INTRODUCTION TO SEARCH ENGINE MARKETING (SEM)-
The New Battleground for Customers

What Is SEM?

While its more important than ever to get that choice position in the search results, it now takes a whole new approach to do so. For marketers, the new search technologies mean you can't compete without a sophisticated SEM strategy along with a whole new cadre of software tools and coding techniques. Enter the fast-emerging specialty of Search Engine Marketing.

Search Engine Marketing (a.k.a. "SEM") refers to several classes of marketing programs that are collectively designed to give your website more visibility on search engine results pages, and more qualified visitors to your web site. So SEM is the process of helping web sites to get found in Google and other search engines, and it is vitally important to any company hoping to attract visitors to its web site.

Search Engine Referrals = Qualified Prospects

It is important to understand that not all sales leads are created equal, and the visitors that click through to your site from search engine results pages (called "SERPs") are not your average tire-kickers. By virtue of the fact that they found you in a search and clicked through to your web page, they are self-selected and self-motivated to seek you out - because they have a need for something you may have. Thus, visitors referred to your web site by search engines are perhaps the most highly qualified prospects you can find.

Why Should I Care About SEM ?

If you are not currently executing on a sophisticated SEM strategy, then it is almost a certainty that you are suffering a "leakage" of sales leads to your competition. The competitive advantage enjoyed by companies who develop and deploy effective search engine marketing strategies is staggering. For example, if your company is ranked 1st for a search term, you can expect to receive nearly 20% of all click-throughs for that term, whereas, if you are 12th, you can expect to receive just 1.6% of all click-throughs for that same term. For more on the relationship between search position and click-through rates, see our Primer on Search Engine Optimization, especially if you think that keyword stuffing your HTML still works!

Natural Search and Paid Search - the Ying and Yang of SEM

SEM breaks down into two very different categories: " natural search" and " paid search". Natural search refers to the search results ( a rank-ordered list of web pages) returned by the search engines, that best match your search query. The natural search results usually appear on the left side of the results page, sometimes below the first paid search results. In contrast, paid search listings (also called pay-per-click, or PPC) and search engine ads which are listed in Google example based on how much the advertiser is willing to pay for each click-through combined with how much ad revenue they generate for Google.

Top positions in paid listings, then, essentially go to the highest bidder, regardless of the quality or relevancy of their web site to your search query. On the other hand, the natural search listings are served up by your search engine specifically because they are deemed to be the most relevant pages from among the billions of web pages on the Internet.

In the example below of Google search results for the term "digital rights mangement", the natural search results are circled in blue, and the paid search results are shown encircled in red. .

Each search listing includes a title of the page (a clickable link) and a description of the page which is assembled from information that the search engine finds on that page (called the "snippet").

Paid search listings are easily confused with natural search listings and in fact the US government has recently stepped in to make sure that consumers are protected from these deceptive advertising practices. Despite the confusion, SEM research shows that people are four to ten times more likely to click on a natural search result than on the paid search ads. So people have learned from experience that your are taking a risk by clicking on the "sponsored listings" instead of the natural search results.

Paid Inclusion

Once a popular method for obtaining search engine listings, paid inclusion is offered now only by second and third tier search engines and a variant is offered by the Yahoo! Directory

Effective SEM Requires Balance

From an SEM standpoint, the focus with natural search is on achieving a high rank or position in the search results for target keywords by optimizing web pages for those keywords such that they have high "relevancy" for the chosen search terms from the search engine's point of view. This process is called search engine optimization (SEO). With paid search and paid inclusion, the focus is on generating the most qualified click-throughs at the lowest cost per click. In the case of paid search campaigns, where you are bidding against competitors for paid search positions, remember that bidding prices can change minute by minute, and this type of program requires contant and diligent management.

While any one branch of SEM can generate results, the most effective use of your marketing budget is a balanced investment across all three SEM programs. Building effective SEM programs requires a deep understanding of each branch of SEM including the constantly evolving set of the techniques, tools and technologies unique SEM. Most companies find it to be cost-effective to hire an SEM firm as a marketing partner, instead of spending the time and money to build internal expertise.

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