Understanding SEM

Long story short. I have been writing articles about SEM or search ads which you can read from my previous articles. In this article, I particularly break down the content so that you can understand the whole picture of the layout and settings of search ads. I will share the latest update of Google Ads search ad setting. In which, I will quote some of the SEM articles we wrote before. You will only need 15 minutes to understand the principle and operation of the Google Search Engine Marketing (Google Ads search campaign)!

What is SEM?

Before illustrating the setting, you have to understand what SEM is. SEM stands for Search Engine Marketing. SEM can be marketed on different search engines such as Google, Yahoo, Bing, Baidu and 360. In the concept of marketing, there are Pull Marketing and Push Marketing. In short, SEM is categorised in Pull Marketing. Users search for relevant words and then click search ads to query. Like the Yellow Pages in the past, you will browse it when you need particular services or something. You need to keep in mind that if you are bidding on keywords that do not have enough search volume, (let say you are bidding for Kick Ads), even if your bids and budgets are high, without enough search volume, your ads won’t have enough impressions and clicks, and your budget will hardly run out.

The Charging Model for SEM

The charging model for Google search ads is Pay Per Click Model. You don’t need to pay when your ads appear. You only pay when someone clicks your ad. For this reason, you can use Keyword Matching and Negative Keywords to control who to see your ads and the types of search terms to be matched, so that your ads can be seen by the right targeted audience at the right time.

Who can use SEM to promote business?

Google welcomes everyone to use SEM for promoting their businesses for sure. But, is it worth doing so? Imagine if your business is about selling your own branded clothes yet the brand is not that popular. Do you think people will search for T-Shirt / Jeans on Google and then click on the ads to enter your website and make a purchase? Honestly saying, the chance is really small. Therefore, we believe that the following two categories of companies are most suitable for promotion using SEM.

1.Products/ Services that solve people’s problems

Let me use a simple example to explain. If you are suffering from hair loss, will you wait for an ad that cures hair loss on Facebook? I don’t think so. Because you will search hair loss treatment on Google right away to solve your immediate problem. If the product you are selling is about hair loss treatment and your text ad pops up, this can definitely help your product or service reach the right person at the right time. Other examples include facial treatment, beauty, flower delivery, renovation and more. All in all, if your product or service is a problem-solving tool, Google search ads are perfect for you.

2. B to B Professional Services

If you are doing B2B business, such as digital marketing agency, video shooting agency, accounting service, and even industrial and manufacturing factories, Google Search Ads can definitely help you find new customers. When your customers are looking for new partners, such as digital marketing agencies. Most of the time, the customer will make a quotation from different agencies that appear on Google search result page. When you text ad pops up at the right time, your company will be able to reach the potential customer. In this way, you can understand why SEM is important for B2B or professional services business. 

What factors affect the ad position?

There is only one first place for search results whenever you Google, so how can I make my ads ranking the first? What is about buying keywords? Is money the only factor that determines the ranking?

Keyword Bidding

The so-called “buy keywords” are actually the keywords that the advertisers bid for their products or services. Taking Kick Ads as an example, the most relevant keyword for us is “SEM Agency,” so we will bid this keyword. In the interface of Google Ads, you will see Max CPC Bid, which means that the highest one-click price I am willing to pay for the keyword, “SEM Agency”. If my maximum CPC is set to be HK$10, the Cost Per Click is HK$10 or under (in the case of Manual CPC), this is what keyword bidding or to buy keywords means.

Keyword bidding varies by industry. Take two keywords, “flower delivery” and “personal loan” as an example, which keywords do you think is more expensive? It is “personal loan” for sure. As the product/service competition becomes more intense, the businesses will be more aggressive in bidding for higher ranking. Another reason is that when the profit of the product/service is high, the business does not mind paying a higher cost per click to look for potential customers, thus the bidding price becomes higher. 

Quality Score

Your keyword’s quality score is also important. In the world of Google, even your keyword bidding price is high, if your quality score is not good, your ad rank will not rise and the average Cost Per Click will not decrease. Simply put, Quality Score measures the relevance of keywords, ads and landing pages. That is, when you search SEM Agency on Google, if the content of the ads and the landing page of your website is also about SEM Agency, the quality score will rise correspondingly. If you want to learn more about the optimization of Quality Score, you can read our “Quality Score: How to check, monitor & optimize“.

Ads ranking = Keywords Bidding x Quality Score

There are two factors that affect your ad rank, they are keyword bidding and quality score. If you have a high keyword bidding but low quality score, it will lower your ad rank or get a higher average cost per click. If the quality score is high yet the keyword bidding is low, the ads will not rank high or may even not appear in Google. You have to make sure to have a good quality score first, then calculate the advertising budget and match it with a suitable bidding price.

How do search terms and keywords match?

When we search a term on Google, you will find the text ads different in the search results, so as the ranking. For example, if we search “website design”, some text ads will pop up. But if we search for “website design 123”, there are also some text ads pop up. Is there someone in the world bidding the keyword of “website design 123”? HELL NO! The system determines how to match by looking up what keywords you bid and the keyword match type you are using

[Website Design 123] is the search term. [Website Design] is the keyword we are bidding on. And the keyword matching is going to be a lot of work we need to do in the future. Chances are that you will be matched to a new relevant search term, but there are also chances that you will find some search terms that are completely irrelevant. For example, like the picture below, it is just a waste of money.

3 Keyword Matching Types

There are 3 types of keyword matching, which are Broad Match, Phrase Match, and Exact Match. Each match type has its advantages and disadvantages. You can read our article “Keyword Matching Type With Its Respective Pros & Cons” to learn more about the basic knowledge, usage, merits and demerits of keyword matching before continuing reading the following article!

How to calculate your advertising budget?

Now you should get an idea about SEM. The next step is to calculate your advertising budget! My clients always ask me whether HK$10,000 (RM5,300) is enough for the Google ads budget. If they see the results, they will probably increase the budget. You may also ask, how much business in return for HK$10,000 budget on ads? How much should I invest on the Google ads to see the good results?

If you know the conversion rate of your website…

If you know the conversion rate of your website (e.g. 4%) and the number of Lead that you can process every month (about 30 Leads). Then your target website traffic is 30/4% = 750. If you engage in Digital Marketing, the CPC for “SEM Agency” is HK$ 22, your ads budget should be HK$16,500.

You May ask how I can know the estimated CPC of my selected keywords. Stay Tuned! You can get those number with Google Keyword Planner which I will introduce later at this article.

What If you don’t know the conversion rate of your website…

If you don’t know the conversion rate of your website, you should install Google Analytics and set up your Goal. You can read my other article “Essential Guide for Beginner’s to be a pro at Google Analytics” to learn more about Google Analytics and Goal Setting. You can put HK$20,000 first and get 909 traffic at CPC HK$22. Run the ad for 2-3 months, to find the Conversion Rate to adjust the budget using the above method.

If you really don’t want to run the campaign to know your conversion Rate, then let’s assume the conversion rate is 1 -3% first and estimate the budget accordingly.

How to get more conversions…

If you want to increase conversions, there are three ways to go. To increase impressions, increase clicks (rate), or increase website conversion rates.

The most straightforward and simple approach is to increase exposure, but the premise is that the click-through rate and conversion rate cannot be too low, or else you will be wasting your time and money. To give a simple example, if you’re a guy who flirts with 100 girls in a nightclub but none of them want to play with you, all you need to do is develop your communication skills (increase click-through rate or conversion rate) rather than going to a different nightclub every day and flirt with more girls (increase exposure)

So, what can we do to boost the exposure? You can increase the number of keywords, your ad budget, increase your keyword bids. While increased exposure boosts conversion rates in most circumstances, it also increases the cost per conversion (CPA) (law of diminishing marginality).

So, how can I know which of the strategies below is the most effective?

1. Increase the number of keywords
2. Increase your advertising budget
3. Raise your keyword bids
4. Improve the quality score (It will improve exposure indirectly, but it isn’t the most direct method, thus it won’t be discussed here)

Let me tell you about my experience. First, see if raising your advertising budget will help you gain more exposure.

The impression share is a crucial metric for determining whether raising the advertising budget will result in more exposure. Impression share can be found at auction insight. If you have a 99% impression share, it means that 99 out of 100 eligible impressions will be exposed. This also means that there isn’t much room for exposure to increase, and even increasing the budget won’t help much.

Should 100% impression sharing be the criterion for all keywords? Not at all. Even if you continue raising the budget for highly competitive keywords, your impression share may not exceed 60%.

The ceilings for impression share vary by industry and keyword. According to my experience, if it is branded keyword, such as your company name, the impression share ceiling can reach more than 90%. The impression share ceiling for some highly competitive generic keywords could be as low as 60%. The information provided above is for informational purposes only; a competent digital marketer should attempt everything!

If the impression share of the ad campaign for which you wish to increase the budget has reached a point where it is near to the ceiling, increasing the budget is no longer effective. Raise your keyword bids to improve your ad’s ranking (and, in some cases, indirectly enhance your CTR) can help increase the exposure at the same time. If your Top of Page Rate is more than 80% and your Aboslute top of Page Rate is more than 50% for generic keywords, increasing the keyword bid will not improve much because you are already ranked in a relatively high position.

The final step is to expand the number of keywords available. There isn’t anything special that needs to be explained further. The only thing you need to consider is whether the added keyword is relevant to your business. If so, increasing your keyword count will definitely help you gain more exposure.

With the same number of impressions, increasing the click-through rate will increase clicks. Assuming the conversion rate keeps constant, the conversions will increase naturally. The methods to increase CTR are mainly focused on keyword matching, Ad Copy Quality and Creativity, good use of the negative keywords, or various Ad Extensions. You will definitely know how to optimize your clickthrough rate with the following two articles《Quality Score: How To Check, Monitor & Optimize?》 and 《7 Tips To Rock Your Google Text Ads Headline》。

Under the same number of impressions, if the clickthrough rate does not change, then the clicks will not increase. In this case, to increase conversions, we need to improve the conversion rate. Work on the message on the landing page, offer giving to your user and Page Speed.

If you want to increase the conversion, the fastest way is to reduce the selling price. If you reduce a Gucci bag to $9,000 from $20,000, the conversion and conversion rate will definitely rise. (The profit is not discussed here.)

Google and Facebook ads are not hostile

When using Facebook Ads to promote “Google Ads: Must-knows for SMEs” in Malaysia, I was often challenged that “why you put Facebook Ads while you are so proud of your Google Ads strategy?” Frankly speaking, I don’t know since when I can only use one channel for advertising? Many people asked me whether Facebook or Google was better. Let me ask you, is radio advertising better or subway advertising better? Advertising on radio doesn’t mean you can’t place ads on other platforms. You can use Facebook Ads and Google or any other channels at the same time. Of course, the situation in every industry is different. But in general, placing ads on two channels works the best.

Must-knows for newbies: “A 5-minute guideline to all the must-know terms of Digital Marketing”

Start setting up your search ads

Step 1: Create your Google Ads account

If you haven’t created any Google Ads account before, you can create a Google account first. In the Google world, you only need to set up one Google account to use every of the related products, including Gmail, Google Ads, Google Drive, Google Calendar, and so on. After setting up a Google account, you can go to https://ads.google.com/. 

After clicking “Start Now”, you will see the following interface.

By Default, it is a Smart Campaign. You only need to enter all the information of the website you wish to promote into Google Ads, including keyword categories, text ads and advertising areas. Then, the system will automatically make all the data into ads and send them out in the form of text ads and image ads. This is the AdWords Express account that Google often promotes recently. Kick Ads do not recommend that you use Smart Campaign at all. If you let Google run your ads automatically without optimizing Keyword Match Type, Device, Bidding, and ad delivery time, your CPC and CPA are usually higher. You can click “Switch to Expert Mode”.

You will see the above page. Now click “Create an account without a campaign”.

Select the Billing Country, Time Zone, and Currency, then click Submit. A gentle reminder, once these settings are complete, they cannot be changed. So please set up carefully.

When you see this page, you already enter the main page of Google Ads!

Step 2: Find your keywords

Most of the time if you think people will search for a particular word, actually not many people are searching. Apart from searching the keywords of the company’s business and products, what other keywords should I bid on? How do I find the keywords that fit my business.

1. Google Trend

Google Trend is a free official tool from Google. You can enter keywords you want into Google Trend. After selecting the region, the system will show the popularity of the keywords you entered in the region.

You will see Related Queries when you scroll down. All of these can be your keywords!

2. Keyword Planner

Keyword Planner is also a free tool in Google Ads that allows you to find the keywords which are related to your company’s business. It also shows the search volume of the keywords, the level of competition, and the recommended bidding price.

Go to the top right corner of Google Ads and click Tools & Settings, then click Keyword Planner. 

There are two options in Keyword Planner. If you already have a keyword list and want to find out the search volume, competition, and recommended bidding price for those keywords. You can click Get Search Volume and Forecast on the right. However, if you want to start from scratch, you can click Discover New Keywords.

The system will show 2 options, “Start with Keywords” and “Start with a website”. By entering keywords or websites, the system will automatically analyse the related keywords for you. Take Kick Ads as an example. The most relevant to our business is “SEM Agency” and “Digital Marketing Agency”. Then click Get Result.

Remember, the region and language setting that you see from the Red box must be set correctly because all the data will be generated based on this setting. The “SEM Agency” and “Digital Marketing Agency” are shown in the orange box and the blue box shows the new keywords suggested by the system. Keyword Planner provides the keyword’s monthly searches (Avg. Monthly searches), competition, and the suggested bids for the first search result page. This allows you to have a better budget plan. Honestly, the data is not very accurate (especially Avg. Monthly Searches), sometimes it can be several times different from the actual, and the data generated from Keyword Planner can be different if you are using different accounts to check sometimes. Therefore, I don’t rely on this data much. If you see any improvement, please let me know…

3. Google Search Bar

Yes! The Google Search Bar is one of the Keyword Research methods that I always use indeed. When you enter certain words in Google, the words that appear below the search bar are the most relevant keywords. You can also consider adding it to your keywords. Of course, if you want to know the approximate bidding, you can do some planning in Keyword Planner.

Step 3: Create your Google Ads Search Campaign

When you understand the principle of SEM, know your keywords, and learn the metrics you need to know about advertising, you are ready to set up your first ad. But you need to know the difference between Campaign, Ad Group, Keyword, and Ad.

As the image shown above, you can set multiple Campaigns in one Google Ads account. And there can be various Ad Groups in one Campaign. In one Ad Group, there can be different Keywords and Ads.

How to categorize Campaign?

You can categorize your company’s services or products. Take Kick Ads as an example, SEM and Digital Marketing are divided into 2 Campaigns. Ad Group, Keyword, and Ad under the SEM Campaign are related to SEM for sure.

The actual operation is as follows:

Click “All campaigns” on the far left. Then click “Campaigns” in the middle.  You will be at the Campaign level. Click the blue +, then + New Campaign.

After that, it will show different “Goals” for you to choose. Here, I suggest clicking “Create a campaign without a goal’s guidance”, and then click “Search” and then “Continue”.

When we are setting the Campaign Name, I will set the Target Country – Keyword Type – Keyword Theme, HK – Generic – SEM. That is to say, the Target is Hong Kong.  The type of Keyword is Generic. The subject of Keyword is related to SEM. Please bear in mind that the name of the Campaign and Ad Groups must be well organized. Otherwise, you will find it confusing when you have many campaigns to run. In addition, you must turn off the Display Network in Networks, otherwise you will see a banner full of text (as shown below). If your text ads are sent to the Google Display Network, the effect will be bad and your advertising budget will also be used in the places without effect. (Why do I say this? You can download our E-Book for detailed explanation.)

Next you can select the target country/ city. You will see Target in Location Option. If your business is for local only, you can choose the third option “People Search in your target locations”. If you don’t mind having someone who finds you in a foreign country, you can choose the first one. What is the difference between the two? The picture shown below is a very good example.

Even I am now in Malaysia, when I search for “Digital Marketing Agency Hong Kong”, if you choose the first option “People in, or who show interest in, your targeted locations”, I will be able to see your ads even if I am not in Hong Kong.

In terms of language setting, as Google Ads is different from Facebook Ads. You don’t need to be afraid that your ads will be “liked” by the meaningless people. Your ads will be shown to the right people with keyword matching. You only need to set the right language of the country or region. 

For Budget, please refer to how to calculate your advertising budget above, and then divide it by 30 days. It is worth mentioning that sometimes your final advertising costs may exceed your budget and may even double. This is because if there are many searches on that day, the system will automatically increase the budget, but the monthly budget will not exceed your daily budget x 30.4. For details, please see here.

The next step is Bidding, which is divided into Automated Bidding and Manual CPC. If you know your Keyword Bidding, we recommend using Manual CPC first so that you can control the bidding, and then switch to Automated Bidding after a certain amount of Conversion, such as Maximize Click. Remember to use “Set a maximum cost per click bid limit” to avoid excessive bidding. As Google turns the entire SEM game more and more automatically, the advantages of manual bidding are less obvious. There are many types of Automated Bidding. I will share it with you later!

After you click “Show more settings”, you need to pay attention to the setting of “Ad rotation.” It is recommended that you choose “Do not optimise: Rotate ads indefinitely”. Whenever setting up an ad group, I would recommend that you set up two ads. Because AB Testing allows you to know which ad performs better. So when you set Ad Rotation to “Rotate ads indefinitely”, you can let 2 different ads rotate to see which one performs better and to optimize the ads.

Conversions are also very important as you need to rely on Conversion to measure the performance of your ads. However, we will use Google Analytics to set up Conversion Tracking. For details, you can refer to our article, “Essential Guide for Beginners to be a Pro at Google Analytics”

Last but not least, it is Ad Extension. It is a critical step as it can improve the Quality Score. Please refer to the article “9 Google Ads Extensions that can Boost Up your sales” for more details.

This is all about Campaign Setting. You can only complete all the settings in Google Campaign. Therefore, you have to categorise the Campaign and Ad Group. Allocate a suitable budget for different keywords and location to make a good ad structure.

Step 4: Create your Ad Group, Keyword, and Text Ad

After setting up Campaign, the next step is to categorise it into Ad Groups. How to categorise? Please refer to the graph of differences between Campaign, Ad Group, Keyword, and Ad above. When you have categorised your Campaign and Ad Group, you can further set up the Ad Group.

First, set the Ad Group name. For example, I will set an Ad Group for SEM Agency under SEM Campaign, so I set the name of the Ad Group to SEM Agency. The keywords under this Ad Group are mainly about SEM Agency, such as SEM Agency and SEM Agency Hong Kong. As for keyword matching, I already mentioned in one of my articles that I would choose Phrase Match and Exact Match. For details, you can refer to my article and find the keywords that are most relevant to you! The more advanced approach is to use Phrase Match as an Ad Group, and then Exact Match as another Ad Group.

What is the Ad Group Default bid? Usually bidding is based on Keyword, so for the Ad Group Default you can put a price on it temporarily. After completing Campaign, you need to adjust Bidding under Keyword Level, as shown below.

After you have completed all the settings for Campaigns, Ad Group, Keyword, and Ad, select the Campaign and Ad Group you just set in the main menu, and then change the bid in the Keyword Level. Remember to change it (based on Keyword Planner data), otherwise your Keyword Bidding will follow the Ad Group’s Default Bidding.

When you finish entering the keyword and click “Save and Continue”, the next step is to Set up your Ad. Since the keyword of this Ad Group is SEM Agency, I will put the keyword SEM Agency in Headline, Display URL and Description. We have already written an article about how to write ads, please read “7 Tips to Rock Your Google Text Ads Headlines“. After writing the ads, you have completed the basic settings of your search ads.

Step 5: Add Negative Keywords

One of the things you need for a successful search campaign is Negative Keywords. What are Negative Keywords? To put it simply, suppose that my keyword is “+ SEM + Agency”. When someone searches for “Worst SEM Agency”, my ad has a chance to appear. At this time, will I want my ad to appear? No way! Thus I add the word “Worst” to the Negative Keyword. The next time when someone searches “Worst SEM Agency”, my ad won’t appear.

Click “Campaign” and “Ad Group” in the main menu. Click “Keyword” and then “Negative Keywords”.

After clicking Negative Keywords, you can type the Negative Keywords (Worst). If you understand the principle of SEM, you may ask, should I put “Worst SEM Agency” or just “Worst”? Does Negative Keyword have keyword matching? The answer is yes, so you can add + Worst to Negative Keyword as a Board Match or set “Worst SEM Agency” as Negative Keyword as Exact Match.

The next question is, should I add Negative Keywords to Campaign or Ad Group? What is the difference between the two? If you add the Negative Keyword to Campaign Level, it will automatically apply that Negative Keyword to each Ad Group under the Campaign. Conversely, if you put Negative Keywords in an Ad Group, it will only take effect in that Ad Group. If Negative Keywords are set in both Campaign and Ad Group, only Ad Group will take effect, because the setting of Ad Group will override the setting of Campaign. So if your Ad Group has a different theme, it is recommended that you put Negative Keywords at the Ad Group Level, or only at the Campaign Level.

Finally, if you want to find your Negative Keywords from the search terms, you can find the irrelevant search terms from the Search Term Report above and set them as Negative Keywords.

The above is the concept and settings of the entire Google search campaign (Google SEM). As for how to use Google Ads Editor to upload ads quickly and how to optimize search campaigns, we will talk about it in the next article!