Sponsored Links (Sponsored Listing, Paid Listing)
Sponsored links are paid ads on the results pages of search engines. By far the largest three providers of sponsored listings, which are also referred to as paid listings, are Google, Overture and Miva (previously Espotting). The most well-known example is probably Google AdWords, through which you can buy a position on the front Google results pages with cost-per-click for certain search terms.
How Does Sponsored Listing Work?
If a user submits a search query in a search engine, the ads that are suitable for the keyword are displayed above or to the side of the natural search results. In addition, appropriate advertising can also be provided on the partner sites of the search engine (by analyzing site content). Examples include Google AdSense and Overture Content Match.
Billing is usually based on the CPC model. CPC stands for cost-per-click and means that you only pay for the ad if someone clicks on it.
For an advertising campaign various factors have to be taken into account, and here are some examples for Google AdWords:
- Target group (language and region)
- Advertising copy
- Landing pages (destination pages)
- Search terms and keyword clusters
- Maximum CPC per search term or cluster
- Maximum daily budget
How Are Ads Ranked?
In the case of Overture and Miva the sequence of ad ranking is solely dependent on the price you are prepared to pay per click. With Google AdWords it also depends on the quality of the advertising campaign, which is measured by the Click Through Rate (CTR), among other factors. The CTR describes the relationship between the number of ad impressions and the number of clicks. Another factor in the case of AdWords is the quality of the landing page, i.e. the page to which the ad is linked.
Optimization Options
The optimum selection of search terms and appropriate keyword clustering lay the foundation for an advertising campaign. The click rate (CTR) can be optimized by structuring campaigns systematically, defining target groups accurately, and formulating advertising copy in an appealing way. That reduces expenditure and increases the cost-effectiveness of ads.
Performance Monitoring / Conversion Tracking
The major advantage of online advertising is that it achieves quantifiable results. That is why one important factor is the performance monitoring of campaigns - so-called conversion tracking. A conversion is registered when an ad click leads to a transaction which the advertiser considers desirable. For example, it can be a visit to a certain page, a contact inquiry, a newsletter sign-up, or the submission of an order. In this way you can always keep a check on how much success you are achieving with which ads and keywords and how much it is costing.
