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What Search Engine Marketing (SEM) is and How It Works

November 23rd, 2022 | 5 min. read

By Kim Kovelle

What Search Engine Marketing (SEM) is and How It Works
 

"Googling" products and services is big business. In fact, 54% of all product searches start on Google, reports Search Engine Watch. And the first five results get 68% of the clicks.

So if your company isn't showing up high on those search engine results pages — SERP for short — you might as well not exist, to some degree. Those are some daunting odds.

So what can you do to elevate your presence on Google? Advertise with search engine marketing, aka SEM. Here at Zoe Marketing & Communications, we've helped clients harness digital advertising for 15+ years. Using this experience, we can help you navigate the basics of SEM — and decide whether it's a good fit for your marketing strategy.

In this blog, we'll cover these key factors:

  • What search engine marketing is, in a nutshell

  • How SEM works (i.e., hello, Google Ads)

  • What your SEM ads will look like (5 common types)

  • Who it's good for — and the benefits

  • How much SEM costs

  • Doing it yourself vs. getting a marketing agency

By the end, you'll have a deeper sense of what SEM is and how it might fit into your marketing plans.

What search engine marketing is, in a nutshell

Search engine marketing, or SEM, increases websites' visibility on search engine results pages, or SERP. It can also helps businesses’ ads show up on other websites, apps — even in email.

SEM refers to paid search tactics. That's a relatively new shift: At one point, SEM was an "umbrella" that also covered search engine optimization, or SEO. Since SEO is organic/free, it’s a slower process. SEM can deliver clicks much faster.

Put another way, SEM is the process of growing traffic to your website by buying ads on search engines. It's all about boosting what shows up as people search and browse.

How SEM works (i.e., hello, Google Ads)

We'll focus on Google, since it holds about 92% of the search engine market. You can also consider Microsoft Advertising (formerly Bing Ads). But let's look at Google Ads.

Bidding for keywords

Keywords are the heart of how Google Ads works. Say someone's searching for a preschool or doctor, and that's your business. If these searchers are located near you, you want to pop up high for them.

But other local preschools and docs want that, too. That's why, with SEM, you're literally bidding on keywords. You tell Google how much you're willing to pay per click — aka "PPC."

Then, when someone searches for your term, you're entered into an auction against other bidders. Sometimes you win; others, you don't. Success depends on the max you're willing to bid and a "Quality Score" Google gives your ads and landing pages. The more relevant they are, the better your chances.

Competition and geography

Keep in mind some keywords are "hotter" than others. For instance, for mortgage and attorney keywords, the cost per click (i.e., CPC) is a whopping $47-$55; it's closer to $3 for health and medical, travel and hospitality, and school and education, for example.

Also, as we hinted at above, you can target ads to certain geographic areas for better results.

What your SEM ads will look like (5 common types)

So, when folks are Googling for your keyword and your bid wins, what do your ads look like? 

Depending on how you set them up, Google Ads delivers certain words and images. Here are a few common examples.

1. Google Ads Search (text based, in results)

These are based on keyword searches and appear at the very top of Google results. They have several lines of text (which, again, you control) and look like an ordinary result — except for the small "Ad" tag that appears to its left.

Google Ads Search Text Results

 

2. Google Ads Display (image based, on websites/apps)

These designed ads will show up on websites and apps — 35 million of them, to be exact, Google says. So, these ads aren’t specifically tied to “Googling,” since you can target specific audiences. But since they’re run by a search-engine (i.e., Google), they fall under the SEM umbrella. Here’s a sample: A CVS ad appears on Weather.com.

Google Ads Display Result

 

3. Shopping or 'product listing' ads

These eye-grabbing ads feature a photo of the product, title, cost, source (ideally you) and the number of star reviews, if available. They're labeled as ads, too.

You can set these up with the Google Merchant Center platform, as well. And they can also appear in other places, including Google's "Shopping" tab and YouTube.

Google Ads Products Results

 

4. YouTube ads

Remember, YouTube is a Google product, too. When folks search for your keyword on the video platform, it might show up as text in the search results — again, with that ad tag. This is a text version; “display” or designed versions are also an option.

Google Ads YouTube Results

5. Gmail ads

Like the general text ads, these have an "Ad" tag. But here, they appear as an unread email at the top of your "Promotions" inbox.

Google Ads Gmail Ads

 

Who it's good for — and the benefits

SEM is "good for" any business with services or products to sell. Granted, if you're "selling" dental services, you won't appear in product listings for tangible items.

Even so, if you're looking to show up higher in search results, SEM has something for everyone. Here are a few of SEM's perks:

  • Strong "intent": People are often in a decision-making phase when searching for keywords. So getting in their line of vision is huge.

  • Branding and awareness: Some folks are just starting to research. You'll get in front of them during that phase, too.

  • High localization: You can target specific cities, regions and even a radius around you.

  • Good ROI: That's short for "return on investment." Google Ads notes that businesses average $2 in revenue for every $1 spent on its platform. 

  • Speed: SEM gets faster results than SEO. With a caveat: Your SEO should be strong, too. After all, Google says, for every one ad click, businesses average five clicks on their organic search results. Seeing you in both the ads and regular results builds trust.

How much SEM costs

Like most marketing, SEM costs vary. As we've mentioned, the cost-per-click can be higher or lower depending on your industry. But businesses also tend to double their investment.

So what's the bottom line? Monthly costs for small-to-mid-sized businesses can span from a few thousand dollars to $10,000+, which includes the cost of the ads and the cost for an agency to manage them.

At Zoe, our SEM rates average $2,500 with a 35% management fee, which brings the total to $3,375. Our pricing plans are structured to group SEM with other tactics for best results, so your total marketing rates may be higher.

It's worth noting that about 65% of small businesses use SEM, WebFX adds.

Doing it yourself vs. getting a marketing agency

You may be wondering: Can I do this myself and skip the agency fees? Yes, you can — as long as you have someone on staff dedicated to managing it (or learning how to).

SEM isn't a "set and forget" style of advertising. Beyond the initial setup, it requires monitoring, tweaking and optimizing your keywords. In other words, it's constant work and takes trial and error, especially if you're new to it.

Marketing agencies have fuller experience with SEM and how it works. They can manage your ads, so you're not "learning on the way" and potentially wasting money.

What are the next steps for tapping into search engine marketing?

SEM is a powerful addition to your marketing toolkit. In this article, we took you on a detailed tour.

You learned that SEM is the process of growing traffic to your website by buying ads on search engines. It involves bidding on keywords in auctions — typically with Google Ads. We also covered examples, benefits, costs and looked at doing it yourself vs. working with an agency.

Ready to rev up your SEM with an agency partner? Talk to your advisor at Zoe Marketing & Communications. We'll tap into our 15+ years of digital ad experience to deliver top SEM results.

Still researching your options? Explore these blogs for the top next steps:

Kim Kovelle

As Zoe Marketing & Communications’ content manager, Kim Kovelle brings nearly 20 years of writing and editing experience in metro Detroit. She has strong roots in community journalism and a knack for making complicated topics make more sense.