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What Is Programmatic Advertising? How Does It Work?

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What Is Programmatic Advertising? How Does It Work?

Programmatic advertising has been a buzzword in the marketing industry for quite some time. But what does programmatic actually do? And how does it differ from traditional display marketing?

Read on to learn everything you need to know to be successful at programmatic advertising.

What Is Programmatic Advertising?

Programmatic advertising uses automated technology and algorithmic tools for media buying. The term programmatic relates to the process of how ads are bought and sold in the advertising space.

Programmatic advertising differs from more traditional media buying methods in its use of automation.

It analyzes many user signals to ensure that ads serve the right person, in the right place, at the right time.

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Think of programmatic as the umbrella in this category, where different types of programmatic buying are categorized beneath it.

What’s The Difference Between Programmatic And Display Ads?

It’s easy to confuse display and programmatic ads, especially with the strides that Google has made in its automated and real-time bidding capabilities.

The largest difference between programmatic and display is:

  • Programmatic refers to how ads are bought.
  • Display refers to the format of how ads appear.

The second biggest difference between display and programmatic is the ability to buy ads across platforms.

Display ads are more commonly referred to when placing ads within one specific ad network, such as the Google Display Network.

Programmatic advertising, on the other hand, takes display media to the next level.

Multiple platforms exist for programmatic, such as sell-side platforms (SSPs) and demand-side platforms (DSPs), allowing advertisers to buy ad inventory across an open network of platforms.

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With both programmatic and display, advertisers typically have control over the following:

  • Audience.
  • Bidding strategy.
  • Budget.
  • Creative and assets.
  • Placements.

Programmatic Advertising Platforms

Automated technology has made significant strides throughout the years.

There are many types of programmatic platforms.

The three main types of platforms are:

  • Sell-side platform. Also known as a “supply-side platform,” this platform allows publishers to sell their ad impressions to advertisers in real time. This platform encompasses both DSPs and ad exchanges.
  • Demand-side platform. This platform allows advertisers to purchase ad inventory across multiple platforms at once.
  • Ad exchangers. This is how SSPs flow their ad inventory to DSPs. DSPs connect to an ad exchanger, where ad prices fluctuate based on the competitiveness of that inventory.

To familiarize yourself with the different platform types, let’s take a look at some of the major players in each category.

Sell-Side Platforms

A comprehensive list of SSPs for publishers includes:

  • Google Ad Manager.
  • Amazon Publisher Services.
  • OpenX.
  • Google AdMob.
  • Yahoo Ad Tech.
  • TripleLift.
  • PubMatic.
  • Verizon Media.
  • Xandr (Microsoft).
  • Index Exchange.
  • Sovrn.
  • Magnite.
  • Media.net.
  • Criteo.

If you’re looking for a video SSP, some of the leading companies include:

  • SpotX.
  • Teads.
  • AdColony (now DigitalTurbine).

While there are many more available to publishers, these are companies you may have heard of but might not have associated with programmatic technology.

Demand-Side Platforms

Similar to SSPs, these company names may ring a bell and offer DSPs.

Some of the top DSPs include:

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  • Display & Video 360 (Google).
  • The Trade Desk.
  • Amazon DSP.
  • LiveRamp.
  • Adobe Advertising Cloud DSP.
  • StackAdapt.
  • Amobee.
  • Yahoo Ad Tech.
  • AdRoll.
  • Basis (formerly Centro).
  • RhythmOne.
  • Choozle.
  • BrightRoll.

Some of the larger DSPs for Connected TV and video include:

  • TubeMogul.
  • OneView (Roku).
  • MediaMath.

Again, there are many more DSPs available to advertisers. It’s important to choose a DSP with the features and inventory you are looking for.

Some DSPs offer self-serve advertising, while others offer both self-serve and full-managed service (likely to larger advertisers or agencies).

Ad Exchangers

Some of the more well-known ad exchangers available to publishers include:

  • Xandr (Microsoft).
  • Verizon Media.
  • OpenX.
  • PubMatic.
  • Google Ad Exchange.
  • Index Exchange.
  • Magnite.
  • Smaato.

Not all ad exchanges are equal.

It’s important for publishers to research options carefully and choose platforms that align with their goals.

How Much Does Programmatic Advertising Cost?

Simply put, programmatic advertising can cost as little or as much as your budget allows.

It’s a common misconception that small businesses can’t benefit from programmatic technologies – but we’re here to correct that.

Programmatic ads are typically bought on a cost-per-thousand-impressions (CPM) basis.

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CPMs typically range anywhere between $0.50-$2.00.

However, CPMs can be much higher based on factors such as:

  • Which DSP you choose.
  • Your target audience.
  • The level of competitiveness.

A good rule of thumb for programmatic ad cost is: The more niche your audience, the higher CPM you will pay.

So, whether you’re a multi-million dollar advertiser or a small business just getting started, you can likely fit programmatic into your advertising budget.

What Are The Benefits Of Programmatic Advertising?

There are many benefits to incorporating programmatic advertising into your marketing strategy.

Some of the top benefits include:

  • Large-scale audience reach.
  • Efficient and low-cost awareness.
  • Real-time data and analysis.
  • Ability to utilize first and third-party data.
  • Opportunities for cross-device campaign strategies.

Large-Scale Audience Reach

Arguably the biggest benefit of programmatic advertising is the ability to grow and scale.

Programmatic is the best way to buy ad inventory to reach the masses due to the abundance of cross-platform inventory.

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Efficient And Low-Cost Awareness

Related to the above benefit of scaling reach, programmatic is one of the most cost-effective types of advertising out there today.

Earlier, we discussed average CPMs for programmatic averaging between $0.50-$2.00.

Even with a small budget, your marketing dollars can go pretty far to reach your target audience and increase awareness of your product or service.

Real-Time Data And Analysis

Because programmatic platforms rely on real-time bidding, advertisers reap the benefit of receiving near real-time data.

Why does this matter?

Real-time data means you can make faster decisions and pivots. It also puts you in a proactive – instead of reactive – mode.

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Utilizing First And Third-Party Data

Another benefit of programmatic advertising is the type of data segments available to advertisers.

For example, advertisers can upload owned first-party data in a secure way and target those people directly, using real-time bidding signals.

Taking that a step further, DSPs have many third-party segments that advertisers can choose to target if they don’t have first-party data.

Another type of third-party data advertisers can leverage is turning their first-party data into third-party data by creating lookalike audiences of their own customers.

This avenue opens the door to finding new customers similar to current ones.

Cross-Device Campaign Strategy

It’s important to note that programmatic advertising is typically seen as an awareness tactic.

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Because of this, companies that look solely at last-click success often overlook the true potential of programmatic advertising.

So, how does programmatic fit into a cross-device campaign?

The key is to capture that initial awareness to users through programmatic ads.

Likely, a user won’t purchase a product or service after the first interaction with a brand.

Once a user’s interest is peaked, you have the ability to remarket to them on other platforms based on their interaction or engagement with that initial ad.

Marrying that data together from the first interaction to eventual purchase is key to determining the success of your programmatic strategy.

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Types Of Programmatic Advertising

There are different types of programmatic advertising.

These should not be confused with the programmatic platforms themselves.

The types of programmatic advertising are simply how an advertiser purchases ad inventory.

The four most common types are:

  • Real-time bidding. This type of bidding is open to all advertisers, where ad auctions happen in real-time. This is also known as the “open marketplace.”
  • Private marketplace. This bidding happens when publishers have agreements with a limited number of advertisers. These websites typically offer premium pricing because of the coveted ad space.
  • Preferred deals. A lesser-known type of programmatic advertising. Advertisers choose ad spots before they go on the private or open market. This is also known as “spot buying.”
  • Programmatic guaranteed. Similar to a preferred deal, but there is no auction bidding. The publisher and advertiser agree on a fixed price for ad inventory.

Programmatic Advertising Examples

Programmatic ads come in all shapes and sizes.

The beauty of using programmatic ads is tailoring the content to your chosen target audience.

A few well-executed programmatic campaigns include:

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Amanda Foundation

The Amanda Foundation is a non-profit animal hospital and shelter rescue in the Los Angeles area.

It created a campaign to help at-risk shelter animals find a home during their final days.

Specifically, it leveraged programmatic signals like location, demographics, and browsing behavior to tailor specific animal images to its audience.

If a user was interested in large dogs, they would be served a banner ad with large dogs instead of smaller dogs.

As you can see, messages and images were tailored to the individual’s behavior and interests.

Image from Amanda Foundation, August 2022

Geico Insurance

You’ve most likely seen or heard some version of a Geico ad.

Have you ever thought about the different ads Geico targets for you, though?

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Geico uses such ad formats as TV commercials, website banner ads, social media ads, and more, to create a true cross-platform awareness campaign.

The brand carefully chooses its content based on the platform it serves on, the target audience and demographics, and more.

Its commercials are so popular, in fact, that Geico has dedicated a resource page on its website where users can view their favorite commercials.

Conclusion

The basics and benefits of programmatic advertising can help guide your existing programmatic strategy, or if you’re just getting started, create a new strategy that incorporates programmatic.

Understanding the functionality and features of each platform will be a critical component of your programmatic success.

More resources: 

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Content Pruning: Why It Works, and How to Do It

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Content Pruning: Why It Works, and How to Do It

Content pruning sounds pretty appealing: delete a ton of content and see your organic traffic improve. But pruning has risks (like deleting useful pages and useful backlinks), and benefits are not guaranteed: So how does pruning actually work? And when

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8 Free SEO Reporting Tools

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8 Free SEO Reporting Tools

There’s no shortage of SEO reporting tools to choose from—but what are the core tools you need to put together an SEO report?

In this article, I’ll share eight of my favorite SEO reporting tools to help you create a comprehensive SEO report for free.

Price: Free

Google Search Console, often called GSC, is one of the most widely used tools to track important SEO metrics from Google Search.

Most common reporting use case

GSC has a ton of data to dive into, but the main performance indicator SEOs look at first in GSC is Clicks on the main Overview dashboard.

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As the data is from Google, SEOs consider it to be a good barometer for tracking organic search performance. As well as clicks data, you can also track the following from the Performance report:

  • Total Impressions
  • Average CTR
  • Average Position
gsc-performance-overviewgsc-performance-overview

Tip

If you’ve signed up for AWT using Google Search Console, you can view your GSC performance data in Ahrefs by clicking “GSC Performance” from the main dashboard.

But for most SEO reporting, GSC clicks data is exported into a spreadsheet and turned into a chart to visualize year-over-year performance.

organic-traffic-graph-showing-clicks-year-over-yearorganic-traffic-graph-showing-clicks-year-over-year

Favorite feature

One of my favorite reports in GSC is the Indexing report. It’s useful for SEO reporting because you can share the indexed to non-indexed pages ratio in your SEO report.

google-search-console-indexed-pages-reportgoogle-search-console-indexed-pages-report

If the website has a lot of non-indexed pages, then it’s worth reviewing the pages to understand why they haven’t been indexed.

Price: Free

Google Looker Studio (GLS), previously known as Google Data Studio (GDS), is a free tool that helps visualize data in shareable dashboards.

Most common reporting use case

Dashboards are an important part of SEO reporting, and GLS allows you to get a total view of search performance from multiple sources through its integrations.

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Out of the box, GLS allows you to connect to many different data sources.

Such as:

  • Marketing products – Google Ads, Google Analytics, Display & Video 360, Search Ads 360
  • Consumer products – Google Sheets, YouTube, and Google Search Console
  • Databases – BigQuery, MySQL, and PostgreSQL
  • Social media platformsFacebook, Reddit, and Twitter
  • Files – CSV file upload and Google Cloud Storage

Sidenote.

If you don’t have the time to create your own report manually, Ahrefs has three Google Looker Studio connectors that can help you create automated SEO reporting for any website in a few clicks

google-looker-studio-partner-connectorsgoogle-looker-studio-partner-connectors

Here’s what a dashboard in GLS looks like:

ahrefs-seo-audit-dashboardahrefs-seo-audit-dashboard
Ahrefs Google Looker Studio integration

With this type of dashboard, you share reports that are easy to understand with clients or other stakeholders.

Favorite feature

The ability to blend and filter data from different sources, like GA and GSC, means you can get a customized overview of your total search performance, tailored to your website.

Price: Free for 500 URLs

Screaming Frog is a website crawler that helps you audit your website.

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Screaming Frog’s free version of its crawler is perfect if you want to run a quick audit on a bunch of URLs. The free version is limited to 500 URLs—making it ideal for crawling smaller websites.

screaming-frog-user-interface-screenshotscreaming-frog-user-interface-screenshot

Most common reporting use case

When it comes to reporting, the Reports menu in Screaming Frog SEO Spider has a wealth of information you can look over that covers all the technical aspects of your website, such as analyzing, redirects, canonicals, pagination, hreflang, structured data, and more.

Once you’ve crawled your site, it’s just a matter of downloading the reports you need and working out the main issues to summarize in your SEO report.

Favorite feature

Screaming Frog can pull in data from other tools, including Ahrefs, using APIs. 

If you already had access to a few SEO tools’ APIs, you could pull data from all of them directly into Screaming Frog. This is useful if you want to combine crawl data with performance data or other 3rd party tools.

screaming-frog-api-accessscreaming-frog-api-access

Even if you’ve never configured an API, connecting other tools to Screaming Frog is straightforward.

Price: Free

Ahrefs has a large selection of free SEO tools to help you at every stage of your SEO campaign, and many of these can be used to provide insights for your SEO reporting.

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when-to-use-ahrefs-free-tools-across-the-seo-process-illustrationwhen-to-use-ahrefs-free-tools-across-the-seo-process-illustration

For example, you could use our:

Most common reporting use case

One of our most popular free SEO tools is Ahrefs Webmaster Tools (AWT), which you can use for your SEO reporting.

With AWT, you can:

  • Monitor your SEO health over time by setting up scheduled SEO audits
  • See the performance of your website
  • Check all known backlinks for your website
ahrefs-overviewahrefs-overview

Favorite feature

Of all the Ahrefs free tools, my favorite is AWT. Within it, site auditing is my favorite feature—once you’ve set it up, it’s a completely hands-free way to keep track of your website’s technical performance and monitor its health.

If you already have access to Google Search Console, it’s a no-brainer to set up a free AWT account and schedule a technical crawl of your website(s).

Price: Free

Ahrefs’ SEO Toolbar is a free Chrome and Firefox extension useful for diagnosing on-page technical issues and performing quick spot checks on your website’s pages.

Most common reporting use case

For SEO reporting, it’s useful to run an on-page check on your website’s top pages to ensure there aren’t any serious on-page issues.

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ahrefs-seo-toolbar-overviewahrefs-seo-toolbar-overview

With the free version, you get the following features:

  • On-page SEO report
  • Redirect tracer with HTTP Headers
  • Outgoing links report with link highlighter and broken link checker
  • SERP positions
  • Country changer for SERP

The SEO toolbar is excellent for spot-checking issues with pages on your website. If you are not confident with inspecting the code, it can also give you valuable pointers on what elements you need to include on your pages to make them search-friendly.

If anything is wrong with the page, the toolbar highlights it, with red indicating a critical issue.

severity-highlight-ahrefs-seo-toolbarseverity-highlight-ahrefs-seo-toolbar

Favorite feature

The section I use the most frequently in the SEO toolbar is the Indexability tab. In this section, you can see whether the page can be crawled and indexed by Google.

indexability-tab-ahrefs-seo-toolbarindexability-tab-ahrefs-seo-toolbar

Although you can do this by inspecting the code manually, using the toolbar is much faster.

Price: Free

Like GSC, Google Analytics is another tool you can use to track the performance of your website, tracking sessions and conversions and much more on your website.

google-analytics-screenshotgoogle-analytics-screenshot

Most common reporting use case

GA gives you a total view of website traffic from several different sources, such as direct, social, organic, paid traffic, and more.

Favorite feature

You can create and track up to 300 events and 30 conversions with GA4. Previously, with universal analytics, you could only track 20 conversions. This makes conversion and event tracking easier within GA4.

Price: Free

Google Slides is Google’s version of Microsoft PowerPoint. If you don’t have a dashboard set up to report on your SEO performance, the next best thing is to assemble a slide deck.

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Many SEO agencies present their report through dashboard insights and PowerPoint presentations. However, if you don’t have access to PowerPoint, then Google Slides is an excellent (free) alternative.

google-slides-screenshotgoogle-slides-screenshot

Most common reporting use cases

The most common use of Google Slides is to create a monthly SEO report. If you don’t know what to include in a monthly report, use our SEO report template.

Favorite feature

One of my favorite features is the ability to share your presentation on a video chat directly from Google Slides. You can do this by clicking the camera icon in the top right.

share-video-chat-google-slidesshare-video-chat-google-slides

This is useful if you are working with remote clients and makes sharing your reports easy.

Price: Free

Google Trends allows you to view a keyword’s popularity over time in any country. The data shown is the relative popularity ratio scaled from 0-100, not the direct volume of search queries.

Most common reporting use cases

Google Trends is useful for showing how the popularity of certain searches can increase or decrease over time. If you work with a website that often has trending products, services, or news, it can be useful to illustrate this visually in your SEO report.

Google Trends makes it easy to spot seasonal trends for product categories. For example, people want to buy BBQs when the weather is sunny.

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Using Google Trends, we can see that peak demand for BBQs usually happens in June-July every year.

bbq-google-trends-graphbbq-google-trends-graph

Using this data across the last five years, we could be fairly sure when the BBQ season would start and end.

Favorite feature

Comparing two or more search terms against each other over time is one of my favorite uses of Google Trends, as it can be used to tell its own story.

google-trends-comparison-examplegoogle-trends-comparison-example

Embellishing your report with trends data allows you to gain further insights into market trends.

You can even dig into trends at a regional level if you need to.

regional-trends-via-google-trendsregional-trends-via-google-trends

Final thoughts

These free tools will help you put together the foundations for a well-rounded SEO report.

The tools you use for SEO reporting don’t always have to be expensive—even large companies use many of the free tools mentioned to create insights for their client’s SEO reports.

Got more questions? Ping me on X 🙂

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Study Reveals Potential Disruption For Brands & SEO

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Study Reveals Potential Disruption For Brands & SEO

A new study by Authoritas suggests that Google’s AI-powered Search Generative Experience (SGE), currently being tested with a limited group of users, could adversely impact brand visibility and organic search traffic.

These findings include:

  • When an SGE box is expanded, the top organic result drops by over 1,200 pixels on average, significantly reducing visibility.
  • 62% of SGE links come from domains outside the top 10 organic results.
  • Ecommerce, electronics, and fashion-related searches saw the greatest disruption, though all verticals were somewhat impacted.

Adapting to generative search may require a shift in SEO strategies, focusing more on long-form content, expert insights, and multimedia formats.

As Google continues to invest in AI-powered search, the Authoritas study provides an early look at the potential challenges and opportunities ahead.

High Penetration Rate & Industry-Wide Effects

The study analyzed 2,900 brand and product-related keywords across 15 industry verticals and found that Google displays SGE results for 91.4% of all search queries.

The prevalence of SGE results indicates they impact a majority of websites across various industries.

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The research analyzed the typical composition of SGE results. On average, each SGE element contained between 10-11 links sourced from an average of four different domains.

This indicates brands may need to earn multiple links and listings within these AI-curated results to maintain visibility and traffic.

The research also suggests that larger, well-established websites like Quora and Reddit will likely perform better in SGE results than smaller websites and lesser-known brands.

Shifting Dynamics In Organic Search Results

With SGE results occupying the entire first page, websites that currently hold the top positions may experience a significant decrease in traffic and click-through rates.

When a user clicks to expand the SGE element, the study found that, on average, the #1 ranked organic result drops a sizeable 1,255 pixels down the page.

Even if a website ranks number one in organic search, it may effectively be pushed down to the second page due to the prominence of SGE results.

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New Competition From Unexpected Sources

The study revealed that SGE frequently surfaces links and content from websites that didn’t appear in the top organic rankings.

On average, only 20.1% of SGE links exactly matched a URL from the first page of Google search results.

An additional 17.9% of SGE links were from the same domains as page one results but linked to different pages. The remaining 62% of SGE links came from sources outside the top organic results.

Challenges For Brand Term Optimization & Local Search

The study reveals that SGE results for branded terms may include competitors’ websites alongside the brand’s own site, potentially leading to increased competition for brand visibility.

Laurence O’Toole, CEO and founder of Authoritas, states:

“Brands are not immune. These new types of generative results introduce more opportunities for third-party sites and even competitors to rank for your brand terms and related brand and product terms that you care about.”

Additionally, local businesses may face similar challenges, as SGE results could feature competing local brands even when users search for a specific brand in a regional context.

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Methodology & Limitations

To arrive at these insights, Authoritas analyzed a robust dataset of 2,900 search keywords across a spectrum of query types, including specific brand names, brand + generic terms, brand + product names, generic terms, and specific product names. The keywords were distributed across 15 industry verticals.

The study utilized a consistent desktop browser viewport to quantify pixel-based changes in the search results. Authoritas also developed proprietary “alignment scores” to measure the degree of overlap between traditional organic search results and the new SGE links.

While acknowledging some limitations, such as the keyword set needing to be fully representative of each vertical and the still-evolving nature of SGE, Authoritas maintains that the insights hold value in preparing brands for the new realities of an AI-powered search ecosystem.

Why We Care

The findings of the Authoritas study have implications for businesses, marketers, and SEO professionals. As Google’s SGE becomes more prevalent, it could disrupt traditional organic search rankings and traffic patterns.

Brands that have invested heavily in SEO and have achieved top rankings for key terms may find their visibility and click-through rates diminished by the prominence of SGE results.

SGE introduces new competition from unexpected sources, as most SGE links come from domains outside the top 10 organic results. This means businesses may need to compete not only with their traditional rivals but also with a broader range of websites that gain visibility through SGE.

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As Google is a primary source of traffic and leads for many businesses, any changes to its search results can impact visibility, brand awareness, and revenue.

How This Could Help You

While the rise of SGE presents challenges, it also offers opportunities.

Taking into account what we’ve learned from the Authoritas study, here are some actionable takeaways:

  • As SGE favors in-depth, informative content, businesses may benefit from investing in comprehensive, well-researched articles and guides that provide value to users.
  • Incorporating expert quotes, interviews, and authoritative sources within your content could increase the likelihood of being featured in SGE results.
  • Enriching your content with images, videos, and other multimedia elements may help capture the attention of both users and the SGE algorithm.
  • Building a strong brand presence across multiple channels, including social media, industry forums, and relevant websites, can increase your chances of appearing in SGE.
  • Creating a trustworthy brand and managing your online reputation will be crucial, as SGE may feature competitors alongside your website.

Looking Ahead

While the long-term impact of SGE will depend on user adoption and the perceived usefulness of results, this study’s findings serve as a valuable starting point for businesses and SEO professionals.

By proactively addressing the challenges and opportunities SGE presents, you can increase your chances of success in the new search environment.


Featured Image: BestForBest/Shutterstock

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