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Home » SEM (Search Engine Marketing)

Search Engine Marketing (SEM)

A Definitive Guide to SEM

Last Updated: April 17, 2014

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What is SEM?

SEM is known as Search Engine Marketing and it is a type of Internet marketing that increases the visibility of websites in search engine results through advertising and optimisation. It is also known as ‘paid search’ and includes Pay-Per-Click (PPC) and Cost-Per-Click (CPC) advertising.

Is SEM An All-Encompassing Term?

The history of search engines could be said to have began in 1994 and while organic (unpaid) listings were available from the start, paid listings have a sketchier story. They appeared in 1996 and promptly vanished soon after only to be revived in 1998. Although it was Bill Gross who created the paid listings search engine Overture, Google tends to get the credit for this revolution and launched its first paid ad in December 1999.

  • Types of SEM
  • Why Use SEM?
  • Paid Inclusion
  • SEM Metrics

  • From the start, SEM was an umbrella term for all forms of Internet marketing but over the years, it appears as if more and more people use the term ‘SEM’ to talk about paid search as if it doesn’t include SEO. Now if you look for a definition of search engine marketing, it will virtually always mention paid search only and describe search engine optimization as something else entirely. It is important to get the definition correct since only 6% of people click on paid search results.

    Types of SEM

    • Paid Search Marketing: This refers to the aforementioned PPC/CPC advertising where search engines place ads throughout their marketing programs and companies only pay when a user either clicks on a displayed ad or clicks on the ad and then takes action such as purchasing a product or signing up to a newsletter.

    • Search Engine Optimisation: SEO involves the use of ‘white-hat’ (legal) techniques in a bid to improve the natural search engine rankings of a website. ‘Black hat’ (illegal) tactics such as keyword stuffing are punishable by a ban if you are caught by the search engine. The majority of listings on a search engine are organic hence the large percentage of users that click on them as opposed to the paid search efforts.

    Why Use SEM?

    Search engines are effectively online encyclopaedias so when an Internet user wants information about something, search engines comply by scouring the billions of pages of the Internet to find documents which are rated according to importance and relevance. Search engines such as Google have evolved to the point where hundreds of different factors are taken into consideration on every search.

    At present, ‘popularity’ is all-important because search engines deem popular pages to be important ones and rank accordingly. Google is the most commonly used search engine and it is on a mission to improve user experience as seen by major algorithmic changes such as Penguin and Panda. Search engine marketers were initially stunned by these changes but those with their finger on the pulse have changed their websites accordingly and continue to rank well. Click on the following link to learn more about relevant search engine ranking factors.

    A recent study showed that being ranked at #1 on Google for a search query will result in your page receiving over 32% of all traffic. In fact, the top 3 results on page 1 of Google take over 60% of all traffic. The study also shows that being ranked off the first page of the search engine is more or less a guarantee of invisibility. Clearly then, SEM is essential if you want your website to be seen by prospective customers online.


    Paid Inclusion

    This refers to the practice of search engines allowing websites to be included in the results pages in return for a fee. Once upon a time, Google in particular viewed paid inclusion as a great evil as it theoretically gave an unfair advantage to companies that could afford to pay the fee. However, things have changed with the implementation of Google Trusted Stores as the search engine giant now seems to believe that paid inclusion is a great way to fight spam.

    How does it Work?

    Online businesses that can afford it are interested in paid inclusion because it could not only lead to maximum targeted traffic, it can also increase brand awareness. It is possible to target traffic that would otherwise be inaccessible with organic results. Companies pay a fee that is essentially an annual subscription for a webpage which is guaranteed to be catalogued regularly. There are also cases where companies pay different fee structures in a bid to have these purchase listings displayed on a permanent basis.

    One of the big advantages of paid inclusion is that webmasters can create a specific schedule for their crawling pages. Normally, websites have zero control over when their pages will be crawled or added to a search engine index. When you know the crawling schedule, you can create and tailor content accordingly thus giving you a major advantage over your competitors. It is also possible to test out different marketing approaches on a website and have the results in days rather than weeks or even months. Again, this is a tremendous advantage and can keep you ahead of the pack.

    Paid Inclusion Models

    • Search Inclusion: Sponsored search results are placed on top of organic results and you can bid on the keyword phrases that trigger your text ads when searched. Bids can begin at a surprisingly low price but the more competitive the search phrase, the more you will pay.

    • Banner Ads: This is a form of paid marketing that could be making a comeback. It involves embedding an ad on a web page and sends users to the advertiser’s website when clicked.

    • Content Networks: These are groups of websites that get paid by search engines to show ads on their sites. It is normal for text and banner ads to be utilised.

    Ultimately, if you use paid inclusion, your website could receive more targeted traffic thus improving your conversion rate and a better listing that ensures your site is ranked above those of your rivals. As you have control of your expenditure, it is easy to add paid inclusion into your budget.

    For many years, Google railed against paid inclusion and described the practice as biased and subjective. This proved to be a great decision since Google became known as the objective search engine and this undoubtedly helped it control the market. Times have changed though and now Google allows paid inclusion in certain categories and claims this does not bias their search results. Here are 3 reasons why Google may have decided to allow paid inclusion:

    • Reduces Spam: Users can rely on Google quality control to ensure no spam material slips through the net. There is a ‘sponsored’ link on the top right hand corner of paid inclusion entries as a means of providing full disclosure in line with Federal Trade Commission guidelines.

    • Relevant Entries: Stores with a good reputation and large budget can afford to pay more when it comes to paid placement auctions and will normally have a higher quality store. As a result, the most relevant listings will be well ranked which is great news for consumers who don’t need to waste time on worthless websites.

    • Cash: At the end of the day, Google are making a fortune from the process as companies eagerly pay for better rankings.


    SEM Metrics – What Tools do People Use?

    There is a saying in marketing: “If you can measure it, you can improve it.” When it comes to SEM, your success depends on finding out what works and what doesn’t. Professional marketers are well aware of the data that needs to be tracked and analysed and below, we look at the most important metrics and the SEM tools that can be used for the job.

    You should not make any SEM decision until you have accurate and detailed reports to analyse. There are several all-encompassing SEM tools on the market that enable you to optimise your site’s content, find broken links and duplicate content and discover how effective your current keyword strategy is. Google AdWords is one such SEM tool and is a must have for any marketer.

    Link Building

    All successful SEM strategies need link building so you require a tool that can provide high quality and trustworthy links which enhance the authority of your website while also driving traffic to it. The best features will allow you to find prospective linking sites, enable you to discover who is linking to your site and will also manage link building outreach. Two well-known methods of tracking site rankings are Authority Labs and SEOmoz.

    Keyword Research

    No matter how often Google and other search engines change their algorithms, keyword usage always remains an essential part of SEM. You need tools that allow you to research and locate the most commonly used terms in your industry. It is important to find keywords that are frequently searched so you don’t waste time on phrases that don’t generate traffic. These tools should also measure the ‘competitiveness’ of these phrases. In other words, you want to know how many rivals also use these keywords. It is best to target phrases with low or medium competitiveness. Google Adwords remains the best keyword research tool.

    Web Analytics

    Google Analytics is the tool of choice when it comes to measuring key metrics such as:

    • Pages per Click: The number of pages visitors view once they are on your website. You can find out if the amount of pages clicked per visitor changes depending on the time of day and use this information to change your campaign.

    • Cost per View: This allows you to factor in the cost of every page view after you have taken into account how much you spent on your SEM campaign.

    • Bounce Rate: This relates to the number of people who leave your website without viewing more than the page they landed on. It can be an effective method of finding out whether your efforts to find your target demographic are effective or not.

    Competitiveness Analysis

    You also need SEM tools which allow you to analyse your competitors in key areas such as keyword targets, authority, search engine rankings, traffic and inbound links for the sake of comparison. There are services with a browser toolbar which allows you to see a webpage’s performance as you search the Internet. You can use this information to find out what works for other sites and then model your campaign around those tactics. There are a range of tools that measure different aspects of a website’s performance including Alexa, Majestic SEO, Simply Measured, HubSpot and many more.


    Search Engines with SEM Programs

    Each of the major search engines has its own paid SEM program:

    • Google AdWords: The biggest of the search engines claims AdWords is incredibly simple to use: you place an ad on Google and if searchers look for the keywords you have chosen in your ad, it will appear above or next to the Google search results. This improved visibility should lead to increased sales. You only pay if people click on your ads and visit your website. It is also possible to set a budget limit so you won’t receive a nasty surprise.

    • Bing Ads: This was formerly known as Microsoft adCenter and it provides PPC advertising on both Yahoo! and Bing search engines. It is similar to Google AdWords since it uses the max amount an advertiser is willing to pay and the click-through rate of the ad to determine how often the ad gets shown. It was the first of the search engines to allow users to target their ads in a way which ensured more members of the target demographic saw the ad.

    • Yahoo! Search Ads: Again, this program allows you to reach Yahoo! and Bing users. It includes features such as ad extensions, product ads and mobile search ads. There are also innovative formats designed to expand your reach including stream ads and personalised search targeting. These elements are designed to boost click-through rates and be more specific when it comes to reaching your target market.


    Recommended SEM Research

    The above is pretty much all you need to understand what SEM is and how it works but if you really want to go into further detail, here is a list of additional resources including forums, books and websites.


    Steven Forsyth
    SEO Product Manager
    Groupon International

    73 Balrothery Estate, Tallaght, D24, Ireland.
    (086) 122-8514 sforsyth@tinet.ie
    Steven's home page:


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