We all use search engines every day, but how many of us really know what goes on behind-the-scenes that make the engines work? Knowing even a few simple facts about search engines such as Google, Yahoo, MSN, and AOL can lead directly to being able to leverage them to increase sales and profits.

Dissecting the Search Results Page

As you know, when you conduct a search on a search engine, you are presented with a set of free and paid results that match your query.

"Free" results mean that the search engine makes no money when you conduct a search and click on a particular site within the free section. The free listings are also referred to as "organic" or "natural" listings.

"Paid" results mean that the search engines do make money when you click on a site in the "sponsored links" section. The paid listings are "pay-per-click" ads, and are also referred to as "sponsored ads."

Examples of the "Free Results" and "Paid Results" section at Google and Yahoo:

Section Labeled A: These are the "Free Results" on both Google and Yahoo. They make up a majority of the listings on the search results page, and cost the site being linked to nothing when you click on them. They typically show up below the paid ads, or to the left of them.

Section Labeled B: These are the "Paid Results" on both Google and Yahoo. They make up a minority of the listings on the search results page, and are usually distinguished by having a colored background behind them, under the label "Sponsored Results." They typically show above the free ads, or down the right side of the page.

About the Free Results

In order for the search engines to stay in business, they must provide visitors quick and relevant information. Now, it would be impossible for the staff at Google and Yahoo to individually visit all of the Websites in their index in order to determine which site would be the best match to a particular search.

Accordingly, the search engines employ an "algorithm" (a set of mathematical and linguistic rules programmed into software) that analyzes each page in their index to serve the most relevant sites to searchers. An automated program called a "spider" crawls the Internet and downloads every Web page it visits into their database servers.

These algorithms rely on a large and somewhat mysterious number of criteria. The search engines don't publish their exact criteria, but a good search engine optimization consultant will know from experience and reading the trade literature how to optimize results.

If you want your site to appear at the top of the free results section (so that you don’t have to pay for the traffic to your Website), your site must be constructed so that it is most appealing to the search engine algorithms.

The practice of making your website more appealing to the algorithms is called search engine optimization. Since it is in the search engine's best interest to serve up the most relevant results, the best way to appeal to search engine algorithms is to build a site that delivers what your target audience is seeking. If you provide what the customer wants, and apply good SEO techniques to help the spiders find you, then essentially this aligns the needs of the searcher, the search engine, and your business.

While there are many factors that influence your free rankings in the search engines, some of the most critical for long-term success include:

How many relevant websites link to you?
The search engines assume that Websites with the most relevant links leading to them provide the most value. Otherwise why would these other quality sites point their own visitors over to them? As a result, sites with good "link popularity" are prioritized at the top of the list. But, search engines can tell the difference between relevant Websites linking to you and just any random link, so links themselves need a strategy to be most effective.

How much relevant content do you have on your site?
The more relevant content (i.e., a quantity of copy that clearly identifies the targeted subject), the better. Content demonstrates that you want to inform your visitors and gives the search engines a good reason to prioritize your listings high in the search engines. The article you're reading right now is an example of relevant content. We're trying to give you valuable information, and also to show a search engine the value of our site.

How well organized is your site?
Remember, it's not a person on the staff of a search engine that's browsing your site—a computer "robot" does it. As a result, your navigation has to be constructed in such a way that makes it easy for this "bot" to find all the pages on your site and determine which pages are the most important.

Bottom Line: While search engine optimization is a great way to generate substantial traffic at almost no cost, it can take some time to achieve good rankings.

About the Paid Results

Paid results are often referred to as pay-per-click ads (or "pay-per-click marketing"). The big difference between free results and pay-per-click marketing is that your paid ads can show up at the top of the search engines instantly. Remember, it can take months, if not years, to get your site to the top of the free results section (no matter what anyone promises you). In pay-per-click, you pay a fee to the search engines every time someone clicks on your paid ad, but you pay nothing if they don't. You truly pay for results.

Pay-per-click marketing is a marketplace for clicks. Every single keyword or phrase is like stock in the stock market. If the keyword is popular and produces significant results for advertisers, advertisers will "bid" up the keyword in order to appear higher in the rankings than anyone else. This earns them a greater piece of the pie.

Here's an example:

Let's say the term "blue widget" is a very popular keyword that a lot of people search on when they are ready to make a purchase. Note: whoever bids the highest for a single click, shows up in first place in the sponsored links.

Site A bids 50 cents in order to be #1
Site B bids 45 cents in order to be #2
Site C bids 40 cents in order to be #3

Site C sees that they generate $1,500 in sales for every $100 in expenses they have for the term "blue widget." To increase sales, they decide to bid higher in order to move higher on the list. So, Site C increases their bid to 51 cents.

Then the search results will look like this:

Site C gains the #1 spot because they bid 51 cents
Site A is now #2 because they bid 50 cents
Site B moves to #3 because they bid 45 cents

Five minutes after Site C raises their bid to 51 cents, Site A, which uses tracking software to constantly monitor their rankings, increases their bid to 52 cents in order to regain the #1 spot. Site B, which has no tracking software, has slipped to #3 and doesn't even know it.

This is oversimplified, but hopefully you get the point: Pay-per-click marketing allows you to show up at the top of the search results pages for all of the keywords that are important to you, as long as you're willing to pay for it. This can be cost effective and quicker, given the investment in time and resources the monitoring of free rankings requires. And, with a partner like Exclusive Concepts to manage your campaign on your behalf, you're sure to get the greatest number of leads and sales for your marketing budget.

Bottom Line: Pay-per-click marketing is highly measurable. Want proof? Look at Google's stock. Google is worth over $50 billion because so many advertisers use pay-per-click advertising to generate new business.

What's your next step?

I'm always asked, "Which should my company focus on, the free results or the paid results—search engine optimization or pay-per-click?"

The answer is to maximize both. As long as your company is motivated by profits and has the resources to invest in measurable and cost effective marketing opportunities, you should take a multi-tiered approach to Internet marketing.

A Piper Jaffray report showed that search engine marketing (including both search engine optimization and pay-per-click strategies) delivers the most cost effective leads of any other form of marketing. Search engine optimization and pay-per-click are complimentary forms of marketing. Fortunately, you can hire a company like Exclusive Concepts to take the complexity out of the process. We can improve your Website itself so that the search engines give it higher priority in the free results section, and we can also manage your paid marketing spends in order to maximize results.

The one sure thing about search engine marketing is that you can't afford to ignore it. Give us a call so that we can show you in detail how search engine marketing can work for you.

About the Author:

Scott Smigler has been an evangelist for a serious, ROI-based focus on the online channel since he founded Exclusive Concepts in 1997. Exclusive Concepts provides integrated online marketing strategies and search engine marketing solutions for hundreds of clients that range in size from small e-commerce firms (Yahoo! Stores) to business–to-business service providers.