WHAT’S THE DIFFERENCE BETWEEN SEO AND SEM?
SEO VS. SEM. OMG! WTF?
If you hit your limit on abbreviations with HTML, then you probably find digital marketing somewhat confusing. The digital marketing world is chock full of wannabe acronyms like SEO, SEM, PPC, CTR, CPM, etc. (No, “etc” is not one of them, at least not yet). Fortunately, your friendly neighborhood blog is here to help you understand these things. Isn’t that nice of us?
OK, SO WHAT’S SEO?
SEO stands for “Search Engine Optimization.” It usually refers to the effort whereby you make your website easier for search engines to find.
Of course, simply being found is not the real struggle here. We all know that only the most desperate search engine users could give a hot potato about what turns up on page 4 of their search. Like cream in your coffee, the good stuff always floats to the top. That’s where you want your site to be.
But how does a search engine know who to put first? The answer is really complicated, but it boils down to two different ways.
The first way is relevance. Websites that have the greatest relevance to the search term rank highest. Building your website with SEO tactics can help you rank higher. There are an abundance of tactics to increase your site’s relevance to a term, but the basic idea is to include keywords in your content, abundantly. For example, if you want your site to rank in a search for “dumpster cozies,” you should make it a point to reference “dumpster cozies” multiple times in your content. Of course, if your site actually sells sausage logs, you’ll probably find that spamming the keyword doesn’t work because it’s not relevant to your site.
In other words, don’t mess with Google. https://www.google.com They know more about you than the government or even Santa Claus does.
Now as important as search engine optimization is, SEO is just a teeny tiny portion of the world of search engine marketing.
SEM, A.K.A. PPC, LOL
Digital marketing can include a lot of things, but the biggest part of it by far is SEM, or search engine marketing. As the name implies, search engine marketing is the practice of using search engines like Google, Bing, Yahoo, or any others that might exist (hint: if you have to use a search engine to find a search engine, it’s probably not worth it) to market your brand.
Search engine marketing (why am I not using the abbreviation SEM? Because SEO) is a big deal. A huge deal. A ginormous deal. To put it in perspective, a company like Amazon spent over $450 million in SEM alone in 2017. All told, American businesses drop about $40 billion on SEM per year. Globally, that number more than doubles to over $90 billion.
So, as stated earlier, it’s a pretty big deal.
But what’s really amazing is that almost all of that money is spent a few pennies at a time, buying clicks.
THE 411 on PPC
Generally, whenever anyone mentions search engine marketing, they are really talking about pay-per-click, or PPC. PPC, or “paid search” advertising is a big deal for advertisers because it lets them place ads directly in search results.
You’ve seen these ads. They usually appear above the rest of the search engine results you get. Each time you click on one, the advertiser who placed it spends a little bit of cash. How much they spend depends upon how popular the search term that brought it up is.
For example, if you search for “insurance” you’ll find a lot of companies listed. However, it is the ones on the top (and bottom) that are actually ads. You can tell by the nearly invisible “Ad” box shown next to the URL for the listing. Because “insurance” is a valuable search term, the advertisers you see listed have to bid on it. And because it happens to be the most valuable, they have to pay a lot. Go ahead and click on it, I’ll wait.
There. You just spent about $50 (or more!) of that advertiser’s money. Doesn’t it feel good? Go ahead and click on some others. Make it rain. Don’t worry, you’re not making anyone go bankrupt.
You see, pay-per-click advertising allows advertisers to set both a maximum bid per click and a total budget per keyword, so they don’t have to worry about overspending, even when they’re dropping half a c-note on your rebellious impulse clicking. And that’s just on Google. There are other search engines also, but Google is far and away the 500-pound gorilla of PPC advertising, owning about 80% of the SEM market.
In truth, the majority of keywords cost less than a dollar per click. So don’t get freaked out. But you should understand that what you’re buying is just a click, not a lead.
CPL, CPC, and CTR, oh my!
Generally, when someone clicks on your paid search ad, they are sent to a landing page where you try to convert them into an actual lead (i.e., by collecting their email address). It could instead send them to a page on your e-commerce site where you might try converting them to a sale. Either way, all you’re paying for with your PPC ad is the click. So, your cost per click (CPC) and click-through rate (CTR) are both important.
Basically, your click-through rate helps you evaluate the effectiveness of your paid search ad, and your cost per click allow you to estimate your PPC budget. But it’s still just clicks. If you want to get real, you have to look at your CPL, or “cost per lead.”
Once someone clicks your PPC ad and then converts on your landing page or e-commerce site, you have a digital marketing success story. But, like most success, it comes at a price. Understanding that price is the key to successful SEM, and you want successful SEM, don’t you?
Let’s say your cost per click (CPC) is one dollar and you set a budget of $20 for your ad campaign. That means that you can afford up to 20 leads in your paid search campaign. You run your campaign and you find only one out of every 100 people who sees your PPC ad bothers to click on it. By the way, every time the search engine displays your ad is counted as an “impression” (are you impressed?). So your click-through rate is 10% (clicks divided by impressions), which is actually pretty good. You want a high CTR because to a search engine, that means your ad is relevant, and relevance always ranks higher.
However, even with a robust CTR, perhaps you find yourself still struggling to convert those clicks into leads. Only one out of every 10 people who click are filling out the form on your landing page. This is a problem because you’ve already paid for them by the time they there. Your CPL, or cost per lead, is now $10. Might be time to try a new landing page.
Never Stop Perfecting
The good news is that you can. Digital marketing is awesome because you can continuously revise and refine it. If your paid search ad doesn’t perform, you can revise it. You can try different keywords or keyword combinations (note that “dumpster cozy” is not the same as “cozy dumpster”), and adjust your budget on the fly. If your cost per conversion (or CPL, because leads are the same as conversions) is too high, you can try less expensive keywords, or try improving your landing page so it converts better.
All of these metrics are here to help you become a better marketer. They help you weed out what doesn’t work and hone in on what does. In fact, learning to read the numbers is really less about marketing than it is about data science. However, that doesn’t mean that creative doesn’t have a role. How your ad reads, and how your landing page looks are still crucial to keeping your CPL low and your ROI high. The trick is in finding a DAMN GOOD agency capable of managing it all.