Introduction to Search Engine Marketing (SEM):
The New Battleground for Customers
Search Causes Shift in Buyer Behavior
The tremendous surge in online commerce, and indeed the very power of the Internet to provide immediate and valuable information about all manner of product and services - is almost wholly attributable to the emergence of truly effective search engines. Lead by Google, this new generation of search engines can sift through the billions of websites on the world wide web and find just the most relevant information - all with a few keystrokes. This remarkable capability to organize the world's knowledge and present it in such an accessible way has thrust search engines into the heart of the buying process for consumers and businesses alike. In fact, a recent survey of 1,500 business professionals in B2B companies found that a staggering 93% start their purchase process with online research, and 64% go first to search engines.
SEO and Paid Search Ads Are Marketing's Response
As a result of the central role played by search engines in this new online buying process, search engine marketing (SEM) (i.e. SEO and paid search advertising) now plays the same central role in online marketing. Sellers of goods and services - even those who complete the transaction offline through a direct sales channel or retail store - have little choice but to invest in SEM if they depend on new sales leads to achieve their growth objectives.
This finding from Jupiter Research underscores the shift to SEM: paid search ads (which were introduced in 2000) and paid inclusion accounted for over half of all online ad spending in 2002, overtaking banner ads for the first time.
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.
What Is SEM?
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. More specifically, SEM traditionally includes three complimentary components - search engine optimization (SEO), paid inclusion and paid search engine advertising, though occasionally you will see the term used to mean just paid search.
From an SEM
standpoint, the focus with SEO 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, bidding prices can change minute by minute, and this type of program requires constant and diligent management.
More than just another set of marketing programs (to add to your already long list), search engine marketing is arguably the most powerful online marketing toolset available. Yet, according to a recent CyberAtlas study, 58% of marketing organizations invested less than 1% of their budgets in SEM, while 16% invested more than 25%. This has led Jupiter to distinguish between those who "get it" and those who don't. And those that do invest in SEM are able to capture and convert qualified sales leads that otherwise might have gone to their competitors.
A Word about Paid Inclusion
Once a popular method for obtaining search engine visibility, paid inclusion is still offered by the Yahoo! Directory and thousands of other directories where you must pay a fee to be included in their web-based directory. In return, these directories can provide quality inbound links and PageRank to your site. Since most of the directories provide essentially zero referral traffic, paid inclusion can safely be considered as a (small) part of an SEO program.
The Impact of SEM
With this in mind, lets consider the impact that search engine marketing can have - and why it is now a mandatory part of the online marketing plan (and budget!).
- SEM is unmatched at delivering highly targeted visitors to your web site. According to CyberAtlas, 50-70% of all website visitors come from search engines.
- Search engine position is now considered a primary indicator of the stength of the brand, and so SEM is now a required component of online positioning and branding efforts.
- SEM boasts the lowest cost per qualified lead of any lead generation program, online or offline. Acording to DoubleClick, SEM programs are 62% more profitable than the next best options.
- effective SEM initiatives can significantly impact revenues in a matter of weeks, and are thus the best use of the marketing budget.
- Corporate executives and even members of the Board of Directors are aware of SEM's importance and are now expecting top search engine rankings from their marketing teams.
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. Learn more about the relationship between search position and click-through rates.
SEO and Paid Search - the Ying and Yang of SEM
SEM breaks down into two very different categories: " natural search engine optimization" and " paid search". Natural (also called "organic") 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 ads (also called pay-per-click, or PPC) are listed in Google 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 or organic 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 (organic) 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 (the clickable blue
link) the text of which comes directly from the page's <title> tag. Next we find 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 organic search results.
SEM Best Practices - A Balancing Act
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 to SEM. Many 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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