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Media and Communications

Online Ads 101: Search ads

Online Ads 101: Search ads

Search ads appear on the results page of a
search engine. For example, if you search for “hawaii vacation
homes” you’ll see your results in the middle of the page. These are called organic search
results. The paid results or ads show at the top of
the page and down the right side. You won’t see just any ad in the search results. The idea is to let advertisers tell you about
their product when it’s related to what you’re searching for. This is great for advertisers
and keeps your search results relevant. Here’s how it works: The advertiser picks key words or phrases
that someone might enter when searching for something similar to their product or service.
In this example, those keywords might be things like After figuring out which keywords they want
to appear next to, the advertiser sets a bid on each them. “Bid”? Yep: this is pretty much like an auction
– if you really want something, you’re willing to pay more. If it’s not something you’re
so keen on, you might not even bid. Similarly, advertisers set limits on how much
they are willing to pay for a click for each keyword. Once they have their keywords and their bidding
strategy, they create a text ad like this. The advertiser then enters into an auction
with other advertisers who also want their ads to show on the same search terms. To win the auction, the advertiser’s bid and
the relevance of their ad are taken into consideration. The advertiser with the best combination will
show in the top spot, the second in the next, and so on. Really, search is pretty exciting. Each and
every time there’s a search, there’s a real-time bidding war happening for that ad space. So the next time you click on a search ad,
pat yourself on the back. You just made someone a winner.

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