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Updated: Aug 17, 2022, 8:18pm
When was the last time you needed to buy a product? Chances are you turned to a search engine such as Google to start your research. The companies you see first paid to get their listing at the top, however, are ads. This is search engine marketing (SEM) in a nutshell. Read on to learn what SEM is, how it can help your business grow and where to get started.
Search engine marketing (SEM) refers to the practice of improving how customers find your product or service on a search engine (such as Google or Bing) through paid advertising. SEM once referred to both paid and organic advertising, but it is now used to refer to paid advertising alone.
As search engines are becoming the primary way people find products, a strong search engine marketing strategy is becoming even more essential for a business’s success.
SEM is used by small, medium and enterprise businesses to get in front of potential customers at the exact time they are looking for the product or service you offer. It’s also a nonintrusive form of advertising as a potential customer is actively searching for similar services you provide. SEM is also cost-efficient for advertisers because they only pay each time someone clicks on their ad (this is often called pay-per-click, or PPC, in online marketing).
Anyone with a product they want to sell online can benefit from SEM. Plus, these campaigns are easy to target and measure. “The best way to think about [SEM] is starting with the premise: a user goes to a search engine with a question in mind. If you can provide that answer—and it’s profitable for you to do so—you can benefit from SEM,” Michele Dappert, Senior Media Specialist at Planit, told Forbes Advisor.
Here’s a quick rundown of some of the advantages of using SEM marketing:
There are many terms in online marketing with similar meanings, and it’s easy to get them confused. Additionally, many people have slightly different meanings for each term.
Here’s the difference between SEM and SEO in a nutshell:
Many factors determine which websites rank highest in organic search, including relevant keywords, the overall quality of the website content and the number of backlinks (how many other websites link to yours). Increasing SEO requires an upfront investment of time and effort, but once a website begins to rank high, the traffic directed to the web page is free. On the other hand, SEM advertisers are paying for each click. Read our guide to the best SEO software for small businesses in 2022.
For additional insights, learn more about why SEO is important for your business.
A search ad is made of a few components. Dappert explained what goes into creating one.
There are several steps to creating a sponsored ad for a search engine. Here’s what the process entails.
Search ads target specific keywords that potential customers are searching for. The first step for SEM is to conduct keyword research and find out the different terms people use when they search for your product or service.
Once you narrow down the words you want to rank for, the next step will be to consider the cost. “The most important factor is the competitiveness of the keywords that you’re bidding on. The more competitive the keywords, the higher the cost will be,” Jamie Irwin, Director and Search Marketing Expert at Straight Up Search, told Forbes Advisor. Other factors that can influence cost include your Quality Score, ad rank and click-through rate (CTR).
Google uses a factor called Quality Score to determine how relevant and useful your ad is to the keywords you’re bidding on. The closer the relevance, the higher your Quality Score will be and the lower your CPC (cost per click) will be.
Part of what makes SEM an effective marketing strategy is that it allows advertisers to specify their target audiences. For example, you can target customers by location, device and certain times of day. Targeting ads based on your ideal potential customers is a way to increase the chances you will reach your intended audience and make the most of your advertising budget.
To place an ad in a search engine, you will need to enter an ad auction. For example, Google Ads evaluates ads by the Quality Score based on the keywords you want to bid on and your proposed price.
There’s no one-size-fits-all answer when it comes to the cost of SEM. According to Irwin, a ballpark estimate can range anywhere from $500 to $10,000 per month. “Of course, this number could go up or down significantly depending on your needs and budget,” he said.
You can also adjust your budget as you gain more insight into which keywords work best. “The good news is that the tactic is so highly measurable, you can see what’s working and what isn’t—and adjust the budget accordingly. The bad news is the honest answer to this question is: it depends,” Dappert said.
“When setting up your campaign, you should research historical Industry Cost-Per-Click (CPC) rates in keyword-planning and search-forecast tools to get an estimate of how much your competitors spend,” Dappert suggested. She adds that CPC ranges from $2 to more than $55 depending on the industry and that reasonable conversion rates are usually between 5% to 10% and there’s a base floor of 15 clicks (per day, per ad group) needed for the engine to optimize.
“The best strategy when assessing cost is to look at what competitors spend, keeping your goal value in mind, and recognizing that you may have to spend a bit more than them to get yourself on page one,” Dappert added.
SEM is one of the best ways to drive traffic to your website to sell a specific product or service. SEM allows you to create targeted ads that appear on search engines and reach potential customers who are actively interested in the product or service you offer. Any business, small or large, can use SEM strategies. While there is a lot to learn about what makes an effective search ad, the good news is that there are plenty of online tutorials to learn more.
Google Ads (formerly Google AdWords) is the most popular platform for SEM. While SEM refers to the method of advertising, Google Ads is an SEM platform where you can create paid advertising that will appear on Google’s search results.
Facebook and other social media platforms are considered platforms for social media marketing (SMM). SEM, on the other hand, refers to paid advertising specifically for search engines.
Google Ads (formerly Google AdWords) is the most popular platform for SEM. These ads appear on the top of Google search pages. Two other examples of SEM platforms are Microsoft Advertising and Yahoo! Native.
As with most platforms, the best SEM tools offer many levels of security. When choosing these tools, you want to look for security features like documentation that shows frequent security updates and patches, intrusion detection, two-factor authentication (2FA) or multifactor authentication (MFA), data encryption, privacy protection and the monitoring of user activities.
Leeron is a New York-based writer with experience covering technology and politics. Her work has appeared in publications such as Quartz, the Village Voice, Gothamist, and Slate.
Kelly is an SMB Editor specializing in starting and marketing new ventures. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. Additionally, she manages a column at Inc. Magazine.