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What Is SEM?

SEM (search engine marketing) is a popular digital marketing tactic. After all, most people start with search when looking for products or services online. (Google processes approximately 63,000 search queries every second!) When answering the question “What is SEM?” for your advertisers, the simple answer is that it’s an ad tactic where you bid on keywords that a user will query. Depending on your bid and other factors, your ad will display in the search results that users can click.

How Does SEM Work?

The foundation for SEM is defining the keywords a business wants to target. You can include a variety of keywords and exclude negative ones. The more competitive a keyword is, which is how many people are bidding on it, the higher the cost.

Once the keyword target list is complete, you create ads per the parameters of Google or other search engines. The hierarchy within Google Ads includes these areas:

Ad: The copy that displays

Keywords: The words or phrases you’re bidding on that a user may search

Ad Group: Set of like keywords grouped by theme (i.e., products or services)

Campaign: The overall umbrellas for managing ad groups and entering budgets

When Do Ads Display?

The ad must be a good fit for the searcher’s query. Even if it is, that doesn’t mean the ad will show up. Two factors determine that: the Quality Score and maximum bid. Google grades the quality of ads on factors like how relevant the text ad is to the searched terms, how likely people are to click on the ad and the experience when a user reaches your landing page. The maximum bid is the highest amount someone is willing to pay for a click on an ad.

Why SEM Is Critical for Local Businesses

Local businesses can benefit significantly from paid search. That’s likely where their target audience begins their decision-making process. According to Google, 76% of people who search for something nearby visit the related business within a day. Additionally, 28% make a purchase. The majority of those searchers, 92%, choose a company on the first page of local results.

SEM vs. SEO: What’s the Difference?.

SEM and SEO (search engine optimization) are related but not the same. SEO is the process of optimizing the content on websites to improve organic rankings on search engines. Ranking depends on multiple factors, including quality, relevancy and optimization. Google uses ranking signals in its algorithms to calculate this, and they regularly make changes to it.

These complement one another, and you should encourage customers to have strategies for both. The major difference besides one is paid, and the other isn’t, is the speed of results. SEM can deliver traffic to an advertiser on day one. SEO is a long-term initiative that can take time to earn rankings, especially in competitive markets.

Budgeting for SEM

In planning a budget for SEM with customers, it’s important to note that you start with a monthly figure. As ads run, the goal is to collect the most relevant clicks for the lowest possible CPC (cost per click). While the campaign set up is to bid on keywords for the ad to appear, your customers only pay when the click occurs.

As you continue optimizing their ads and focusing on the most valuable keywords, quality scores improve, and budgets go further toward revenue-generating conversions.

Click-Through Rates and Other Benchmarks

Another area of questions advertisers may have relates to click-through rate (CTR) and cost per click (CPC). The average CTR for Google ads is 3.17%, which is higher than that of other channels, like social media ads. The CTR varies by industry, as does the cost. If looking to present this information to clients, you can find CTR by industry here and CPC by industry here.

SEM vs. Social Media Ads: What’s the Difference?

They are similar in the bidding capacity, but how they target is what sets them apart. SEM targets by keywords, although you can also target geographically and by limited demographics.

Social media marketing targets a user profile based on demographics, location, preferences, industries and interests.

These ad types allow for different strategies.

How SEM Complements Other Ad Types

In addition to pairing well with social media ads in a multimedia campaign, SEM also pairs well with other ad formats. Using SEM on its own can deliver results; however, an integrated campaign that includes multiple digital tactics and linear is vital to make a greater impact and acquire a larger share of advertising budgets.

Here are some points you can make while talking to advertisers about this:

Conversion rates increased by 52% when display and search ads ran simultaneously.

For every $1 invested in display and search, your advertiser can get a return of $1.24 for display and $1.75 for search.

Radio ads lifted legal services website traffic by 13% in 2020 and 10% for the first half of 2021.

Radio generates an average of 29% lift in Google search activity.