What is search engine marketing?

Compared to search engine optimization (SEO) that optimizes web site content and elements to improve organic search result ranking, search engine marketing (SEM) is a much easier and effective way of marketing a product online. It is also called "PPC" to some, the acronym for the method used to bid on keywords, "Pay per click."

Search marketing targets specific audiences: users that are already using search engines to discover answers to thier questions or to recover lost information. (John Battelle, "The Search") SEM is a leading form of advertising; and search is the leading way to find information.

SEM's mottos says: fish where the fish are. (LookSmart)

SEM has become a leading line item on many budgets for two reasons:

A. 80% of users find information through search.
B. The first position in a page of search results is three times more likely to be clicked on than the third result.

Therefore, it is essential to be in position 1 for your audience's search.

How it works:
Search marketers discover the keywords that searchers are using to find products. This is the first step in SEM. There is definitely an art to discovering the right keywords. However, after the keywords are selected, reporting on the hard numbers and ROI produced is a complete science. There are numbers that track *everything.*

For keyword research, there are plenty of tools to find the right words. Some words can best be found in your own backyard by harvesting words right from your web site traffic logs. Users have already found your site; but, how did they find it? That's valuable information not even your competitors will have access to!

Once a list is created and a campaign started with the SEM provider, keywords are bid on in a auction on a pay per click (PPC) basis. In the past, the top bid would automatically receive the top position. However, Search marketing providers have learned that whlie it is possible to buy quality; it should be able to be earned as well. Therefore, if an ad is successful and clicked on at a higher rate than competitors ads, that click through rate (CTR) becomes a factor in positioning.

A click on an ad is a vote for that ad; it improves the quality of perception of the product. Google for example uses this method; it rewards high click through rates with lower CPCs. It may then cost less to be in position 1 than position 2. Very, very innovative concept.

Ads are primarily keyword targeted, as you may notice by searching on Google, Yahoo, AOL, MSN, etc. SEM has evolved most recently into a laser beam allowing marketers to target local, regional, demographic and even behavioral properties of an audience.

SEM provides a leval playing field for business. Everyone advertising on the web is conducting business on about the same standards. SEM allows local mom and pop stores to fairly compete with big brands; we all know this would otherwise be impossible.

Little history: Search marketing has been around for about 10 years, with roots at Goto.com. SEM was born from organic search and the desire to be on the first page of search results without relying on organic search engine results to index sites drive traffic from search engines to a web site. Ultimately, Yahoo purchased the rights to this patent and sued all other SEM providers for using the technology.