Search Engine Advertising (SEA)

Search engine advertising (SEA) is a subsection of search engine marketing and is therefore part of online marketing. Search engine advertising covers the area of paid advertisements that are primarily displayed on the results pages of search engines such as Google.

What is Search Engine Advertising

It is not only with organic results in search engines that website operators reach users and potential customers. There is also the option of placing paid ads that are played out on the search engine results pages (SERPs) to match the search terms and characteristics of the users. While organic search results can be influenced using techniques that fall under the heading of search engine optimization (SEO), paid advertisements belong to the field of search engine advertising or search engine advertising.

In order to be able to design and place advertisements in search engines, website operators register with advertising or ad networks. These networks organize the display and regulate the prices, design and visibility of the ads. One of the best-known networks is Google AdWords.

Website operators use advertisements to generate a higher reach of their own website with the desired keywords. Based on the user data collected by Google, the ads are played out to suit the respective target group. This means that website operators are very likely to reach the right users and customers with their advertising. Google also places the ads in a highly visible position above the organic search results or directly next to them.

Although the snippets are marked as ads, they look very similar to the organic search results. As a result, searchers perceive search engine advertising as advertising only to a limited extent and are more likely to click on it.

Visibility and position factors:

Where and how often an ad appears in search engine results depends on various factors. With Google AdWords – exemplary for most networks – the advertising spaces for each keyword are auctioned off in a kind of auction. However, the winner is not necessarily the one who offers the highest price, but also the one who can deliver the most suitable website for the desired keyword.

Google determines a “quality factor” of the bidding websites for this purpose. The network checks how relevant a website and its ad are with regard to the desired keyword and how users have reacted to this website in the past. Did they leave the domain after the click without further action (high bounce rate)? Did users stay on the page for a long time (high dwell time)? Or did a website even lead the user to a conversion? Google ranks the page based on such factors with a value between 1 (irrelevant for this keyword) and 10 (highly relevant for this keyword).

In addition, the network gives bidders a price recommendation for the desired keywords based on empirical values. In the past, highly contested and frequently clicked keywords are usually more expensive than less contested ones. Advertisers place their bids based on this recommendation. Google finally multiplies this bid by the “quality factor” and thus determines the winner of the auction. The winner’s ad is played out most frequently and/or in the best position.

The keyword “shoes” has an average monthly number of 165,000 search queries. It is highly contested and Google suggests a bid price of 80 cents (per click on the ad) for it.

A website (A) with a quality factor of 5 would get an AdRank of 4 with this bid (5 x 0.8). A website (B) with a quality factor of 10 would achieve an AdRank of 8 (10 x 0.8). Website A would therefore have to bid at least €1.61 to win the bid for the best advertising space (5 x 1.61 = 8.05).

Targeting factors:

The keywords searched for form the basis for the ads played out in the SERPs. If a user searches for the keyword “shoes,” he or she will be served ads that promote shoes.

In addition to the keywords, however, there are other factors that Google takes into account when playing out the ads and for which the advertiser can increase or decrease his bid. The most important targeting factors include:

Language: Google takes into account the language of the searcher and accordingly only plays ads in the local language.

Location: depending on the country, state or city, ads may pay more or less. For example, a marketer can bid more for his ad campaigns if he wants them to be displayed more frequently or more visibly for searches in Berlin.

Times of day and week: Google can play ads more frequently or less frequently on certain days of the week or at certain times of the day. Here, too, the advertiser can influence this with his bid.

Remarketing lists: In remarketing, users are advertised to differently depending on how they have behaved in the past. For example, a user who has visited a certain website may receive different ads than a user who does not know this site. Advertisers can also take this targeting factor into account in AdWords.

Cost accounting in SEA:

Online ad billing can vary. The bids in Google AdWords, for example, represent the maximum price that the advertiser is willing to pay per click on the ad. This means that costs (in the amount of the bid submitted) are only incurred when a user clicks on the ad.

Overview of different billing models:

  • Cost-per-click (CPC): the advertiser pays a set amount each time a user clicks on the ad.
  • Cost-per-acquisition (CPA): The advertiser pays a fixed amount each time a user triggers a specific conversion.
  • Cost-per-mille/Cost per thousand/Thousand contact price (CPM/CPT/TKP): The advertiser pays for every 1000 impressions in the Google Display Network (see below).
  • Cost-per-view (CPV): The advertiser pays each time a video is viewed or interacted with (e.g. a click on a call-to-action in the video).

While SEA thus incurs costs, SEO measures are generally free of charge. However, costs can arise here if agencies make their special expertise and software available for a fee.

SEA tools >> More SEA Tips

In the context of search engine advertising, many helpful tools and programs exist that marketers can use to monitor, optimize or expand their SEA measures. The following are some of the most important:

KeywordPlanner: The Google KeywordPlanner is used to identify suitable keywords for one’s own campaigns. It offers the possibility to view the traffic, competition and costs for keywords on Google. In addition, users receive new keyword ideas here or can expand existing keyword ideas.

Google Analytics: Google Analytics plays an important role in SEA. With the help of the Google tool, the accesses via the paid ads in the SERPs can be monitored. Google Analytics also gives Google access to values such as the bounce rate or the length of stay on websites. The search engine provider uses these values, among other things, to determine the quality factor of a website.

AdWords Editor: The AdWords Editor makes it easy to edit and adapt AdWords campaigns.

Bid and campaign management tools: Bid management tools like Marin make it easy to manage campaigns and bids in programs like AdWords.

Market and competitive tools: Tools such as comscore can be used to analyze digital markets and competitors and optimize your advertising efforts.

SEO/SEM tools: Various SEM or SEO tools such as Searchmetrics, Ryte or SEM-Rush offer functions that can be used to check and analyze search engine advertising and SEA campaigns.

Display ads (AdSense, Google Display Network and Display Planner): With the help of the AdSense network, advertisers can play ads (display ads) on the websites of participants in the program. The participating website operators receive a predefined fee for this.

Display ads are not directly part of search engine advertising. However, AdSense is linked to AdWords and can be controlled from there, for example with the Display Planner. The platform for managing AdSense is the Google Display Network.

There are also various display formats in social media such as Facebook or Twitter that are comparable to Google AdSense display ads. In exchange for payment, usually CPC, various social media providers play suitable ads to users.

Ad texts:

Ad texts on Google AdWords and Co. follow certain specifications and design guidelines. In addition, many tricks exist that make writing an ad text special.

Usually, the ads consist of a headline, the text and a URL. Besides that, the snippets can also contain extensions like sitelinks, reviews or phone numbers. Upon clicking on the ad, the user is directed to a specially crafted landing page or any other website of a domain.

Along with SEO, search engine advertising is another part of search engine marketing and is thus classified as online marketing. Website operators can use various networks to place paid ads on the search results pages and thus attract (new) users to their site. The ads are displayed in line with the user’s search queries.

One of the largest networks is Google AdWords. Here, an auction is held to decide who gets the best ad spaces. The decisive factor is not only the bid of the interested parties, but also their quality with regard to the respective keyword. Google determines the quality factor of the website for this purpose.

The costs for the advertisements are settled in different procedures. Frequently, advertisers pay for each click on the ad (cost-per-click/CPC).

Various tools are available to monitor and analyze all SEA measures. As the provider of one of the best-known advertising networks, Google, for example, offers website operators various programs, such as KeywordPlanner or Google Analytics, to make search engine advertising as effective as possible.


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