Search Engine Marketing
Called search engine marketing, search engine advertising, or pay per click; it is those ads you see beside search engine results at sites like Google, Yahoo, and Bing. Basically, advertisers create ads that can trigger whenever someone searches for a particular phrase. The ads are ranked based on a number of factors including the maximum bid; the ads click through rate, the landing page and other "quality" factors. If a user clicks the ad, the advertiser pays the search engine the agreed upon amount.
What makes this form of advertising so attractive is the degree to which the ads can be targeted and then tracked. Based upon the IP address of the person conducting the search, a business can choose to display ads only within specific geographic parameters. Also, because the user sees the ads only when conducting a relevant search, your advertising is delivered to its target when the target is actively seeking such information. In a nutshell, when properly configured, your ads are delivered to the right place at the right time.
Most advertisers assume incorrectly that the ads are ranked solely based on the bid amount. Years ago, Google started to rank ads based on what they called a "quality score" and since then Yahoo and MSN's Bing have adopted similar ranking structures. The quality score takes factors other than the bid into account such as the quality of the ad copy, the relevance of the landing page and the click thru rate. This means that those advertisers who take the time to right quality ads can save money.
All of the major search engines have implemented conversion (goal) tracking. It is very easy to determine whether or not a user who clicked an ad has gone on to perform some action on the site such as making a purchase or filling out a request for information. Advertisers can then look at the cost per conversion of different keywords and either adjust or eliminate poor performers.