What’s the difference between SEO, SEM, PPC & Google Ads?

SEO, SEM, and PPC are industry terms that often get confused. It is important to understand the differences.

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Online marketers and business people are constantly talking about SEM, PPC, SEO, and Google Ads – but they still get confused.

SEO image.

Best practices evolve, industry terms change, and new acronyms are often created. This can lead to issues in selecting the ‘best-next-steps in online marketing’ for a company.

Here is a summary that helps put everything into perspective.

Difference between SEO, SEM, PPC, And Adwords

If you’re a digital marketer for a company, yourself, or multiple clients, the distinction between SEM, SEO, and PPC needs to be clearly understood.

SEO (Search Engine Optimization)

Search Engine Optimization (SEO) is perhaps the foundation of digital marketing. We are all stunned by the rapid growth of the industry. To make sure the website meets the best SEO practices, having a team of experts on board is wise. SEO agencies such as SH1FT will help your company extend its reach online and create brand authority.

Strong SEO efforts will organically put the website of a business close to the top of the search engine results pages ( SERPs).

Ultimately, you want your website to be classified first on the SERPs, which means that answering the search queries of Internet users for a given word (i.e. “pizza place NYC”) is the best choice. The following infographic below shows factors that influence the success of SEO.

Hierarchy of SEO Needs done by Moz.

SEO pioneers will admit to SEO not being what it used to be. As search engines like Google have become “smarter,” many of the strategies that people referred to five years ago are useless. Make sure to do your homework and give up strategies that won’t work anymore in 2020.

For more on SEO, check out this blog post.

SEM (Search Engine Marketing)

SEM (Search Engine Marketing) is a broad concept which explains the method of enhancing the visibility of a website on search engine results pages (SERPs). It has historically been a blanket term meaning any form of internet marketing that enhances the popularity of a website’s search engine. Search Engine Land discusses how in the early 2000s, SEM, was defined as a method that includes “SEO, paid placement, contextual advertising, digital asset optimization, and paid inclusion.”

The term SEM has become associated, over time, only with paid search methods. Around 2006 SEM began to become the standard term for paid search. The most commonly accepted definition of SEM is, “the process of increasing traffic to your website by purchasing ads on search engines.”

You’ll still see blogs use its original meaning, though. To prevent ambiguity, pay attention to the context of the term’s use.

PPC (Pay Per Click)

The PPC (Pay Per Click) model is when the advertiser pays whenever someone clicks an ad that takes that person to their website. The advertiser pays the host of the platform that facilitates the ad placement.

The most common advertisement hosts are Google, Yahoo, Bing, LinkedIn, Facebook, Instagram, and Twitter. These are the advertisements that you see at the top and right of the search results. To purchase a PPC ad placement, you must win the bid for that ad spot. PPC ads that use Google, Bing, or other search engines fall under the paid SEM category.

PPC example on Google.

Most advertising platforms, including Google Ads, work with real-time bids. You must understand the auction process of the advertisement platform you select. For example, if you’re using Google Ads, you’ll need to know that Ad Rank determines your ad position.

Google states:

Ad Rank is calculated using your bid amount, your auction-time ad quality (including expected clickthrough rate, ad relevance, and landing page experience), the Ad Rank thresholds, the competitiveness of an auction, the context of the person’s search (for example, the person’s location, device, time of the search, the nature of the search terms, the other ads and search results that show on the page, and other user signals and attributes), and the expected impact of extensions and other ad formats.

Google Ad Rank is just one instance of how the ad position is determined by an advertising platform. In the next section, we’ll talk more about PPC ads and Google Ads.

PPC Terms

Here are a few key terms to know that are easy to confuse:

  • Cost Per Click (CPC): CPC pricing varies depending on the competitiveness of the industry. It can range from a few cents to up to $50 or more.
  • Cost Per Conversion: This is how much you spend overall to make a conversion (typically your first sale). For example, if your CPC is $1, and ten people click your ad before your first sale. Then your Cost Per Conversion is $10 ($1 per ad click x 10 people clicking).
  • Cost Per Mille/Thousand Views (CPM): CPM is a bidding strategy where your main concern is views, or impressions, instead of clicks. This is best when your main objective is brand awareness.
  • Cost Per Acquisition (CPA): CPA is a financial metric that shows the revenue impact of a PPC campaign, calculated by dividing the total dollar amount spent on PPC ads, by the number of conversions.

Best Practices

To get active in PPC auctions, an advertiser creates an advertisement account on the platform and uses the choices available to determine where and when they want those advertisements to appear on the platform.

When you use Google Ads, for example, your account is split based on the various campaigns. Also, each campaign is split into ad groupings that include keywords and related ads. You need to consider your overall goal and create a budget-friendly campaign to build a PPC campaign that follows best practices.

Here are two tips to you get started:

1. Decide your optimal budget and create a realistic plan.

Be logical about your budget and the targets you set. If you know how much you can afford and distribute your funds wisely accordingly, you’ll have a far greater chance of success.

 For instance, if you have a small budget to work with, you shouldn’t make awareness-raising your PPC campaign target. You will not be able to attain the type of wide reach using ads without paying an absurdly high sum of money. Focus instead on using PPC advertising as a mechanism to push a particular action (like signing up for your newsletter to earn a time-limited discount).

2. Don’t rely too heavily on automated bidding.

Automated bidding is perfect when you’re a skilled PPC advertisement professional who recognizes which errors to avoid in automation. One of the online advertising’s biggest challenges today is finding the right balance between automated bidding and manual PPC bidding. You can never actually “set it and forget it.” Even complete ad automation (which provides such services as Google Ads) involves close monitoring and regular changes.

In simple terms, you need to determine the appropriate target audience(s) for your product or service, and periodically change your automation settings to make an automated PPC ad campaign effective.

Conclusion

The marketing environment of search engines is evolving rapidly, and so are best practices and terminology. We believe this blog post will make the distinction between SEM, SEO, PPC, and Google Advertising much clearer.

Still, feeling lost? Reach out to our team today! We help our customers build highly targeted groups based on who they are, what they’re interested in and their past habits that might impact their future behavior.

The aim is digital ads to improve the high-quality traffic and sales on your company’s website. Our experts at SH1FT are here to help, click on GET PROPOSAL button to get started.

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