Search Engine Advertising For Small Businesses: A Guide

Topics in this post:

• Goals For Search Engine Advertising for Small Businesses
• How Much Should I spend on Search Engine Advertising?
• Who Should Use Search Engine Advertising?
• Localized Ad Copy & Extensions
• What Are The Primary Targeting Options For Local Search Engine Advertising?
• How Does Google’s Quality Score Work?
• How Do You Find The Right Keywords To Use?
• Tracking and Measurement for Search Engine Advertising Campaigns

Search engine advertising for small businesses is the lifeblood of many small businesses’ online marketing campaigns. Every day there are over 5 Billion searches done on Google, and the number is growing everyday. While search engine optimization (SEO) works to improve the visibility of your website organically in the free listings based on keyword searches, search engine advertising allows you to directly insert your paid advertisement into the search results on Google, Bing, or other platforms for a fee via pay-per-click (PPC). Search engines allow you to pay for your keyword search position by placing the advertisement above, beneath, or next to the search results. Google’s AdWords platform is so dominant that most discussions surrounding paid search are likely related to Google’s services, though the cost to advertise on their platform is often greater than other platforms available.

In principle, it doesn’t actually cost anything to place an advertisement within the search results for your selected keywords. Search engine advertising works on a cost per click (CPC) basis, therefore advertisers will only incur charges after a user clicks on an ad and is redirected to the landing page. The frequency that an advertisement is displayed will be dependent on the bid size when compared with other advertisers competing for the same space via keyword lists.

When the search term contains a commonly occurring keyword, there can be several potentially suitable ads to display, which are then rated in order of their relevance in a split second before the page is displayed. One important criterion in selecting the ad is the CPC bid offered by the advertiser; however, the quality of the advertisement must be taken into account so the search engine can create the most useful results for each user. A highly ranked ad (in terms of quality score) is more likely to be shown in the primary positions during a relevant search.

Search engine advertising offers small business owners the opportunity to place advertisements on search engines at the moment potential customers are looking for their desired products and services. Search engines insert advertisements above relevant search queries, rather than overload the user with low quality or confusing information.

Since the highest ranking ads are the most relevant to the user’s keyword search, search engine advertising is accepted by the majority of search engine users as useful. Search engine advertising can be an effective method to increase your small business website traffic, promote your products and services, elevate brand recognition, and most importantly, to generate more revenue.

Goals For Search Engine Advertising for Small Businesses:

The main goal of your search engine advertising for your small business should be to increase revenue, but the micro goals can be broken down into the following:

• Driving Phone Calls: For most local businesses, phone calls are the key metric for local search engine advertising campaigns, you want to make sure you have custom tracking numbers setup specifically from your local search engine advertising campaign
• Website Form Submissions: Most local businesses have online forms on their website and since these days more people are filling out forms or engaging in an online chat, this is a key metric that should be a goal and also tracked through analytics and your online reporting profile.
• Increase website traffic: The core objective of search engine advertising is to direct a stream of visitors to a website. In a fight for the top spot, the ads are ranked by quality and relevance, but their place on the first results page can also be secured through a high bid.
• Promote brand recognition: Search engine advertising is an effective marketing instrument for enhancing a brand’s visibility amongst others in its field. One goal of an SEA campaign should, therefore, be to occupy keywords services with advertisements for your own product lines or services.
• Generate sales conversions: Above all else, search engine advertising pays off when it contributes to gaining potential customers (leads) or to the increased sale of products and services. Advertising programs such as Google AdWords make it possible for website owners to determine exactly how frequently search engine ads lead to conversions, as in when a potential customer becomes a customer.

How Much Should I spend on Search Engine Advertising?

The amount you should spend should be based on your long-term customer value (LTCV) and short-term customer value (STCV) and your target cost per customer acquisition or cost per sale.

• Short-Term Customer Value: this can be the value of a customer based on what the average one-time transaction is or the monthly transaction of the customer.
• Long-Term Customer Value: this is based on what the lifetime value of a customer value is and what the referral value of the customer is to your business. If 50% of your business comes from a previous client referral, then your long-term customer value is much higher because you also need to take into consideration that your customer that you acquired from a search engine campaign is also going to refer someone to you later, you have an additional value for that new customer acquisition.

To determine your daily and monthly budget, Google has budget and traffic estimator tools based on the keywords you want to target as well as the geographic areas you want to target. These tools will give you a general idea of how much search inventory there is for you to buy and what your possible budget should start out with.

Who Should Use Search Engine Advertising?

A successful search engine advertising campaign does not depend on the size of the business, but businesses with a bigger budget allocated to paid search can explore more growth opportunities quicker, giving them a competitive advantage. The location, products, and advertising budget will be the largest factors in determining the success of a paid search campaign. Smaller companies should be mindful to only use search engines advertising when they will be able to generate a profit or learn something valuable that will help drive sales in other areas.

Small business owners who are considering investing in search engine marketing campaigns should think about how much their search engine marketing strategy will help acquire new clients and also consider a search engine optimization as part of a long-term growth strategy. Since advertising with a search engine should above all want to generate leads it is ideal to first target and answer specific search queries as your customers would likely come to buy from your company. For example, a local personal injury law firm might use the keywords “personal injury lawyer in city name” or “injury attorney near me” in their paid search campaigns to receive clicks from searchers who aren’t shopping by other specifics or niches.

It is worth knowing that internet users will still favor the organic results of their web search on Google, Bing, and similar platforms. According to SearchEngineWatch, only 6% of search engine users are likely to click on paid search ads. Search engine advertising simply can’t be regarded as a complete substitute for a natural ranking system, and this is why many businesses simply use paid search to be one aspect of their digital marketing strategy. Search engine advertising can be particularly helpful for generating traffic using common keywords, especially when there is a lot of competition in the organic search results that make it difficult to rank, or when there are short-term events such as sales and offers that could use the instant exposure.

Localized Ad Copy & Extensions

 Search engine advertising offers great potential for your small businesses’ specialized products or services, and since ad space is auctioned off by the search engine according to keywords you choose, the cost per click will largely vary depending on the competition’s strategy. For this reason, it can sometimes be surprisingly inexpensive to advertise with a search engine if you are promoting a niche product, whereas more common or competitive industries may experience a substantially larger cost per click over main keywords. You can also advertise fairly cheaply if you set up your campaigns aligned to long-tail search terms with lower search volumes in a “low-hanging fruit first” strategy.

Since you are typically going to see national companies buying ads locally on search engines, you want to make sure that you include geographic terms in your text ads and also utilize location extensions so potential searchers know you’re actually a local business.

This is an example of a few extensions for my business for the localized campaigns I’m running:

A few ad extensions for local businesses:

• Sitelink Extensions: you can link to different pages on your site that are relevant to the search term and ad group.
• Phone Call Extensions: you can display your phone number in the ad, the visibility on phone call extensions are different if you’re on a mobile or desktop view.
• Review Extensions: you can source local reviews you’ve received and these snippets will show in your paid ad.
• Call Out Extensions: these will let you showcase a particular product or service outside the main body of the text ad and sitelink extension.
• Location Extension: this extension lets you show the address of the physical location of your business.
• Message Extension: this extension will give you the option to display a button for people to send you a text message.

What Are The Primary Targeting Options For Local Search Engine Advertising?

Advertisements displayed in the search engine results pages (SERPs) are matched to keyword searches. If a user is searching for the keyword “attorney,” they will be shown a few ads focused on law firms or attorneys. In addition to the keywords, there are other factors Google may consider when displaying advertising, and these may also increase or decrease an advertiser’s bid. The most important targeting factors include:

• Location: Ads will cost more or less depending on the country, state, or city they’re being delivered to. A small business owner can offer more for their ad campaigns if they want the ads to appear more frequently and more visible in searches in the geographic location the searcher is in. Geofencing or Location Targeting options can include a city, state, zip code, radius by miles around a physical location or even a kilometer around a physical location. You’ll also want to pay attention to the location exclusions so you don’t get out of area traffic. Read our comprehensive post on Geofencing and location targeting.
• Daily and weekly hours: Google can display search ads more or less often, on certain days, or at certain times of day depending on your preferences. This will influence an advertiser’s bidding behavior, so allocating your budget toward the best buying times for your customers will keep your ads performing well.
• Language: Google takes the searcher’s language into account, so only displays ads in the local language will be shown. You should create advertisements for each language based on your potential customers, or limit your ad exposure to certain languages.
• Remarketing lists: With remarketing, advertisements are displayed to users depending on how they have behaved in the past. This means that a user who has previously visited your site will have a different display experience when compared with a user who has never visited the site and can be shown things that may influence a visitor to buy or act in a different way.
• Google Phone Call Only Campaigns: With phone call only campaigns, these ads are set to run on mobile only devices and a bid price is set to the max cost per call that the user is willing to pay. These campaigns skip having to click through to a website and direct users to make a phone call directly from the advertisement. The max cost per call setting is similar to the max CPC setting. Typically the cost per call will be significantly higher than the max CPC setting because the value of a phone call is typically higher than the value of a website click.

How Does Google’s Quality Score Work?

Google has a “quality score” in place as part of its rating system so they’re able to stop low-quality adverts with higher bids from landing at the top of the search results. This helps create a positive experience for all users, since Google has studied and implemented a system to understand what makes searchers click on advertisements, thereby earning them ad revenues. A well-planned search engine advertising campaign with high-quality content will always rank considerably higher in the search engines, since it is helpful and personalized to the user. A high CPC bid is not the only factor in creating a successful advertisement. Google’s quality score rates the following factors as essential for an effective advertising campaign:

Graphic by Digital Logic

• Expected click-through rate: this is based on how often the advertisement is run (impressions) and the number of clicks that one ad receives. Advertisements that have a high click-through rate (CTR) will be considered more relevant and shown more often.
• Click-through rate to the display URL: if the URL used in the advertisement has already achieved a great deal of clicks, then the ad’s quality score will also be higher. The display URL does not have to match the link target to earn clicks to it.
• Landing page quality: if a user clicks on a link because of an advertisement that was featured for its relevance, transparency, and user-friendliness, the ranking will improve.
• Relevance of the ad copy: advertisements that take up the top spots have titles and copy that perfectly fits the search query. The more relevant the ad copy is, the better the ranking will be.

As the ads are evaluated by their CPCs and quality scores, the value of the advertisement can be found with the following equation: Highest Ranked Ads = Highest CPC Bid x Quality Score

How Do You Find The Right Keywords To Use?

Keywords are the foundation of search engine marketing. As users enter keywords (as part of search queries) into search engines to find what they’re looking for, it should come as little surprise that keywords form the basis of search engine marketing as an advertising strategy.

First, you need to identify keywords that are relevant to your business and that prospective customers are likely to use when searching for your products and services. One way to accomplish this is by using Google AdWords’ Keyword Planner. Simply enter a keyword that’s relevant to your business or service, and see related keyword suggestion ideas that can form the basis of various search engine marketing campaigns.

When you’re searching for keywords that your company can bid on, thorough research can also help you identify what is known as negative keywords, or search terms that you should exclude from your ad campaigns. Negative keywords are irrelevant terms that are highly unlikely to result in conversions, so you’ll want to include some of these to protect your budget from wasteful expenses. If you sell ice cream, you would want to exclude the keyword “ice cream recipes”, since users searching for ice cream recipes are probably not going to buy ice cream from your business.

Practical keyword grouping and account structure can help you achieve higher click-through rates (CTR), lower costs-per-click (CPC), and usually stronger overall performance. Keyword research can also help you think about how to best structure your advertising account to achieve maximum performance. AdWords and Bing Ads accounts should be structured in the following way for optimal results:

Your search engine advertising campaigns should be focused on similar products or services, with different ads and keywords for each bracket of products or services within your company’s offerings. If you own a hardware store, one ad campaign could focus specifically on seasonal products such as leaf blowers, rakes, and mowers, where another campaign might focus on industrial-use power tools.

Ad groups allow for each campaign to be further subcategorized for high or “niche” relevance. In the hardware store example above, one ad group might be used for different types of rakes or models of leaf blowers. For the power tools campaign, one ad group could focus on power drills, while another could focus on circular saws. This level of organization will take longer to set up in the beginning, but the rewards (specifically higher CTRs at a lower cost) make this effort definitely worthwhile in the long run with your search campaigns.

Graphic by Digital Logic

Tracking and Measurement for Search Engine Advertising Campaigns

You’ll want to set up a Google Analytics account as well as a call reporting tool like Call Rail so you can get specific metrics from your local search campaign.

Or you can use a custom reporting platform like the one our agency sets up for our clients:

If you need professional help with your local search engine advertising or online marketing, Digital Logic is a Google Partner we will be happy to give you a free quote and free consultation.