Marketing Essentials 2012Chapter 27:
Pricing MatheMarketing FeatureSearch Engine Pricing Model
Search engines offer advertisers the ability to place contextual ads (only text) that will appear when queries are made. Key words in the contextual ad are used to match queries with advertisers. Search engine ads contain a heading, text, and an URL, which will send the viewer to the advertiser's Web site. The relevancy of the key words and Web site are important for search engine advertising because they are the basis of where an ad will be placed in the listing. Advertisers can also pay for placement of their search engine ad, in which case they will be identified as "paid search" or "sponsored links." Advertisers that pay for inclusion are often charged on a pay-per-click basis. To arrive at the cost per click, advertisers bid on key words that are relevant to the audience they want to reach (their target market). Advertisers provide their host with the maximum amount they are willing to pay per click for key words. The popularity of the key words and other factors such as relevancy determines where the ad will be placed in the search results. Innovate and Create
For additional clarification of search engine pricing, have students research Google and Yahoo! to see sample key words per-click rates. Students should select key words for a business or product of their choice to calculate a monthly cost for their paid search advertisement. Tell students to prepare a short written report on their findings.  | 
