You see a lot of acronyms thrown around these days. SEO, SEM, SMO, CRO. It’s hard to keep it all straight. It’s easy to think that words that sound similar may be variations of the same thing. So what is SEM?
You’re not the only one asking this question. We’re here to clear it up.
SEM is a very effective way for small businesses to reach new customers, increase revenues, and trim acquisition costs.
To answer your question: What is SEM? And how can SEM benefit my business?
Here’s what you need to know.
What Is SEM? A Beginner’s Guide
SEM stands for search engine marketing. This may seem very broad. But the term has actually come to mean a very specific type of marketing on search engines. That’s paid search. The most commonly known and used paid search tool is Google AdWords.
But Bing or Yahoo may also be worth your time and money.
SEM leverages the power of search engines like Google to reach potential customers at the perfect time and place.
It’s also known by many other names. To answer the question, what is SEM?, it’s important to make note of them. People may use them interchangeably. And you may find you know more about SEM than you think you do.
It’s also called:
- Paid search ads
- Paid Advertising (which just assumes you know it’s on searches)
- PPC (Pay-per-click)
You’ll also want to learn terms that are used often when discussing SEM. Through them, you’ll better understand how SEM works. Some of the most important ones include:
- Impressions — How many times your ad was visible on a screen. It doesn’t actually mean the person saw it.
- CPC (cost-per-click) — how much you pay when someone clicks your ad
- CPM (Cost per million impressions) — This is another way to pay for a search ad. Depending on your goals and how the ad tool is set up, you may want to pay just to be seen.
- CTR (click through rate) — the number of clicks you got to your website from people that saw the ad, even if they didn’t click on the actual ad itself.
What Is SEM Compared to Social Media Advertising?
Some social networks also offer ad services that we can include when we ask, what is SEM? They involve a search function. But social media advertising and SEM aren’t generally the same thing.
In social media advertising, ads typically display based upon data that the social media company collected about that individual. This allows you to target people based on specific interests, locations, buying behaviors and more.
Search engine marketing, on the other hand, relies on keyword phrases to target people when they’re performing searches in places like Google.
Social media advertising and SEM aren’t interchangeable. But they can work together very effectively to increase brand awareness and sales. It’s not uncommon for people to see your social media ads for a few days.
Then when they do a search, their eyes are drawn to your ad because they recognize you. They’re more likely to click. This may also happen in reverse. For this reason, it’s often effective to use both methods when marketing your business.
People also often confuse SEM with SEO. Blame it on the similar appearance of the terms.
What is SEM Compared to SEO?
They are not the same. But it’s not really SEO vs SEM either. They do work together closely as a team.
SEO is search engine optimization. With SEO, you take certain steps to help your website appear higher in the organic search results in Google.
When someone searches for “How to make an offer on a house”, Google uses an algorithm to determine which web page can best answer that query. It then ranks the pages according to how sure it is that that page can answer that question.
Google’s goal is that you find what you’re looking for at the top of page 1 in search results. SEO is about positioning your website so that Google determines that you’re the best website to answer the question.
Google factors in many elements to determine this, including:
- How fast your website is
- Whether people click when they see you in search results
- How people interact with your website. Do they click on other pages? Do they stay a little while?
- How in depth the answer appears to be
They also want to know that others trust your website.
One of the top ways that Google determines if you’re trusted is by looking at the number of links from other trusted websites (backlinks).
It takes some time to build this trust and get to the first page in a Google search. By contrast, with SEM, you bid on the keyword phrase “How to make an offer on a house”. If you win the bid, your ad will show up on page one instantly. And even at the top if you bid enough and meet Google’s requirements.
In this ad, you would write copy that compels a person to click on that ad.
Do Businesses Who Use SEM Need SEO?
Many people ask if SEO is still important when SEM is your primary marketing method. The answer to this is: Absolutely!
For starters, part of SEO is making sure your site is fast and user-friendly. You need this for SEM as well. If it isn’t, you’ll waste money on that click.
On top of this, Google has a system in place called Quality Score. If they see that people click. Then they leave because of a bad experience, they charge you more for each click.
Secondly, SEO is the long game. When you appear in more searches organically, you can focus your SEM efforts on other keywords to expand your reach.
How Much Does SEM Cost Compared to Other Methods?
People want to know, What is SEM in terms of cost? That’s actually a loaded question. Here’s why.
When you run effective SEM campaigns, Google rewards you with lower costs and higher visibility.
But if you choose the “set it and forget it” method, then Google will increase how much you pay. Other platforms have similar systems that reward quality.
When you hear people talking about how expensive AdWords has become, it’s because so many small businesses don’t understand why they’re paying more. They don’t get the secret to keeping AdWords cost low.
SEM is more expensive if you’re not also focusing on long-term strategies including keeping that quality score up, SEO, and a social media presence. But in the short term, nothing can drive more leads and sales faster than SEM.
Now let’s answer the second part of our question – What is SEM and what are the benefits for business?
How Does SEM Benefit Small Business?
Let’s take a look!
1. It’s Instant Brand Awareness in Search Engines
As stated, SEO and unpaid social media take time. Google says it can take up to a year for a quality site to scale the rankings. And your ability to do so depends on strategies applied and what the competition is doing.
In contrast, SEM positions you at the top or bottom of page one. A business that has no current visibility or brand recognition can instantly get some attention.
If you have the right systems in place to turn this visibility into paying customers, that’s a huge impact on your revenues.
2. It Can Generate Revenues Quickly
With the right ad copy and strategies in place, see sales coming in the same day. It doesn’t need time to rev up. It’s really easy to get started with something like AdWords.
It does, however, require maintenance to get the right SEM ROI.
3. It Grows with Your Business
What is SEM? It’s incredibly scalable. It’s easy to start small. Test things out. See what works. Keep costs low if you have a very limited budget.
Then as revenues go up thanks to SEM, increase the number of ads. Remove ads that aren’t working. Refine your campaigns. And increase your daily ad spend.
In AdWords and most other PPC platforms, you can set a daily budget of as low as $10. This way you never get surprised by a really high bill for advertising.
4. It Reaches People in the Right Place & Time
Nearly half of the world’s population is now online. Over 93% of online experiences start with a search engine. Search engines drive more traffic to websites than any other source.
It doesn’t matter what your product or service is. With only some rare exceptions, their journey starts online.
Being visible in search results means being where the customers are. It’s also the perfect time to earn a new customer.
People use search engines because they’re looking for something. Being the one to deliver it, helps you build a trust bank account with that person. Even if that click doesn’t result in an immediate sale, it’s a touch point that furthers the person’s journey toward becoming a paying customer.
5. It Reinforces Name Recognition
When you get a new customer, you may think that person just found you and made a purchase. But chances are that journey started days, weeks, or even months ago. The way you consistently and repeatedly presented your brand during that time has helped turn a prospect into a paying customer.
Experts estimate that it takes 7-13 touch points with a business before someone converts. Each time they see you in social media, searches, on websites and in their inbox, you’re reinforcing name recognition with that individual.
Recognition becomes familiarity. People notice brands they’re familiar with over brands they aren’t. Most people would rather spend a little more with a brand they know than a no-name brand.
What is SEM if not a great way to improve brand recognition in the place 93% of people start each online experience.
6. It Reaches Your Prime Target
Search engine marketing allows you to get really focused in on your target customers in a way you never could with traditional marketing. Why? Because it would be insanely expensive the traditional route.
An ad in AdWords doesn’t cost you anything until someone clicks it. You can create 10. Or create 100.
We don’t recommend you try to manage that many at first. But the more targeted you can make that ad, the better that ad will perform with customers.
When you target at this level, you connect at a meaningful level. Demonstrate that you’re not casting your nets wide and seeing what you drag in. Instead, you know exactly who will benefit most from a product or service. Speak directly to that person.
7. It Can Give You a Competitive Advantage
Through exceptional SEO, does your competitor already have a coveted top spot in the organic search results? You can appear above them with paid ads. Swipe a click that would have been theirs.
Is your competitor also using paid ads? You need to as well to cancel out that competitive advantage they have on you.
The vast majority of businesses aren’t using SEM to its full potential. They’re paying more and getting less because of it. Chances are your competition is one of these.
With a strong SEM strategy and compelling copy of your own, you’ll have the advantage over the less savvy competition. Have a smart competitor? The right strategies can also outsmart them to increase your own market share.
8. It’s Less Expensive than Traditional Advertising
Why is SEM so much more affordable than traditional marketing? It’s simple. Because, you’re in control. Here’s how.
You’re not paying $1M to reach 10,000 people who watch a specific program but may or may not be your target customers. Instead of very broadly targeting a demographic as you might in a TV ad, you can place a narrow focus to increase the conversion rate.
If an ad has a low conversion rate, you can pull it or fix it quickly. A traditional ad keeps running for the length of your contract. You have to get approval to change it. And it costs a lot more to do so.
If an SEM ad performs really well or you experience an unexpected decline in sales, it’s easy to scale up quickly. Increase traffic and revenues with just a few clicks.
Suspend ads if you get more orders than you can handle. It’s that easy.
Finally, it costs less because you know so much more about what’s working and what isn’t. You can directly attribute a sale to an ad.
You can see how people respond to the ad. Do they click it? Do they spend time on the landing page? Do they watch a video or click something else while there?
You can do all of this with digital marketing analytics and learn more about your customers. Make smarter decisions about how you spend your marketing money when you can make data-driven decisions.
The Smart & Cost Effective Way to Do SEM?
We’ve discussed, what is SEM? We compared it to SEO and Social media.
We’ve also looked at how SEM benefits small businesses like yours.
But you may be saying to yourself, this hasn’t been my experience. PPC costs me a lot of money. My acquisition costs are hard to justify.
We don’t want to leave you feeling that the benefits of SEM are out of reach for your business.
So, briefly, let’s explore how your business can benefit from SEM by running smart campaigns.
Learn Why Your Customers Use Search Engines
Yes, you’re trying to sell something. But SEM is much more than just an ad for a product or service. To meet various marketing goals, learn why your customers use search engines. How can you leverage that to earn their business?
Particularly, if you’re in a competitive space, this broader look at SEM can be the competitive advantage you need to get the right ROI on SEM.
Search Engines for Dummies gets it right with the 3 top reasons people use search engines:
- Research — A person may want to learn about a brand, product or service. They may be researching the solution to a problem. They may be looking for the best place to eat dinner tonight. They may be checking out the reviews on a business. Reach people with SEM when they’re doing research. Help them make a smart decision.
- Entertainment — The Internet is a plethora of things to do. Some are looking for videos. Others are looking for games. Many are entertained by new stories. Others like financial calculators. Others want to learn something new. Think about what kind of entertainment your target is looking for. Relate it back to your brand. That’s a great way to use SEM to connect.
- Buy Something — They go onto Google with the intention of buying something. These are people that can often be convinced to buy right now. Make them a compelling offer in your ad.
To these, we will add one more that’s very important. People use search engines to find specific websites instead of typing in the address.
They may use Google to pull up Facebook or Chase banking or your competition. With the right ad, you may be able to use this time to get your own brand onto the target’s radar. If the ad is compelling, you’ll steal their click.
Type “Visit Biltmore” into a search.
The official Biltmore website is understandably in the #1 spot in Google.
But Trip Advisor has this compelling SEM ad above the organic search results.
That’s how it’s done.
Set a Budget
If you don’t have a budget, you’ll always overspend. You’ll “forget” about certain expenses and have to find a way to pay them. You won’t recognize when you’re paying too much.
Your SEM budget should include funding of time and money for:
- Writing copy
- Creating landing pages
- Doing research
- Managing the campaigns
- Analytics (free and paid tools as well as time set aside to do it)
- CPC (cost for clicks)
Also, if you’re site isn’t user-friendly, mobile-friendly and fast, you’ll need to do this first. That will require investment into your website and SEO. The great news is that expert SEO will help make all of your marketing efforts more efficient.
Set Clear Goals
Without clear goals, you won’t know when you’ve achieved results. Is your campaign working? A goal isn’t always a sale. It may be to generate a lead. It may be to increase brand awareness.
Determine what your goal is. How will you measure it?
Set up Google Analytics funnels to track what happens once people reach your website.
Know Who Your Target Is
What is SEM to your customers? It’s an opportunity to find exactly what they were looking for. Your business is the one providing it. Know what your target customers want. Build your ads around these challenges and goals to earn clicks.
To better understand who your target customers are, compile and analyze data about existing customers. Your target customers will likely be a lot like them.
Conduct surveys and use reporting software to learn more about your customers.
You’ll learn a whole lot about them once you start effectively managing SEM. Reporting in AdWords together with Google Analytics helps you understand who customers are and who they aren’t.
More importantly, find out which ones are more likely to convert and spend more money. A successful SEM campaign will lower acquisition costs while increasing the average lifetime customer value.
That’s because you’re attracting people that are more aligned with your brand.
Use Ad Groups
You probably won’t start out with 100 ads. And you may not need anywhere near that many. But in order to connect to your target you need to:
- Speak to different goals and challenges among the same audience
- Speak to different audiences
- Test various messaging with the same audience
Ad groups make it easy to stay organized while applying various strategies.
Create Seamless Landing Pages
A landing page is a page on your website that has a single specific goal to accomplish. It’s not your homepage. And it’s not a page with multiple offers.
Some ads may be able to share a landing page. That means they’re both directed to one webpage. But the landing page itself should clearly continue with the messaging in the ad.
Only 48% of businesses create even one new landing page when they launch a campaign. You’re ahead in the game if you do.
Landing pages make taking the desired step a no-brainer. They eliminate obstacles between you and reaching your goal.
If the ad offered a free eBook, the landing page quickly tells you how to redeem it. The landing page isn’t typically the place to do a lot of selling about who you are or what you do. You don’t want a lot of distractions on your landing page.
Does your business take a lot of explaining? The best time to go into detail is after you’ve captured the lead. Instead, use your landing page to capture that lead.
You might include some client logos or other social proof. You might add some bullet points. Keep it brief. Then give people a CTA (call to action).
Do Your Keyword Research
What is SEM without keyword research? It’s not much. This research tells you what phrases people are using to find sites like yours. It also gives you an idea of about how much you’ll pay for that keyword.
Consider how keywords align with your ad copy. it will not benefit you in SEM to just include as many keywords if you can. If they aren’t relevant or don’t align well with the ad, they will lower your quality score over time. Remember, that means you pay more.
Use Negative Keywords
You’ll also need to use negative keywords to run a smart SEM campaign. These are words you don’t want associated with your brand. People might use these words with a keyword you’re targeting in a search. If you appeared in these searches, it might appear misleading to searchers because that’s not really what you’re all about.
By telling the search engine advertising platform what these are, you reduce the chances that you appear in irrelevant searches.
For example, you probably don’t want “free” to pull up your ad when someone uses it with your keyword.
“Bookkeeping software” and “free bookkeeping software” are two very different things.
But “free bookkeeping software” is a great phrase to target if you are offering a free trial like these companies.
Build your list as you go. It may include words like the following if they don’t apply to the offer.
- Tutorial /DIY
Consider the difference in these examples.
Pet grooming vs pet grooming tutorial.
Reputation management vs reputation management eBook.
Video marketing vs video marketing stats.
Keep It Relevant to Keep the Quality Score High
Keep the Quality Score up. Keep costs low.
In AdWords the quality score is a determined by how well your ad performs in these areas:
- CTR (click through rate) What percentage of impressions result in a click?
- Keyword relevance — If people aren’t clicking the ad when they enter that keyword, the ad appears to be irrelevant for that keyword.
- Landing page quality — Yes, Google is looking at what happens after they click on the ad. If the person leaves your website quickly or doesn’t click on your CTA, it looks like you have a bad website experience or your ad was misleading.
- Ad text relevance — how relevant is the ad text within the search
- Historical performance — Start running campaigns. Ignore the quality score. If you do, it takes a while to recover because AdWords looks at how you perform over time.
Quality score is a real factor in the affordability of AdWords. People with a low score pay as much as 400% more than other with an average score. People with a great score will pay a lot less.
What Is SEM & How Does it Benefit Your Business
It’s a form of advertising that targets people when they’re searching for something in a search engine like Google. It’s an effective way to target potential customers and guide them to your website. Because SEM is so scalable, it’s always the perfect size for small business. It grows as you grow.
But you can end up spending way too much in SEM if you don’t set goals and budget. It will cost you more if you don’t keep the quality score up.
Want to get the most out of your small business marketing budget? Work with a company that can help you with your “what is SEM” woes by building and managing a smart SEM campaign. Contact us today.