Keith Coppersmith
Keith Coppersmith 10 October 2019
Categories Advertising, B2B, Ecommerce

A Complete Guide to SEM (Paid Search)

Search Engine Marketing (SEM) is the process of driving website traffic by purchasing ads on Search Engine Results Pages (SERPs). Originally, SEM included all marketing activities on search engines (SEO & Search Ads), but over time, the industry has adopted the term to refer solely to paid search advertising. Not to be confused with display ads, which use third-party websites rather than search engines as ad delivery platforms.

If you're looking to learn more about Search Engine Marketing (SEM) or paid search, you've come to the right place!What is SEM1

How SEM works:

  1. The advertiser picks relevant “keywords” or “key phrases” that they want their ads to show up for.
  2. The advertiser then states how much they’re willing to bid per click.
  3. When consumer searches trigger any of the associated keywords or phrases, ads will get shown/ranked dependant on who bids the most, along with several other variables.
  4. If the consumer clicks on an ad, the advertiser is charged for the click.

A Brief History of Search Ads

SEM History2

  • 1990 - The world’s first search engine, Archie, was created in 1990 by Alan Emtage. This engine searched FTP sites to create an index of downloadable files.
  • 1994 - AltaVista, the first search engine to allow natural language queries was created, offering unlimited bandwidth and advanced search features.
  • 1994 - Yahoo Search begins as a collection of favorable web pages that included a man-made description with each URL.
  • 1996 - Google is started by Larry Page and Sergey Brin at Stanford University as a new type of search engine that analyzed the relationships among websites.
  • 1997 - Yahoo turns down an offer to buy Google for $1 million (a huge oversight considering the fact that Google is now worth well over $100 billion).
  • 1999 - GoTo, one of the first search engine companies, was founded and successfully introduced the first pay-for-placement search engine service for brands.
  • 2000 - The online advertising market crashes after the dot com bubble bursts as many businesses went bankrupt, scaring away advertisers.
  • 2000 - Google introduces AdWords and a “Quality Score” model, whereby websites were ranked by bid price and historical clickthrough rates for better relevance.
  • 2002 - Google introduces CPC bidding, allowing advertisers to optimize their campaigns based on “max” CPC bid rather than “actual” CPC bid.
  • 2004 - Google’s search market share hits a peak of 84.7% of all searches. They IPO with a market value of $23.1 billion.
  • 2005 - Google launches Google Analytics, a platform that allows advertisers to better manage their ad campaigns.
  • 2008 - Google made several major changes to their Quality Score calculation for more relevant rankings and better user experiences.
  • 2010 - Microsoft Search was relaunched as Bing. They partnered with Yahoo to syndicate their ads on Yahoo Search in an attempt to steal market share from Google.
  • 2014 - Online advertising spend continues to rise, with the mobile advertising market growing by over 90% annually in the US.
  • 2018 - Google consolidates and rebrands AdWords and DoubleClick as “Google Ads” and “Google Ad Manager”.
  • Present Day - Search engines are continually optimizing their features and algorithms to provide better ad targeting for various devices.

Why SEM Works for Businesses

Why SEM3


If you’re wondering what the potential pros and cons of paid search are, find all the relevant answers and more in the following article:

The Pros and Cons of Paid Search Advertising

Search Advertising Platforms

SEM Platforms4

Here are the three main search ad platforms that you’ll be choosing from (figures updated as of June 2018):

SEm PlatformsA4

Whatever you choose, keep in mind that these platforms aren’t necessarily competing products. As a matter of fact, they can effectively complement each other, allowing you to expand your ad’s reach to new and unique territories and audiences.

Here’s a guide that should help you decide on which platform best fits your brand’s needs:

SEM Platforms and How They Differ

Search Advertising Statistics

SEM Statistics5

Over the years, search advertising has proven to be an effective channel for generating qualified sales leads. If you’re not already convinced of the huge potential value that search ads bring to the table, maybe some of these all-compelling statistics will help entice you:

SEM StatisticsA5

Feel free to check out our blog post for more online advertising trends and statistics to help shape your search ad campaigns: 

40 Online Advertising Statistics You Should Really Know

How to Build a Solid Search Advertising Strategy

SEM Strategy6

  1. Developing a Search Ad Plan

The first step to any successful search ad campaign will always be to plan. Strategically documenting the process is essential to make sure everyone’s on the same page and that overall campaign progress can be measured.

Here are the basic steps you’ll need to cover in your SEM plan:

SEM StrategyA6

To find out more about how to plan these steps in detail, be sure to have a read of our article that dissects the search advertising planning process:

How to Develop a SEM Plan That Works for Your Brand

  1. Researching and Selecting Keywords

This is arguably the most important part of your campaign because it will lay the foundations for the rest of your efforts. Your selected keywords will determine how easily your audience can find you as well as how relevant your ad will be to searchers.

Certain keywords will perform better than others, with huge differences in terms of bidding competition and cost-per-click. Not to mention the fact that competitors are always coming, going, and shifting strategies. So, it’s highly recommended that your keyword testing and optimization efforts be ongoing. The last thing you want to do is waste resources on tactics that are no longer effective.

Find out everything you need to know to research and select the right keywords for your brand with our comprehensive post on keyword research:

The SEM Guide to Researching and Selecting Keywords

  1. Creating Search Ad Copy

Once you’ve selected the best keywords to target, it’s time to start thinking about how you’re going to entice your audience to make that all-important click. This is where you need to do a bit of convincing, so it definitely pays to be a good copywriter.

Copy is the first thing a user sees when they’re exposed to a search ad, and first impressions are incredibly important for businesses because they can mean the difference between establishing a positive relationship and losing that visitor’s interest for good.

SEM Copy7

Always make sure your ad copy is relevant to the keyword you’re targeting. When people use search engines, they naturally filter out and ignore ads that aren’t relevant to them. They’ll do the same to you if your ad copy doesn’t match their search intent.

Apart from relevance, there are a few other persuasive techniques for writing great ad copy. You’ll find detailed steps in our corresponding article:

How to Write Great Copy for Search Ads

  1. Optimizing Paid Search Campaigns

As mentioned earlier, it’s important that your SEM campaign optimization efforts aren’t restricted to any one point in time. Testing and improving is an ongoing process that needs to be addressed at regular intervals so your strategies remain competitive.

There are several areas where optimization efforts can have very positive effects for your campaign. Things to pay attention to are:

  • Search ad account structure
  • Keyword list expansion
  • Negative keywords
  • Bidding strategies
  • Audience targeting strategies

Each of these facets can always be further improved, no matter how much you’ve optimized your strategy in the past. The thing about paid search (and most other marketing strategies) is that it’s definitely not set-and-forget.

If you’re looking for actionable ways to optimize your SEM campaign, we’ve got you covered:

9 Ways to Optimize Your Paid Search Campaigns

  1. Building a Relevant Landing Page

You’ve selected your keywords and written the ad copy. Now’s the time to starting thinking about creating an optimized landing page to drive users to. If your ad’s message is the tip of the iceberg, then your landing page’s message needs to cover the rest of it.

If a user lands on your website via your search ad, you’ve already paid for the click. The least you can do at this point is make sure you’re doing everything you can to turn that click into a conversion.

Here are some of the essential elements of any successful landing page:


Apart from this, you should also be minimizing the amount of distractions on your landing page that could divert a user’s attention away from your call-to-action.

For more best practices on building PPC landing pages, check out our recent blog post:

How to Optimize Your PPC Landing Page for More Conversions

  1. Keyword Bidding Strategies

Depending on your campaign’s goal, you can select a bidding strategy that’s tailored to drive a specific metric. So, whether you want to focus on driving more clicks, impressions, or conversions, there’s a bidding strategy that can help.

Right off the bat, it’s probably a good idea to stick with default manual keyword bidding because that’s the best way to learn the ropes. This allows for you to run tests and evolve your bidding strategy over time to make it increasingly more efficient.

SEM Keyword Bidding9

However, if you’re lucky enough to have “clean” data from previous search ad campaigns, you have the option of choosing an automated bidding strategy. With automated bidding, you can use your historical conversion data to optimize your bids for conversions or conversion value. 

To learn more about search ad bidding strategies, have a quick read of our post:

10 Proven Keyword Bidding Strategies to Optimize Your AdWords Campaign

  1. Account Structure and Budgeting

The way you setup your SEM account structure will dictate how your ads get triggered, as well as the overall efficiency of your campaign. That’s why it’s important to structure your account and budgeting well form the very beginning.

SEM Structure10

First off, choosing the right campaign type tells the ad platform what to optimize for and the types of users to prioritize. You should also be organizing your account well at the campaign, group, and keyword levels to facilitate better internal processing. 

Then there’s campaign budgeting. How much is too much? Well, that depends on your test results because you should never be allocating significant budgets towards untested ad campaigns. Once you’re able to prove the return from your test ad spend, you can starting thinking about scaling up your budget and maximizing conversion volume.

Want to know more about AdWords account structuring and budgeting? We’ve got a post just for that:

AdWords Account Structure and Budgeting Best Practices

  1. Measuring SEM Campaign Performance

Like any other marketing function, SEM is built on the fundamental cycle of PlanExecuteReview, and Optimize. Campaign tracking is absolutely crucial for any PPC effort because of how easy it is to start throwing money down the drain. Really, really quickly.

SEM Metrics11

How to effectively track your campaign’s performance depends on your overall goal. Once you’ve defined that, it trickles down to what strategies you should be choosing and what metrics to keep an eye on. They’ll most likely include the following:

For more on measuring your campaign’s performance and how to tell a story from the data, have a read of our recent article:

Critical Metrics to Measure the Success of Your Search Ads

Tips to Improve Your Quality Score and Ad Rank

SEM Quality Score12

There’s no question that you should always be looking for ways to improve your quality score. Any uplift in this metric will directly reduce your cost-per-click, which means a higher return on your ad spend. Everybody loves a good discount!

SEM Quality ScoreA12

On top of that, it’ll naturally increase your chances of ranking higher, which will mean more clicks overall compared to your competitors. And since cost-per-click is calculated based on the quality score and CPC of the ad below yours, any increase in quality score will act to make your competitors’ clicks more expensive. That’s one hell of a win-win!

Want detailed steps to improve your ad’s quality score? Check out the article below:

How to Improve Your Quality Score and Search Ad Ranking

Essential Tools for Your SEM Campaign

SEM Tools17

Just like most other marketing functions, many aspects of SEM can be automated. The right suite of tools can help speed things up and reduce the chance of human error. Not to mention everything becomes easier to track, making it easier to be data-driven.

There are all sorts of tools you can take advantage of to make paid search marketing a little less overwhelming. Here are just some areas you can optimize with software:

  • Keyword Strategy (finding, qualifying, and tracking keywords)
  • Ad Copywriting (optimizing copy for search engines)
  • Ad Formatting (ad types, sizes, and placements)
  • Competitor Research (competitor keyword and audience targeting strategies)
  • Account Management (managing ads at account/campaign/group level)
  • Budgeting (intelligent tools for optimizing SEM budgets)

So, you’ve got quite a few options here when it comes to choosing an SEM tool. But your best bet will always be to research which tools best fit your business model and advertising strategy. 

For a list of great tools to try out free-of-charge, check out our awesome post below:

6 Free Tools That Make SEM a Breeze

SEM Mistakes to Avoid

SEM Mistakes16

It doesn’t really take much for an ad to perform well (just the right copy shown to the right audience). That’s why search marketing is one of the best options for companies who want immediate results.

That being said, it also means that barriers to entry for search advertising are very low, which naturally makes the search advertising landscape extremely competitive. It’s also very easy for businesses to spend on search ads. So, without the right knowledge, it’s possible to waste a lot of resources on tactics that don’t push the needle.

Don’t make the same mistakes that have caused many a search ad campaign to fail. Look out for these obvious blunders and avoid them at all costs:

10 Rookie SEM Mistakes You Could Be Making Right Now

Do Paid Search Ads Affect SEO?


The short answer? No. Search ads and SEO don’t directly affect each other. However, you could still definitively say that doing well with your search ad campaign complements your SEO strategy, and vice-versa.

First off, both concepts are highly dependent on keyword data to determine search intent. So, any information you collect in one department serves to aid in the other. Secondly, the success of both strategies is also highly dependent on the quality of the corresponding landing page. Most best practices carry across in that sense as well.

So, although neither concept has a direct impact on the other, it’s good to know where there’s a relationship because they can definitely be complementary.

To learn more about how you can create a few win-win scenarios for yourself, be sure to check out our article:

Uncovering the Relationship Between SEO and Paid Search

Competing in the Search Advertising Market

SEM Competition13

The search advertising landscape is highly competitive because of its low barriers to entry. On one hand, this means you have to play your cards right when it comes to your keyword and bidding strategies. But on the other hand, it’s a pretty simple task to collect information about your competitors’ efforts and use it to improve your own campaigns.

The more you know about the competition, the more competitive you can be. This post will help you research, analyze, and stay one step ahead of your competitors in the search ad market:

How to Spy on Your Search Ad Competitors

Going one step further, you can actually use search advertising to effectively poach potential customers from your direct competitors. This basically involves aggressively bidding on your competitors’ keywords to have your ad shown higher on SERPs.

With the help of SEM analytics tools, you can analyze your biggest competitors and find gaps in their value provision processes. You can then tailor your ads to address these weaknesses and display them to people searching for that brand, making your brand outrightly more attractive.

For more on poaching traffic and customers from the competition, have a read of our article:

How to Steal Customers the Right Way with Paid Search Advertising

Taking SEM to the Next Level

SEM Next15

Now that you know the basics of paid search, it’s time to start looking at more advanced SEM strategies that can take your campaign to the next level.

Search ad platforms usually have a range of features you can use to further optimize your campaign’s efficiency and maximize returns. Furthermore, new tools and features are constantly being developed and released, so it definitely pays to stay ahead of the game.

This list of advanced search advertising strategies will help your campaign reach new heights:

Advanced SEM Tips for Businesses

Always Be Improving

SEM Improve18

The world of paid search is incredibly competitive, so it really helps to arm yourself with the right knowledge before venturing into new areas. Remember, it’s incredibly easy to aimlessly waste resources on any form of PPC. So, learn the best practices, research new strategies, and keep improving your campaign one step at a time to maximize your advertising returns.

Congratulations on making it through to the end of the article! It’s a real behemoth of a post and we want to say a big thanks!

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