Search Engine Marketing (SEM)

Quick definition: Search engine marketing uses paid ads that appear at the top of a search engine results page to drive customer action and engagement.

Key takeaways:

• Search engine marketing now usually refers only to paid ads, while search engine optimization refers to free search engine marketing efforts.
• SEM matters because most customers searching for a product in a search engine are ready to buy.
• SEM can target loyal customers and create brand awareness.
• While search engine marketing may not be the last touch in a customer’s journey, it is an essential factor leading to customer conversions.

The following information was provided during an interview with Austin Meisel, corporate trainer for customers using Adobe Advertising Cloud.

What is search engine marketing?
What is the difference between search engine marketing and search engine optimization?
Do companies use SEM and SEO in tandem?
What is the process of launching a search engine marketing campaign?
Do different search engines require different strategies?
How have artificial intelligence and automation improved SEM?
How important is SEM to a company’s overall marketing strategy?
How can companies make their SEM efforts more effective?
Do companies target customers individually or based on customer segments?
What are some problems companies face with search engine marketing?
What is the future of SEM?

What is search engine marketing?

Search engine marketing is the practice of using text advertisements that appear at the top or bottom of a search engine results page (SERP). Marketers typically associate their advertising to top-ranking SERP results.

Marketers pay for their advertisements to appear alongside these results. This increases a website’s visibility—which is, of course, the very point of search engine marketing. Ads can be small and static; they can also be more graphically interesting and interactive. It’s up to marketers to decide what looks best on the page on which they’re advertising.

What is the difference between search engine marketing and search engine optimization?

Traditionally, search engine marketing (SEM) referred to any marketing done through a search engine results page, which included both paid advertising and organic search results. In the last few years, SEM has come to refer specifically to pay-per-click advertising, while organic marketing efforts are known as search engine optimization (SEO).

Both SEM and SEO are different ways of achieving the same goal: driving quality web traffic to your site. Search engine marketing allows you to quickly and more effectively pay to deliver an ad on a specific search term, getting your ad to the most relevant person at the right time. SEO is about putting relevant search terms on your web pages and then slowly growing your quality score so that you are showing up in an organic space.

SEO is great when you have a low budget and you are trying to do things 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 have to go through your website, make adjustments, and wait.

Search engine marketing, on the other hand, allows you 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, you can also pay to have your ad show up on the results pages for the search terms “hair ties” and “barrettes.”

Do companies use SEM and SEO in tandem?

There are old-school companies who probably would use one or the other. But in today's market, people are realizing that using both together is not a detriment, and they’re going to feed into each other. If you have strong SEO, you can use SEM to go after fringe areas.

With search engine marketing, you can start to try other keywords and find other areas where you think additional customers might be searching. And as you get there, as you get those new customers to convert, you can use that information from them to then feed back into your SEO and continue to grow your SEO.

What is the process of launching a search engine marketing campaign?

The most important thing to know before you begin a search engine marketing campaign is why you want to advertise and what you want to achieve with your customer. Are you trying to get a customer to take action or are you trying to build brand awareness?

There are two main factors to consider when discussing an SEM campaign. The first is location. When it comes to search engine marketing, there is a limited scope for placing the ad. Google, Bing, and Yahoo are really the only spaces you’re competing for.

The second factor is how much you are willing to pay per click. You have to look at performance and determine how you want to spend your marketing dollars.

The two most common search engine marketing campaign strategies are targeting brand-loyal customers and building brand awareness. With a brand loyalty strategy, a company is reaching out to customers who have already taken an action and might be interested in learning about new offerings. With a brand awareness strategy, you’re reaching out to someone who is searching generally but hasn’t decided on a specific company or brand.

For example, in an SEM ad campaign from Nike, the company would put ads on both specific and general search terms. The ads on the search results page for a specific term like “Nike shoes” would target brand loyalty customers, while the ads on the search results page for terms like “athletic shoes” would try to reach out to customers who aren’t aware of what Nike offers.

Do different search engines require different strategies?

There are some differences between the search engines. Google tends to be the biggest with the most volume. Bing, while it might not have as much volume, might be a little bit cheaper. The quality between the search engines can also vary slightly.

When it comes to ad types, the search engines are pretty similar, but there are some small nuances between the visuals or the images that might get delivered or how you can display your text ad. Companies can take these small differences into account when deciding whether to make adjustments to their ads.

How have artificial intelligence and automation improved SEM?

What we see a lot in today's world is that more and more companies are using optimizing platforms to make their ad bids for them. They are essentially using historical data to make bidding decisions. We're allowing our algorithms to build on top of that information to make assumptions about how to more efficiently target audiences and optimize spend so that we deliver ads to customers that are likely to convert.

There are customers today who do still manage their own search engine marketing campaigns, which requires quite a bit of a manual adjustment. Some customers are typically running paid ads on between 1,000 and 10,000 keywords. From a manual standpoint, it can be really time-consuming to go through and look at the performance of all those keywords and then go in and make adjustments.

From an optimization standpoint, using automated platforms allows companies to let the AI and machine learning make decisions for them on how to adjust their bids. So some of these platforms are making big adjustments every hour — they're analyzing and looking at all 10,000 keywords individually and also how they perform together.

How important is SEM to a company’s overall marketing strategy?

In the digital age that we live in now, nine times out of ten, customers are going to find out about a company from searching online. And most customers searching for a product are ready to buy. It's really important that you have a good search engine marketing and SEO strategy because you're being delivered customers that are ready right then and there to potentially buy.

By deploying a good SEO or a good search engine marketing strategy, you’re going to drive effective, relevant content and relevant traffic to your sites a lot faster and capture customers that you wouldn't capture in a store or out walking around.

How can companies make their SEM efforts more effective?

There are three main things a company can do. The first is to better understand the target audience you’re trying to reach. The second is to examine your tracking efforts — how deep are you diving into your customers’ information? Are you trying to understand their behaviors beyond the click?

Third, companies should optimize between all of those behaviors and efficiently spend the budget. 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 whole journey.

Do companies target customers individually or based on customer segments?

A little of both. Typically, companies focus on a group because it’s slightly easier. But there are instances where a company can specifically target a customer. An example would be a customer who abandoned a cart. They are still part of a group — customers who abandoned carts — but it's specific enough that it's related to an action that happened on your site, as opposed to a larger segment like “females between 30 and 35 years old who are into sports and outdoor activities.”

What are some problems companies face with search engine marketing?

The value of search engine marketing can be underestimated. Generally, companies only attribute a successful conversion or action to the last touch — the final channel that gets a customer to convert. Paid search usually only gets credit if the customer converts directly after clicking through an ad on a search results page.

But what we’re finding is that SEM is rarely the last touch. Someone could click on a paid search ad, go to your website, and then decide not to buy anything. A week later, they get an email — because now they're in the system — that says, "Hey come back to our site, purchase this." The customer may still not be ready, but the next day they see a display ad and decide to finally purchase. Only the display ad would get credit for the conversion, and so companies might not see the value of search engine ads.

If it weren’t for that paid search ad, though, the company wouldn’t have had the customer’s information to send an email or deliver the display ad. So being able to look at your marketing channels holistically gives you a better idea of what channels are influencing each other.

For a long time, attribution and success metrics were siloed, with email marketers only looking at what happens in the email world and display marketers only looking at display ads, but teams are starting to dig into other channels to see how the influence is happening.

Another problem lies with not tracking metrics other than conversion. In the last two or three years, we've seen an increase in customers wanting to know the mid-funnel metrics, which are behaviors that customers are doing or taking after they click an ad. For a long time, people assumed that every click and every conversion was the same.

But as we started to deploy analytics and as companies started to look at other behaviors happening on the site after the click and before the conversion, advertisers got a better idea of how customers are behaving. They can better figure out which customers take longer to convert.

The other piece that can be challenging is understanding how to allocate that paid search budget in the most effective way. Companies need to really think about not just how do my keywords work individually to their best advantage but how do they work together? What's the marginal return and that payoff between different keywords?

What is the future of SEM?

Right now, what we’re trying to figure out is how we can better connect the experiences customers have with a brand across all the different types of marketing channels. How does the online experience connect to a customer’s experience offline or in a store, and how is paid search connecting online and offline behaviors?

The future for paid search is really being able to target specific audiences even better and more closely. We do retarget lists for search ads already, but we're getting to a world where we're going to be able to better identify people and their behaviors from first-party data and start to target them more specifically. So ads will become even more relevant.

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