Introduction to Search Engine Marketing and Search Engine Optimization

Increasingly small business owners are wanting to get better results from their website. And they are being encouraged to spend money on Search Engine Marketing (SEM) and/or Search Engine optimization (SEO).

If you’ve found it hard to get your head around SEM or SEO, don’t worry, most people do. It can be complicated. While you don’t need to understand the detail, a business owner needs to understand the fundamentals to make good business decisions.

The volume of searches carried out on the internet represents a big opportunity to small business in particular. When searchers find a link they are after, they may click on it. Search brings visitors to your site that are interested in your products and services – you have gained some valuable attention. What you do with that attention once they arrive at your site is another matter.

Search Engine Marketing

Search Engine Marketing (SEM) is all about marketing to searchers. Figure out what they want, and get your message in front of them at the right time.

If you are familiar with Google and other search engines, you’ll probably know about the organic search results (down the left-hand side of the page), and the sponsored links (down the right-hand side, or sometimes in the ‘sponsored links’ section across the top of the page).

SEM is all about getting your business to appear on either the left-hand side (organic search) or right-hand side (paid search) of a search engine results page, when a searcher is looking for a keyword relevant to you.

Paid Search / Pay-Per-Click

You can create a short advertisement and pay for it to be displayed when people search on a defined keyword.

The two major paid search programs are:

  • Google AdWords
  • Yahoo! Overture

With a Pay-Per-Click (PPC) campaign, it doesn’t cost anything for your ad to be displayed, only when a searcher clicks on your ad. The amount you pay for the click varies according to the popularity of the keyword. The price is set by the people bidding on a particular keyword (and the amount they set for their bids) and the relevance of the ads.

If you are running a PPC campaign, you should understand a few basics:

  • what is your Lifetime Customer Value (LCV, in other words, how much is each new customer worth to you in terms of net profit)
  • what is your Cost Per Acquisition (CPA, how much does it cost you to acquire a new customer?)

Would you give someone $50 to get $1,000 in return? What about handing over $1,000 to get $50 in return? These are easy questions to answer. And if you get the right information together about your AdWords or Overture campaigns, you can make decisions about them just as easily.

Let’s look at how those two questions appear for different businesses in the context of an AdWords PPC campaign

  • Business A: Each new customer is worth $1,000 in profit (that is an LCV of $1,000). You’ve been running an AdWords PPC campaign – it costs you $1 per click, and on average for every 50 paid clicks you get 1 new customer. You are spending $50 to earn $1,000. This is a great marketing campaign – keep it going (and find ways to expand it).
  • Business B: Each new customer is worth $50 in profit (LCV = $50). And you run a PPC campaign where the cost per click is $0.20, and for every 5,000 clicks you get a new customer. Here you are spending $1,000 to earn $50. This is a lousy marketing campaign. Shut it down as soon as the metrics make it clear what is going on.

Are my keywords too expensive?

Is $10 per click expensive? Is $0.20 per click cheap? Without knowing your LCV and CPA, it is impossible to answer. A $10 per click keyword could represent a brilliant marketing opportunity for you. It all depends on your LCV and conversion rate.

Organic Search / Search Engine Optimization

If you have content on a particular topic, if someone is searching on that topic they may find your content in the organic (left hand side) search engine results.

Having your links appear in the organic search engine result pages (SERPs) is not always easy.

Search Engine Optimization (SEO) is the process of optimizing your site for organic search results.

Understanding SEO can take some time. Particularly as the search engines don’t tell everyone exactly how they do their work. However, there are published guidelines, as well as practices that have been deduced (and are generally accepted by search engine specialists). We have prepared two introductory articles to help you understand enough about SEO to make business decisions that relate to it, as well as take an active role in getting good organic search engine results: