What is search engine marketing (SEM)? Best practices and strategies.

Search engine marketing (SEM) is traditionally used as an umbrella term that includes all marketing activities on a Search Engine Results Page (SERP). This includes both paid advertising and organic search engine optimization (SEO). SEM now refers almost exclusively to paid search advertising, commonly known as pay-per-click (PPC).

However, this traditional definition is now critically inadequate. The modern search experience is no longer a static, linear list of ten blue links. It has evolved into a dynamic, conversational, and multi-platform discovery ecosystem. The journey began with the shift from desktop to mobile, which introduced new ad formats and geo-targeting capabilities, and was further accelerated by the integration of machine learning for bid automation.

Today, Generative AI has completely reshaped the SERP, organizing results into topic sections, offering AI-generated summaries, and personalizing experiences to an unprecedented degree. Businesses must abandon outdated models and embrace a new, more holistic framework for understanding and executing search marketing.

This post will cover:

• What is search engine marketing?
• How do you launch a search engine marketing campaign?
• Search engine marketing (SEM) vs. search engine optimization (SEO)
• How do companies balance SEM and SEO?
• How can companies improve SEM?
• What is the future of SEM?

Search engine marketing is the process of using paid advertising to make a business's products or services visible on search engine results pages (SERPs). When a user types in a specific keyword, SEM allows a company to appear as a top result for that query.

Marketers pay for their advertisements to appear alongside organic search results. This increases a website’s visibility and is one of the most effective ways to reach new customers. Ads can be text-based, but they can also be more graphically interesting and interactive, such as with video or shopping ads. It’s up to the marketers to decide which format best suits the page and audience they’re targeting.

An important first step in any search engine marketing campaign is — defining your goals. You must know why you want to advertise and what you want to achieve. Are you trying to drive a specific action, like a purchase, or are you focused on building brand awareness?

A successful SEM campaign requires managing several key variables, including keywords, budget, and ad copy.

Keywords and Intent: Choosing the right keywords is crucial. It's essential to understand the user's intent behind a search — are they looking to buy or just gathering information? Keywords with high buying intent often have a higher cost-per-click but can deliver a better return on investment.

Budget and Bidding: You need to evaluate the performance and decide how to allocate your marketing budget. Ad placement is determined by both your bid and Quality Score. Bidding too low may mean your ad isn't shown, so competitive bidding is necessary, especially for high-competition keywords.

Account Structure: A properly structured ad account is vital to avoid wasting budget. A typical structure organizes campaigns at the highest level, which contain ad groups. Each ad group consists of a set of similar keywords and the specific ads that will be shown for those queries.

Ad Copy: After structuring the account and choosing keywords, you must write a compelling ad copy that earns the click. The ad title, display URL, and description should be attractive to the searcher and communicate the offer.

Historically, search engine marketing (SEM) was an umbrella term for all marketing on a search engine, including paid ads and organic results. In recent years, the industry has shifted, and now SEM is understood to refer almost exclusively to paid advertising, like pay-per-click (PPC). At the same time, organic efforts are called search engine optimization (SEO).

Both are key digital marketing tactics aimed at driving relevant users to a website.

Search engine marketing provides immediate visibility by allowing you to pay to deliver an ad for a specific search term, reaching a relevant person at the right time. SEO, in contrast, is a long-term strategy focused on earning organic visibility by optimizing your web pages with relevant content and building authority over time.

SEO is particularly beneficial when you have a low budget and are looking to achieve results from a more cost-effective standpoint. The downside is that you need to allow more time for it to grow, because the results aren't going to be instantaneous. You need to review your website, make any necessary adjustments, and then wait.

A key benefit of search engine marketing is the ability to reach customers instantly. You can pay to have your site show up on specific search engine results. For example, if you have a website that sells hair ribbons, your ad can appear at the top of the page when someone searches for “buy hair ribbons online.”

Using both SEO and SEM together can help maximize performance and limit keyword cannibalization. For example, let’s say you rank organically for several branded or non-branded keywords that a paid team targets. By identifying which keywords you rank in the first few organic positions for, you can identify opportunities to reduce ad spend on those keywords and increase spend on ones your brand doesn’t rank for on the SERP.

With search engine marketing, you can test new keywords and discover where additional customers might be searching. The data from these paid campaigns — like high-converting keywords and user behavior trends — can then feed back into your SEO strategy, creating a virtuous cycle of growth.

There are several ways to make your SEM strategies more effective. First, develop a deeper understanding of the target audience you’re trying to reach. Second, enhance your tracking and analytics to gain a deeper understanding of customer behavior beyond the initial click. Third, use this data to optimize your campaigns and spend your budget more efficiently.

A critical component is ensuring your landing pages are optimized for conversion. Even the best ad won't meet its goals if the page it leads to doesn't convert — factors like page load speed, user interface, and a clear value proposition, all impact conversion rates. Continuous testing of both ad copy and landing pages is necessary to increase relevance and scale what works.

Do you want to spend money retargeting customers who have already visited the site or who added items to their online cart before leaving? Then determine if customers are taking the action you intended. If your goal was to get customers to sign up for a newsletter or purchase a specific product, did they? Simply tracking user behavior around the ad isn’t going to get you there — you need to track the user across the entire journey.

The future of search engine marketing involves understanding how online interactions, such as a paid search click, connect to offline behaviors and in-store experiences.

Future SEM strategies will focus on targeting audiences. Leveraging first-party data to identify user behaviors more specifically, making ads even more relevant and personalized will continue to be important.

The importance of semantic search

The foundational element of paid search has historically been the keyword. Marketers meticulously researched, selected, and bid on specific terms they believed their customers would use. However, AI has driven a decisive shift away from this narrow focus on keywords toward a more sophisticated and holistic understanding of user intent.

Search algorithms, powered by natural language processing, now prioritize the "why" behind a search query over the specific "what" of the words used. The system recognizes that users searching for "project management best practices" and those searching for "what is project management" share the same underlying intent, despite using different keywords.

This evolution has given a much larger and more powerful role to broad-match keywords.

In the past, broad match was often seen as a risky way to spend budget due to its potential for irrelevant matches. Today, it leverages semantic search technology to connect ads with a wide array of relevant queries, including those that do not contain the original keyword terms at all. This allows advertisers to reach a larger, more relevant audience, often at a lower cost, by trusting the AI to understand the contextual and semantic relationships between queries and ad content.

Simultaneously, voice assistants and AI chat interfaces make longer, more conversational search queries increasingly important to understand. Users are asking full questions rather than typing fragmented keywords. This requires marketers to optimize their campaigns for natural language, anticipating the conversational phrases and detailed questions their audience might use.

Performance Max and Demand Gen

AI now integrates campaign management capabilities with automated, goal-based campaign types. These campaigns abstract away much of the manual setup and ongoing management, instead asking the marketer to define a business objective and provide the necessary inputs for the AI to pursue that goal.

The most prominent example is Performance Max (PMax). This campaign type uses AI to find customers and drive conversions across Google's entire advertising inventory, all from a single, unified campaign. Instead of bidding on individual keywords, marketers provide the system with "audience signals" (such as first-party customer lists or demographic information), "search themes" (topics relevant to the business), and a variety of creative assets (headlines, descriptions, images, and videos). AI then uses this information to test countless combinations of assets, channels, and audiences to find the most efficient path to the advertiser's specified goal, such as a target cost per acquisition (CPA).

AI-Powered Bidding and Ad Creation

At the most granular level of campaign execution, AI can now complete tasks and processes that once defined the day-to-day work of an SEM specialist.

Smart Bidding strategies are now the default for most campaigns. Rather than marketers manually setting and adjusting bids for thousands of keywords, AI-powered systems like Target CPA, Target ROAS (Return on Ad Spend), and Maximize Conversions use machine learning to make real-time bid adjustments for every single ad auction. The algorithm analyzes hundreds of signals in a fraction of a second — including device, location, time of day, language, and user behavior — to predict the likelihood of a conversion and set the optimal bid accordingly.

Creative development has also been automated with Responsive Search Ads (RSAs). With RSAs, marketers provide a pool of assets — up to 15 headlines and four descriptions — and AI dynamically assembles and tests them in thousands of different combinations. It learns over time which combinations perform best for various queries and user segments, effectively personalizing the ad creative for each impression. Recent platform updates have increased transparency, now providing marketers with real click and conversion data for each individual headline and description, offering more concrete insights into which messages resonate with the audience.

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