How Search Engine Marketing (SEM) Works (Plus Differences)

By Indeed Editorial Team

Published 7 September 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Online marketing is a valuable part of a company's marketing plan to help reach new customers. Search engine marketing (SEM) usually forms part of a standard marketing strategy and can help attract new customers, raise brand awareness and promote specific products or services. If your role includes marketing, creating a specific strategy for marketing using search engines can be effective. In this article, we outline what SEM is, describe how it works, explain how it differs from search engine optimisation (SEO) and pay per click (PPC) and list components of this marketing strategy.

What is SEM?

SEM stands for search engine marketing, which relates to using paid advertising to help boost a website's ranking in search engine result pages (SERPs). Ranking your site higher helps to increase its visibility with potential customers. It also forms part of an overall SEO strategy. While there's overlap with SEO, search engine marketing focuses on paid advertising. Developing the right approach for this marketing type is key to complementing existing online activities and ensuring that you're targeting the keywords that target customers are searching for online. Some benefits include:

  • Reaching the target audience: It helps ensure prospective customers see your content in their search results, so you can reach them more effectively and drive traffic to the site.

  • Generating revenue: If your advertising is effective, you may drive conversion immediately, helping to boost revenue.

  • Building brand awareness: Having your advertising on top of the search results helps to drive brand awareness of the offered products and services.

  • Growing a sustainable business: You can quickly scale advertising up or down, depending on the needs of the business to drive more customers or, if it's necessary, switch off the ads if you can't meet the demand for the products or services.

  • Creating targeted campaigns: When using specific keywords for an ad campaign, you can determine the interest of prospective customers by the level of their engagement.

  • Providing low-cost marketing: Depending on the strategy, it can offer a low-cost alternative to other advertising and brand awareness tactics.

  • Getting a competitive advantage: Paid ads appear above SEO organic ads, so an ad appears higher than competitors not using this marketing strategy.

Related: What Is Digital Marketing? (FAQ Plus Types of Strategies)

How SEM works

Search engine marketing displays paid ads at the top of SERPs that trigger when a consumer enters keywords into a search engine. These ads only show when consumers search for keywords that are set for the ad. This approach helps ensure the results are relevant, encouraging a consumer to make a purchase or discover more about a brand.

You can manage these ads by using a search engine marketing site to set up an account with keywords. Typically, users can also participate in ad auctions to ensure the ads generate search results. If you win a bid for a specific keyword, then the ad displays as the first one on the SERP. Depending on the demand for the keyword, the price can fluctuate.

Related: 12 SEO Careers to Consider (With Salary Information)

Differences with SEO

SEO relates to increasing a website's rankings in organic search results, which are the results that sit directly underneath paid advertising in a SERP. In contrast, SEM is a form of paid advertising that sits above the SEO results. Higher rankings can help you get more traffic to the site and increase your return on investment (ROI). SEO tactics constantly change as search engines change their algorithms. They typically comprise activities such as incorporating keywords into webpage copy, meta descriptions, title tags and heading tags.

SEO can also mean formatting page URLs and optimising the page load speed. Another key element includes off-page SEO, which refers to driving traffic to the site from other high-quality sites, sharing via social media and social bookmarking. The two advertising methods can work together as part of a marketing strategy to increase brand visibility and drive traffic to the site.


  • Digital Strategies: Definitions, Uses, Tips and FAQ

  • What Do Marketers Do? (With Common Duties and Job Titles)

Differences with PPC

Although SEM is also sometimes called paid advertising, PPC or paid search advertising, the methods are slightly different in their approach. An SEM strategy is broader, incorporating paid search while using SEO tactics. For example, you can set up a PPC ad without optimising the ad or the website it links to using keywords.

Optimisation using SEM can help to create more effective PPC ads. When you employ this strategy to set up a PPC ad, you're optimising both the ad and the content with specific and relevant keywords that relate to the brand and aim to drive conversion.

Related: Credentials to Include on an SEO Resume (With a Template)

Understanding keyword research

Keyword research is an important step in your strategy, as understanding which keywords to incorporate can help you target the right consumers for the products or services you offer. Keywords are the phrases or words potential consumers use in search engines when searching for products, services or information online. Matching those keywords to an ad can help ensure it sits at the top of the SERP, making it easily visible and encouraging click-throughs to the site.

It's important to research keywords carefully and consider both positive and negative alignment with the ads. Positive alignment relates to words specifically related to the products or services. For example, if you're selling beauty products, then you may wish to use keywords like best anti-aging moisturiser or vegan face mask. Negative alignment refers to associated keywords, such as tips for acne or best skin care techniques for men, that can help rank the ads higher. Try to use keywords that are specific to the products on offer.

Related: Steps for Teaching Online Research Skills (With Examples)

Account structure components

Creating an account is necessary for managing your search engine marketing ads via a search engine. While account structures can differ between search engines, most have a reasonably similar structure that includes:


This section stores all the components relating to your SEM account. Typically, businesses have a single account set up to run multiple campaigns. You may have various users accessing the account, each managing a different campaign.


This section allows you to select the type of ad campaign you wish to run. There are typically various options, including a search campaign, display campaign and call-only campaign. In addition, you can set up each campaign with a different business goal, which means you can run several campaigns simultaneously.

Related: Marketing Campaign Management: Definition, Types and Value

Ad groups

Ad groups structure each campaign, where you can organise keywords. You can also set up your groups using a general theme or connecting idea. Depending on the organisation's needs, you may have six to ten ad groups for each campaign.


Keywords are the words potential consumers use to search for products or services that display an ad in the SERP. It's important to spend some time researching keywords to determine which ones are likely to offer the highest yield for the product or service. Typically, it's good to use about 20 keywords for each ad group.


Ads are the content that populates on the SERP when a consumer triggers it. As part of your strategy, you can run tests using various ads to identify which ones get the best response. Given these ads cost money to display on the SERP, it's important that they're effective to impact your ROI positively. Ideally, aim to use two or three ads for each group.

Related: A/B Testing Examples (Including Definition and Benefits)

Understanding ad auctions

An ad auction allows an organisation to bid on keywords so its SEM ads appear at the top of the SERP. It works by providing the search engine with a maximum amount it's willing to pay for each keyword, along with the content for the ad and the landing page associated with the campaign. The search engine looks at this information compared to other organisations' bidding details. Then, the search engine considers the highest bid, best quality ad and landing page. The ad expected to have the highest impact typically wins the bid.

Auctions occur instantaneously each time a consumer runs a search. An organisation's success in the auction can impact its quality score. This score can affect how much the organisation pays each time they place these types of ads.

Understanding quality scores

A quality score is the search engine's rating of an organisation and can determine the price an organisation pays for each of its SEM ads. If an organisation has a high-quality score, it pays less than competitors with low-quality scores. The quality score assesses various factors, including:

  • Keyword value: This determines whether the keywords you choose for an ad are effective or not, based on the volume of click-throughs to the website.

  • Click-through rate: This measures the number of times a consumer clicks on an ad and visits the website.

  • Landing page quality: Creating a landing page of high quality that's relevant to users can encourage them to return.

  • Ad copy: The content of an ad relates directly to the search query.

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