With spending on paid search expected to more than double over the next five years, rising keyword prices are here to stay.
And as budgets expand to pay for those rising keyword prices, marketers will find it increasingly difficult to drive top-line revenue growth from paid search while at the same time meeting consistent return on investment (ROI) goals.
To compound the problem, spending more on keywords doesn't guarantee your ad will show up high on search results. That's because as more advertisers have entered the market, the search engines have become pickier about which ads they promote.
In an effort to focus on the user experience, Google, Yahoo, and Bing promote ads that deliver high-quality results for their users.
Accordingly, each has developed a sophisticated mechanism to promote ads with higher click-through rates and demote ads with lower click-through rates—even if the ads receive equal bids from advertisers.
Google and Bing call that adjustment the "Quality Score"; Yahoo calls it the "Quality Index." Whatever the name, the higher an advertiser's score, the higher that advertiser's ads will appear in the search results for each given bid.
One thing is certain: The trend toward measuring and rewarding advertisers on the basis of ad quality will continue to accelerate. As a result, the only way to win at the paid-search game will be to optimize campaigns for conversion and quality.
By using new campaign-management techniques, smart marketers can gain a sizable and lasting advantage over the competition in the auction for keywords— ensuring their ads show up high in search results without dampening ROI.