006.
Pay per click (PPC) is an Internet advertising model used on search engines, advertising networks, and content websites, such as blogs, where advertisers only pay when a user actually clicks on an advertisement to visit the advertisers' website. With search engines, advertisers typically bid on keyword phrases relevant to their target market. When a user types a keyword 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 adjacent to or above the "natural" or organic results on search engine results pages, or anywhere a webmaster or blogger chooses on a content page. Content websites commonly charge a fixed price for a click rather than use a bidding mechanism.
Although many PPC providers exist, Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter are the largest network operators as of 2007. Minimum prices per click, often referred to as costs per click (CPC), vary depending on the search engine and the level of competition for a particular phrase or keyword list—with some CPCs as low as US$0.01. Very popular search terms can cost much more on popular search engines. The PPC advertising model is open to abuse through click fraud, although Google and other search engines have implemented automated systems to guard against abusive clicks by competitors or corrupt webmasters.
Pay per click campaigns can be categorized into two major categories: sponsored match (or keyword) and content match. Sponsored match campaigns involve the display of advertisements on search engine results pages, whereas content match campaigns involve the display of advertisements on publisher websites, newsletters, and e-mails.
There are other types of pay per click programs that target product or service searches and product comparison sites. Search engine companies may participate in more than one category. PPC programs do not generate any revenue solely from Web traffic for websites that display the advertisements: Revenue is generated only when a user clicks on the advertisement itself.
Cost per impression, often abbreviated to CPI, is a phrase often used in online advertising and marketing related to web traffic. It is used for measuring the worth and cost of a specific e-marketing campaign. This technique is applied with web banners, text links, e-mail spam, and opt-in e-mail advertising, although opt-in e-mail advertising is more commonly charged on a cost per action (CPA) basis.
An online advertisement impression is a single appearance of an advertisement on a web page. Each time an advertisement loads onto a users screen, the ad server may count that loading as one impression. However, the ad server may be programmed to exclude from the count certain non qualifying activity such as a reload, internal user actions, and other events that the advertiser and ad serving company agreed to not count. For online advertising, the numbers of views can be a lot more precise. When a user requests a web page, the originating server creates a log entry. Also, a third party tracker can be placed in the web page to verify how many accesses that page had. There are other advertising pricing structures, which are generally referred to as Cost Per Action (CPA) :
- CPC - Cost per click Through
- CPL - Cost per lead (lead usually meaning a free registration)
- CPS - Cost per sale
CPI and/or Flat rate advertising deals are sometimes preferred by the publisher/webmaster because they will receive a more consistent fee proportional to the amount of traffic.
Today, it is very common for large publishers to charge for most of their advertising inventory on a CPM or CPT basis. A related term, effective cost per mille (CPM), is used to measure the effectiveness of advertising inventory sold (by the publisher) via a CPC, CPA, or CPT basis.
This type of advertising arrangement closely resembles television and print advertising methods for speculating the cost of an advertisement. Often, industry agreed approximates are used. With television, the Nielsen Ratings are used; print is based on the circulation a publication has.
CPM is frequently used in advertising to represent cost per thousand (where M is the roman numeral of 1000). When used in advertising it relates to the cost per thousand page impressions.
It is important to remember that when someone says something like, "our CPM is $5," this means that the cost per impression is $0.005
Product engines (a.k.a. product comparison engines or price comparison engines) are search engines for products, and let advertisers provide "feeds" of their product databases. When a user searches for a product, links to advertisers are displayed for that particular product. More prominence is given to advertisers who pay more; however, the user can typically sort by price.
Some product engines such as Shopping.com use a pay per click model and have a defined rate card. Other engines such as Google Product Search, part of Google Base (previously known as Froogle), do not charge for the listing, but still require an active product feed to function.
The following are notable PPC product engines:
Service engines
Service engines allow advertisers to provide feeds of their service databases. When a user searches for a service, links to advertisers are displayed for that particular service. More prominence is given to advertisers who pay more; however, the user can typically sort by price or other criteria. Some pay per click product engines have expanded into the service space, while other service engines operate in specific vertical markets.
The following are notable PPC service engines:
In internet marketing, conversion rate is the ratio of visitors who convert casual content views or website visits into desired actions based on subtle or direct requests from marketers, advertisers, and content creators.
Successful conversions are interpreted differently by individual marketers, advertisers, and content creators. To online retailers, for example, a successful conversion may constitute the sale of a product to a consumer whose interest in the item was initially sparked by clicking a banner advertisement. To content creators, however, a successful conversion may refer to a membership registration, newsletter subscription, software download, or other activity that occurs due to a subtle or direct request from the content creator for the visitor to take the action.
For web sites that seek to generate offline responses, for example telephone calls or foot traffic to a store, measuring conversions can be difficult, but possible via traceable 800 numbers for example.
E-mail marketing (on the Internet) is popular with companies for several reasons:
- A mailing list provides the ability to distribute information to a wide range of specific, potential customers at a relatively low cost.
- Compared to other media investments such as direct mail or printed newsletters, e-mail is less expensive.
- An exact return on investment can be tracked ("track to basket") and has proven to be high when done properly. E-mail marketing is often reported as second only to search marketing as the most effective online marketing tactic.
- The delivery time for an e-mail message is short (i.e., seconds or minutes) as compared to a mailed advertisement (i.e., one or more days).
- An advertiser is able to "push" the message to its audience, as opposed to website-based advertising, which relies on a customer to visit that website.
- E-mail messages are easy to track. An advertiser can track users via autoresponders, web bugs, bounce messages, unsubscribe requests, read receipts, click-throughs, etc. These mechanisms can be used to measure open rates, positive or negative responses, and to correlate sales with marketing.
- Advertisers can generate repeat business affordably and automatically.
- Advertisers can reach substantial numbers of e-mail subscribers who have opted in (i.e., consented) to receive e-mail communications on subjects of interest to them.
- Over half of Internet users check or send e-mail on a typical day.
- Specific types of interaction with messages can trigger (1) other messages to be delivered automatically, or (2) other events, such as updating the profile of the recipient to indicate a specific interest category.
- E-mail marketing is paper-free (i.e., "green").
In 2006, North American advertisers spent US$9.4 billion on search engine marketing, a 62% increase over the prior year and a 750% increase over the 2002 year. The largest SEM vendors are Google AdWords, Yahoo! Search Marketing and Microsoft adCenter. As of 2006, SEM was growing much faster than traditional advertising and even other channels of online marketing.
Nielsen Online, Mega View - Search Engine Query Shares 2008
eMarketer predicts that $2 Billion will be spent this year (2008) on social network advertising worldwide and that this market will continue to grow - reaching $3.8 billion in spending by 2011. However, a large portion of this spending is predicted to be coming from the US market. As Internet usage continues to grow in other parts of the world, and social networks continue to proliferate, advertising dollars on social networking sites outside of the US will begin to play a major role.
There have been many claims that Social Network Advertising will revolutionize the online advertising market. Most famously, founder of facebook Mark Zuckerberg, announced that "For the last hundred years media has been pushed out to people, but now marketers are going to be a part of the conversation." There is no doubt that social network advertising is a significant new way of reaching customers, however the market is far from being mature.
"In general, it's been improving but we still have a long way to go. Things have been going well this year...it's hard to predict where social networking will come out." - Sergey Brin (Google Co-Founder)