Search Engine Marketing (SEM): What It Is, and It’s Benefits

Search Engine Marketing (SEM) is a powerful and cost-effective way to grow your business online. Learn more about what SEM is and it's unique benefits.

What is Search Engine Marketing (SEM)

Search engine marketing (SEM, Paid Search) often means advertising on various search engines on the web.

The goal of SEM is to reach the highest positions of a given search result on a search engine, also called SERP.

The most common search engines and their respective ad platform are:

What Is Search Engine Marketing SEM

Search engine marketing is a powerful and cost-effective alternative to do advertising online and increases overall return on ad spends.

Advertising on targeted keywords and search queries is an extremely targeted form of advertising. Compared to traditional media or banner advertising, SEM offers a better way to reach people searching for something specific.

Search engine marketing and paid search is an essential tool in digital marketing as a whole. It offers a way to generate targeted traffic quickly, enabling a way to test new business models online fast.

Paid search doesn’t disturb or bother the users as they are already searching for the topics in question.

Producing text-based ads can be more cost-efficient compared to high-quality videos and other promotional materials.

The Benefits of Search Engine Marketing (SEM)

1. Costs are based on the results

You won’t be paying for displaying the ads on the search engine. You only pay for the actual results of the campaigns in the form of clicks and conversions.

PPC or Pay-Per-Click is the way how the advertiser pays for the search engines.

2. The results are highly measurable

The results of SEM are analyzed and optimized through the practice of web analytics.

There are many tools (Like Google Analytics) available to improve and track the results of the campaigns in real-time.

Most highly performing campaigns have the use of analytics in common and optimizes for better results.

Whether optimizing landing pages, ad copy, targeting, or keywords analytics is a crucial part. Optimizing everything lowers the cost of advertising. Optimizing is essential to get higher quality scores on Google ads.

For example, if a campaign hasn’t given the desired results in the first months, action must be taken to improve it immediately. The changes have to be made analytically with the provided data.

Active tracking increases the profitability of any SEM campaign in the long run.

The desired goals for a campaign also must be evolving with the data provided. Incorrect goals increase the chance of measuring the wrong information, which leads to decreased profitability.

Learn more about web analytics.

3. Search engine marketing has proven a high return on investment.

Google estimates on Google Economic Impart Report that every paid search click produces five organic clicks on its search engine.

The report mentions that a paid search click is more valuable than an organic click. An Organic click is only 70% as valuable as a paid search click.

Google estimates that every dollar spent on Google Ads eventually produces 8 dollars when all clicks are taken into consideration.

In another study by Bernard Jansen and Amanda Spink, (International Journal of Internet Marketing and Advertising 2009) describes every dollar spent would produce two dollars.

The figures give an estimate of what to expect. In the end, the results can be higher or lower, depending on the level of optimization and industry.

4. Target the right people at the right time

Mobile Search Positions Google Ads

Search engine marketing utilizes the power of targeted keywords that fit the services and products that are going to be advertised.

Choosing the right keywords for services and products will target the right people at the right time when they are searching for relevant information about them.

Finding the right profitable keywords is a task every company will have to do. Not all keywords will bring the same results, and tracking the data will help you realize the most profitable ones. Use negative keywords to eliminate unprofitable keywords from campaigns.

Location-based targeting is also important to consider: A company doesn’t have to advertise on a keyword in a location it doesn’t service. Advertise there where there’s money to be made.

5. New opportunities for search engine optimization (SEO)

Creating profitable campaigns for SEM will provide you with data that can be used to improve your SEO with good keywords as well.

For example, you can be discovering trends earlier in search patterns and utilize that.

Seeing how your competitors are advertising on search engines will give insight into their keywords and how they are using them on their content marketing plans. Learn from it.

A good keyword plan will benefit both SEO and SEM. Testing a keyword plan with SEM will give you an instant feel of how could those keywords would bring results in the long run from SEO. Optimize those keywords to reach more people at the right time.

6. Data gives opportunities for other marketing channels

Analyzing accurately the data from SEM campaigns will give out opportunities to be used in other channels of marketing. For example, for Facebook marketing and social media marketing as a whole. 

Appropriate the data internally for product development when suitable to have more query-based products and services that people want.

7. It's possible to have results economically

Starting in SEM with Google Ads, or Microsoft Advertising campaigns is relatively easy.

Start with a lower budget than was planned and build up the campaigns from there. Follow the analytics and improve the campaigns and eventually scale up to meet with your goals.

After a while, if results haven’t been achieved, try something new and make the necessary changes.

Always optimize and improve until goals are met and then change the goals to match the new status quo, and continue.

SEM account structures:

Properly structured SEM accounts achieve lower cost-per-clicks, higher click-through rates, and tend to have better performance overall.

Search Engine Marketing Account Structures

Optimally structured Google Ads accounts have 5 elements:

Ad campaigns should center on related services and products.

Utilize ad groups to further subcategorize the products and services to increase relevancy. The more relevant the ad groups, ad text, landing pages, and keywords are, the better the results will be.

The Price of Search Engine Marketing

SEM can be a very cost-effective method of doing advertising, especially online.

The price of SEM is determined by a variety of different factors, some internal and some external.

Internal factors:

  • Industry competition:
    •  A highly competitive industry like finance comes with high cost-per-clicks overall compared to a less competitive industry.
  • How well the Google Ads accounts (and others) have been optimized.

The cost-per-clicks can vary a lot per keyword. It’s beneficial to find cheaper keyword alternatives when suitable if a budget is tighter.

External factors:

  • Cost of labor
    • Managing, optimizing, and the creation of SEM accounts takes time, whether it is outsourced or done internally.
  • Website management
    • The creation of individual landing pages, optimizing SEO, managing the growth of the website for better user experience.

Taking into consideration the external factors provides a more accurate cost of sem campaigns.

In smaller ad spends, it’s recommended to do the campaigns internally, if possible. That will lower the cost of labor.

For internal management, seek guidance on: How to optimize campaigns, better keyword research, or analyzing online data, etc.

Learn about 9 common mistakes that increases the cost of Google Ads.

Outsourcing comes into play when the budgets are increasing well beyond internal resources. A poorly ran campaign will cost in the end more.

Due to its nature as a dynamic online auction, the prices of clicks are never set. It’s possible to set a max bid cost in Google Ads, but it comes with its consequences.

4 main factors define the cost-per-click for paid search ads:

  1. Bid
  2. Ad quality
  3. CTR, Click-through-rate
  4. Landing page experience

The higher quality scores an account gets in Google Ads, the lower the cost of the advertisement will get.

Starting with a reasonable budget gives a good impression of how much the paid search campaigns will cost, what kind of results it will bring, and what kind of effects has search engine marketing has brought to the company.

As the campaigns and its data develops, better decisions can be made. As the budget and the amount of data grows, the possibility of scaling the advertising becomes more viable. It’s important to keep mind that the results should align with predetermined goals.

Google Ads Account Example | SEM

In our example in Google Ads, we started with smaller budgets to test which combinations of ads, landing pages, keywords worked the best for the results we wanted.

After refining our goals, checking the cost and return on investment, we were able to scale the campaigns profitably to satisfy our budget targets.

When defining the price for SEM campaigns, it’s crucial to estimate the goals given to them. Different goals will have different costs and profitability, whether the results are just clicks, sales, leads, or branding in a new area.

Understanding how results happen on the backend will provide better results through conversion rate optimization. Sometimes even the smallest tweaks to the user experience or sales funnel can have a drastically more positive impact on the business.

Engaio Digital is a growth marketing company that specializes in producing high-quality search engine marketing for companies looking to grow online.