Who needs another pair of three letter acronyms to make marketing technology even more opaque? By now even the most technophobic marketers have heard these two – SEO and SEM, but may not really know the difference or why they should care. The “SE” part is actually the same for both and stands for “Search Engine”. The more widely recognized of the two acronyms, SEO, stands for “Search Engine Optimization” and refers to the art and science of getting your web site to show up near the top of the organic or natural listings on the major search engines – think: Google, Google, Google, Bing and Yahoo (see US traffic share below).
SEM, which stands for “Search Engine Marketing”, should really be SEA for Search Engine Advertising, because it refers to those pay-per-click advertisements that we see on the top and right side margins of search engine results. Not surprisingly, those ad results in the “margins” are the most prominent, since they drive the bulk of search engine company revenue. For Google in 2013 that was $37B in sales from Adwords and other Google site advertising. Google also sold $13B of advertising through its ad network, another effective advertising tool that I’ll discuss in a future newsletter.
So which is better? Well, like most answers to marketing technology questions – it depends. Organic search results are free, but good organic search results are hard to come by and require both expertise and lots of hard work, neither of which is free. Each search engine has its own proprietary algorithm that determines the ranking of organic listings for a given set of search terms. Although these algorithms are being updated all the time, factors that generally improve rankings include:
- Placement and frequency of search terms on the web site
- Back links from other highly trafficked, authoritative sites (e.g. www.wsj.com)
- Freshness of relevant site content
- Richness of relevant site content – tagged videos and photos weigh more heavily
The investment in SEO required to achieve first page positioning on search engines will vary tremendously depending on how much others are investing to achieve top results. A podiatrist in a rural town could easily rank first on a search for “podiatrists” in that local area, where there may only be one or two others. Whereas, a jewelry store in New York City might be competing for search terms like “engagement rings” against hundreds of others in the same area including well-known local stores and online national retailers which could be investing tens of thousands per month in SEO.
SEM might be a better bet for that New York City jewelry story, even if it has to pay for every click on its search engine advertisements. In most cases however, a combination of the two strategies will be the most cost effective. Fortunately both approaches enable extensive analytics to help companies find that ideal mix of SEO and SEM for each set of key words. Since an SEO campaign will take some time to become effective, it often makes sense to pay for search engine ads at least until your SEO investment starts paying off (see chart).
If you are considering investing in SEO or SEM but don’t really know where to start, or if you are not sure that your current plan is optimized, please contact me so I can connect you with some very talented teams with expertise in both areas.
