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What is Search Engine Marketing (SEM) and how does it work?

By Academy Xi

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What is Search Engine Marketing (SEM)

Discover how to drive targeted traffic to business websites using the power of paid advertising and strategy.

What is SEM?

Search Engine Marketing (SEM) is a form of online advertising whereby businesses can promote their online shopfront (website) by paying for ads to appear on search engine results pages, otherwise known as SERPs. Paid advertising will often be displayed above or below the organic search results and are labelled as ‘sponsored’ or ‘ad’.

 Advertisers bid on keywords related to their business products or services and their ads are shown to users who search for those keywords. The ultimate goal of SEM is to drive traffic to a website and generate sales or leads. By monitoring and optimising SEM campaigns, business marketing teams can improve their ad performance and maximise their return on investment.

Some helpful key terms related to SEM include:

 Cost per click (CPC)

This refers to the amount of money you pay each time someone clicks on your ad.


The number of times your ad has been shown on a search engine results page is known as the number of impressions.

 Click-through-rate (CTR)

The percentage of people who clicked on your ad after seeing it is the CTR.

 Cost per thousand (CPM)

The amount of money you pay for every 1000 impressions of your ad is referred to as CPM, with the M being the Latin Roman numeral abbreviation for thousand.

SEM versus SEO: what’s the difference?

While both SEM and SEO are strategies used in digital marketing to increase visibility of a website in search engine results pages (SERPs), they differ in their approach and objectives.

 With SEO the focus is on optimising website content, structure, and technical elements to make it more appealing to both search engines and users. The goal with SEO is to improve website ranking in organic search results, increasing the generation of free traffic to a website over time. On the flipside, SEM focuses on using paid ads to target specific groups to drive leads and sales.

The primary difference between the two is that SEO is playing the organic long-game, while SEM is trying to hit marketing goals in the short-term with the paid ad approach. 

How an ad auction works

Advertisers bid on keywords that are relevant to their business offering and create ads using the keywords to display in search engine results pages. When a user searches for a keyword, the search engine runs an auction among advertisers who have bid on that keyword, with the winner being the advertiser with the highest bid and highest ad quality score. The winning ad is displayed in the search results and the advertiser pays the search engine a certain amount for each ‘click’ on their ad.

SEM strategy

Creating and managing paid search campaigns to drive targeted traffic to a website is the foundation of an SEM strategy and it generally involves the following key steps.

  • Defining objectives

Identifying what the objectives of the campaign will be, such as lead or sales generation and then setting measurable goals.

  • Keyword research

Investigating which keywords target audiences are using for their searches and then placing bids on them.

  • Ad creation

Develop compelling ads that incorporate the targeted keywords that will appeal to the target audiences.

  • Landing page optimisation

Create a landing page that is relevant to the ad and optimised for conversions. Also ensure it is optimised for a range of devices.

  • Campaign tracking and optimisation

Monitoring campaign performance and making data-driven optimisations to improve results over time.

  • Keyword volume and competition

The number of searches for a particular keyword or phrase is known as the keyword volume. Higher the volume, generally the higher the demand for a particular product or service – but these higher volume keywords are often more competitive, which means more advertisers are likely to be bidding on them. This can increase the cost per click.

  • Account and campaign structure

These are both critical components of an effective SEM strategy. Keeping your account and campaign structure well organised can help businesses effectively manage and optimise their campaigns, allowing them to target specific audiences and keywords and measure performances accurately. Clear naming conventions, logical ad groupings and effective use of ad extensions and targeting options are all recommended.

SEM targeting types

There are a range of approaches to targeting in paid advertising that can be applied, including:

Keyword: Bidding on relevant keywords as searched by your target audiences.

Location: Targeting users in specific geographic locations, such as cities, regions or countries.

Device: Targeting users by device, e.g. desktop, tablet, mobile.

Demographic: Data such as age, gender, income level is used to target users.

Remarketing: Targeting users who’ve had previous interactions with the business or website, such as those who abandon a shopping cart.

 Major benefits of search engine marketing (SEM)

Immediate brand awareness and instant revenue generation are two of the big benefits of SEM. Other key benefits include:

  • Targeted traffic

SEM enables businesses to ensure their ad spend is focused on the most relevant prospects.

  • Measurable results

Detailed metrics on ad performance, such as click through and conversion rates, allow businesses to measure and optimise the return on investment of their campaigns.

  • Flexibility

Campaigns can be easily adjusted and optimised in real-time based on performance data, empowering people to respond quickly to changes in the market or customer behaviour.

  • Competitive advantage

Businesses can gain an edge over competitors who are not utilising SEM by bidding on keywords and targeting specific audiences.

  • Brand building

Increasing visibility of a brand in search results is a solid benefit and will reinforce association of a brand with specific keywords and phrases.

Best SEM tools

While there are many SEM tools on the market, we’ve rounded up the following options for you to get started with:

 Google Ads Editor: A free tool to manage Google Ads campaigns offline, making it easier to make bulk changes.

 Bing Ads: Platform for managing and running search ads on the Bing search engine, with similar features to Google Ads.

 SEMrush: Suite of tools for keyword research, competitor analysis and tracking SEM campaigns across multiple search engines.

 Google Trends: Tool for tracking the popularity of search terms over time, helping to identify seasonal trends and target trending topics.

 Google Ads Keyword Planner: Another tool from Google, free to use to discover new keywords and estimate search volume and competition for existing ones.

How to get into digital marketing

At Academy Xi, we offer flexible study options in Digital Marketing and Social Media Marketing that will suit your lifestyle and training needs, offering you the perfect foundation for your future as a digital marketer.

Whether you’re looking to upskill or entirely transform your career path, we have industry designed training to provide you with the practical skills and experience needed.

After a career change? Take a look at our Transform course: 

Planning to upskill? Our Elevate courses are perfect for you:

If you have any questions, our experienced team is here to discuss your training options. Speak to a course advisor and take the first steps in your digital marketing journey.