The Ultimate Guide to Search Engine Marketing for Your Small Business Skip to content

The Ultimate Guide to Search Engine Marketing for Your Business

If you’ve been honing your digital marketing strategy, you’ve likely already put some time, thought and energy into your SEO program. But there’s another acronym you’ll want to learn: SEM, or search engine marketing.

Before we dig into what search engine marketing is, it’s worth acknowledging that there’s some debate around the term itself. Some people use SEM to refer to all marketing strategies that leverage search engines (including SEO as a subset as SEM) while others use SEM to talk specifically about paid advertising through search engines. Sometimes, this gets called “paid search” or “pay-per-click” (PPC).

Confused yet? 🤯

In this guide, we’re going to keep it simple and follow the lead of the experts over at SEMRush. Here’s their definition:

  • “SEO — An approach that uses organic methods to appear in search results.”
  • “SEM — An approach that uses paid methods to appear in search results.”

For us, SEM refers to paying to generate traffic through search engines. In this guide, we’ll answer the question: What is SEM and why does it matter in digital marketing? Stick with us and we’ll show you how it works, and why you’ll want to build an SEM strategy into your marketing plan.

What is SEM?

Search engines work by indexing websites. When a user goes to Google and types in a search term—say “lawyers in Toronto”—Google will then use its algorithm to show the user the websites that best match what they’re looking for. The better your website, and the more closely Google thinks you match what the user is looking for, the higher you’ll rank in those results.

Well, in theory.

Because look at what happens when we actually search for lawyers in Toronto.

Google Search Screenshot - Toronto Lawyers
Image: Google search results

The first four results that appear are all ads. In fact, I need to scroll below the google map in order to find the first organic search results.

You may also notice ads when you’re searching for products:

Google SERP - Laptops
Image: Google search results

As search engines have increasingly sought to monetize their search results, search engine marketing has increasingly become pay to play. While good SEO practices do still matter and ranking highly is valuable, SEM is another way to reach highly targeted potential clients and customers, and to bring them to your website.

SEM vs. PPC vs. Paid Search

As we mentioned earlier, there are many terms floating around when it comes to SEM. Two you will likely hear are paid search and pay-per-click, or PPC.

Paid search is basically synonymous with SEM: it refers to marketing strategies using paid placements on search engines.

Pay-per-click (PPC) refers to the most common revenue model used by search engines for ads. When you run an ad campaign on Google or Bing or Apple Search, you are charged based on how many times users click on that ad. However, PPC isn’t the same as SEM, as PPC ads exist across a variety of platforms.

SEM vs. Social Media Marketing

SEM isn’t the only game in town when it comes to online advertising. There’s also social media marketing (sometimes called paid social). Social media marketing also typically depends on PPC ads except instead of showing up on search results, your ads will display on people’s Facebook, Instagram, or LinkedIn page etc.

Both types of marketing campaigns have value and are used for slightly different goals.

With SEM, you’re primarily targeting people based on what they’re searching for. This means they’re likely already considering a purchase or even ready to buy.

With social media marketing, you’re primarily targeting people based on demographic data and how they behave online. This means you’re able to get your product or service in front of people who may not be actively searching but may be open to your offer. Social media marketing also tends to benefit from the inherently visual nature of the medium, and can be shared and engaged with in the same way other content is on social media platforms.

While there are similarities between the two, they are really distinct parts of your overall marketing strategy and used for different purposes.

How does Search Engine Marketing Work?

Because Google controls almost 90% of the search engine market, we’re going to focus on Google Ads in this guide. However, the principles are broadly similar when working with other search engines.

Sparked - SEM Process
Image: SEM process

Research Keywords

As with SEO, keywords are the foundation of your SEM ad strategy. To recap, keywords are the search terms a user enters into Google (or their search engine of choice) when they are looking for information.

In order to make your ad effective, you’ll want to understand the keywords your customers are using when they’re looking for products and services like yours.

Understanding keywords is a major topic all on its own, but here are some tips to help you get started:

Make a list of the major areas of your business. For each area, brainstorm a list of services or products you offer and/or questions customers might ask about this service. This is a good way to start defining the scope of your keyword research.

Study related search terms. When you’re exploring keywords, look out for a box that says “people also ask” and the related searches at the bottom of the results page. For example, when we enter the term “digital marketing agency” the following shows up just after the top results:

Google SERP - People Also Ask
Image: Google search results
Google SERP - Related Searches
Image: Google search results

This is a quick and easy way to identify the types of searches users are making in your field.

Explore keyword search tools. There are many tools out there that can help you identify common search terms. Some, like Google Trends or Answer the Public, are free. Others, such as Ahrefs or Growth Bar, are paid services that offer advanced services to help you refine your research.

Once you’ve identified the keywords you will be using, it’s time to craft your ad.

Target ads

Based on your keyword research and your target audience, you’ll want to craft an ad that has the best chance of enticing the customers you want to click through (and ultimately convert). This is where working with a copywriter who specializes in paid search may be useful.

But when we talk about “targeting ads” we’re not only talking about the details of the ad itself (text, visuals, CTA, etc). We’re also talking about the settings you’ll apply when you’re setting up your ad.

Google Ads Goals
Image: Google Ads

When you log onto Google Ads (or other similar platforms) there are prompts to guide you through this targeting process. Google also offers a broader range of options for targeting for marketing professionals.

Google Ads - Setup
Image: Google Ads

Google has two main ways to target your ads: by audience or by content.

Audience includes factors such as age, location, gender, and device type. You can also match your ad to customers who have been looking for a product or service like yours, or use remarketing to target customers who have already interacted with your website or ads in the past.

Content allows you to target your ad to specific keywords or topics.

You can target your ad by both audience and content. In the expert marketer mode, you can get very granular with your targeting, e.g. targeting parents or people with a degree or homeowners, etc.

Track results

As with any investment, you’ll want to know what you’re getting for your money when you enact an SEM campaign.

Depending on your goals, there will be different ways to track how well your ads are performing for example visits to your website or downloads of your app. Google Analytics is a powerful tool for measuring many of your marketing efforts, including your SEM campaigns.

The great thing about digging into your results is that you can continue to refine and improve your ads. Imagine you’re running two slightly different ads: you can easily track which is performing better (or if one is attracting one segment of your market more strongly than the other). You can also gather data about your customers to help you refine your targeting.

This process allows you to continually improve your ads based on data so that you can reach your goals and grow your business.

How much does Search Engine Marketing cost?

In traditional advertising, you pay to place an ad in a magazine or on a TV station at a fixed price. The price is set by variables such as the size/length of your ad, the prestige/reach of the medium, etc. But while you may have some metrics about well-performing spots beforehand (everyone knows the Superbowl ads are prime marketing real estate!), you will pay the same price for your ad whether the ad converts or not.

With search engine marketing, things work differently. As we noted above, search engines run their ads on a pay-per-click (PPC) model. This means you only pay when a user clicks on your ad.

Here’s how it works:

When you set up your ad, you are essentially bidding on advertising space with Google.

Google Ads - Budget
Image: Google Ads

When you set up your ad, you’ll be prompted to set your budget and then make your bid based on your goals. If your goal is to get people to your website, you might choose clicks. You can choose to set a maximum bid for how much you want to pay for each click (cost-per-click, or CPC)

Based on what you enter, Google will then determine your ad rank based on the following:

Ad Rank = CPC Bid X Quality Score

(Your quality score is a value judgment Google makes based on data including your clickthrough rate, web page quality, ad quality, etc).

This formula will also determine your actual CPC.

Here are a few things to understand when you’re looking at the cost of SEM:

  • You can always set your budget in SEM–which is great if you want to get your feet wet and see how things work
  • A bigger budget doesn’t necessarily mean better results–quality matters too, and higher quality means a lower CPC. If your budget is low, you’ll want to make sure you’re maximizing that quality score as much as possible.
  • The cost and effectiveness of your ad will partially depend on the popularity of your targeted keywords, and how much your competitors are spending.
    For example, if you’re targeting a heavily saturated keyword where there are big players dropping 10x your max bid, you’re likely going to have a harder time getting to rank your ad highly and will likely have a higher CPC.

According to estimates, average CPC is between $1-2. Small to midsize companies typically spend $9-10,000 per month on ads. However, as we’ve already noted, these figures can vary widely based on strategy, industry, and goals.

Even after reading this section, it may still not be clear to you how to budget for SEM marketing. And hey, we get it. This is dense stuff, with lots of acronyms, formulas, and variables. It can get confusing.

It’s why having an SEM expert on your side can be such a smart investment: they’ll be able to walk you through strategic choices for your business, suggest ways to optimize your ad spend, and, of course, help you create ads that get results.

However, if you want to try things out on your own, we recommend starting small, and getting really familiar with your analytics so you can track what’s working, what’s not, and continually refine before you drop large amounts of money.

What is the importance of SEM?

SEM is an important part of your marketing toolkit. When used well, it can boost brand awareness, drive conversions, and deliver impressive ROI.

On average, businesses generate $2 of income for every dollar spent on Google Ads… and some businesses will get even better returns than that. 🤑

But beyond straight up ROI, there’s plenty of good business reasons to invest in SEM.

Benefits of SEM

  • Fast results: While SEO is a great medium to long-term strategy, if you need results fast (to launch a new product or service, for example) SEM is a great way to jump the line and start showing up on search pages now.
  • Make real-time adjustments: Unlike with traditional advertising, your ads aren’t set in stone. You can tweak and adjust every aspect of your ad based on real-time data. You can also easily run multiple ads to A/B test your messaging.
  • Generate qualified leads: Because of the highly targeted nature of SEM, you’re more likely to generate high-quality leads who are actually interested in your business when you run search engine ads.
  • Target locally: SEM allows you to target your ads based on your business location. Like placing an ad in the local newspaper or putting up a billboard, you can use SEM to get in front of the customers nearest to you—with the added benefit that you’ll also be able to target based on keywords.
  • A more level playing field: Unlike traditional advertising, when the brands with the most dollars will always secure that Superbowl slot, SEM offers a chance for those on smaller budgets to do well. As we noted earlier, quality matters, and you can adopt strategies (for example, targeting long-tail keywords) that can give you an edge, even against the giants in your field.
  • Control your budget: Google’s bidding system allows you to be careful with your budget and see exactly what you’re spending on—and the results you’re generating for your money.
  • Gather great data: Running ads allows you to gather valuable market data. If you’re launching a new product or service, or marketing messaging you can gauge interest quickly by running an ad campaign.

How do SEO and SEM work together?

A common question is “Will my paid search advertising impact my search ranking?” The answer is no— your search ranking is still dependent on the factors we outlined in our SEO guide. However, having good SEO practices can impact your ad rank. Remember that equation that Google uses to determine your ad rank? Alongside your bid, Google also assigns you a quality score based on the strength of your ad and the user experience of your ad landing page (which will depend on implementing SEO best practices).

In general, however, SEO and SEM are two separate (albeit related) marketing streams, to be used in different ways.

SEO is a long term strategy to build your brand visibility, customer trust and your credibility. While it takes time to rank highly, investing in the effort gives you a large competitive advantage: competitors can’t quickly outspend you to usurp you in the rankings. Organic rankings also tend to have an overall better clickthrough rate (based on the authority that Google gives highly ranked sites).

SEM lets you get to the top of a search results page fast. And because you’re crafting an ad, you can work with your copywriters to make that ad as clickable as possible. Your SEM strategy can be highly-targeted and you can multiple ads at the same time to A/B test messaging.

So, which should you use? SEO or SEM?

The answer is that there’s no one-size fits all solution. Where you should focus your efforts depends on variables such as your industry, how competitive your market is, your budget, and your goals.

Ideally, you’d be able to invest in both SEO and SEM, because they can actually work well together. Here’s why:

  • Using both strategies together boosts your search engine presence and gives you more chances to win all-important clicks.
  • Even if you rank #1 for your targeted keywords, paid ads are important. A 2012 study found that when ads were paused on top ranked keywords, 50% of the clicks the ads would have generated weren’t picked up by the organic result.
  • SEM allows you to remarket by targeting ads at people who have already interacted with your business in some way—which means you can focus on moving people through your funnel.
  • Using both SEO and SEM allows you to double up on data. As you collect data from your paid search (e.g. high converting keywords, messaging that worked well in A/B tests) you can refine your SEO strategy based on real results, not guesswork.

SEM Checklist

Whether you’re just getting started with SEM or you’ve been running ads for a while, it’s important to take stock and make sure you have everything in place to ensure success.

✔ Determine your advertising goals: what do you want your campaign to achieve?
✔ Target your keywords. And, if you’ve been running ads for a while, double check any new keywords you may want to test, and check how well your current keywords are converting.
✔ Identify the customers you want to target.
✔ Craft your ads. Consider running multiple messages in order to A/B test and refine as you go.
✔ Make sure your ad landing page follows SEO best practices.
✔ Dig into your analytics and continually update your strategy and messaging based on real time results.

How to choose the right SEM agency

Getting started with SEM can be simple enough. It’s easy to test out small campaigns with a limited budget to get a feel for how they work. However, at some point you may find you want to engage experts to take your SEM to the next level.

Here’s some things to look out for when choosing an SEM agency:

  • Are they interested in your business and goals?
  • Do they have a defined process that you feel confident will meet your goals?
  • Does the team you’re working with have the right mix of expertise?
  • Are they willing to share results and testimonials from other clients?
  • Do they communicate clearly and answer your questions?

And make sure you steer clear of agencies who raise red flags. Some signs to be wary of include:

🚩 They use a cookie cutter process that has nothing to do with your business or desired goals
🚩 They’re secretive about their process
🚩 Their budgeting is unclear: you’re not sure how much of your ad spend will be going directly into search engine bids and how much is the agency’s cut.
🚩 They stick rigidly to strategies that aren’t working
🚩 They’re vague about results or claim that conversions don’t matter
🚩 They have limited staff and are cagey about their expertise


SEM can be a great investment for your business. But your dollars can go even further when you have an experienced partner at your side.

At Sparked, we work with our clients to understand your business—and we can guarantee you’ll always have an expert working on your projects. If you’re interested in chatting about how SEM could work for your business contact us and one of our friendly team members will be in touch soon.

What digital problems are you facing?

Let's start a conversation.