What is Search Engine Marketing and How is it Used?

We’ve come a long way since OpenText ran the first search engine ad in 1996.

Now, anyone can run an ad on Google and discover competitor ad strategies.

The appeal of search ads is clear: an estimated 54% of all clicks go to the first 3 Google search results. So why not leap to the top of the page with an ad?

Analysts expect search advertising spending to reach $483.5 billion by 2029. And Google’s share of US traditional search ad spending is estimated to grow to 70%.

What exactly is search engine marketing, and how can you compete?

What is Search Engine Marketing?

Search engine marketing (SEM) is a digital advertising strategy that uses paid ads to achieve website goals.

As the name suggests, these ads are placed on search engine results pages (SERPs).

While primarily used by businesses, nonprofits, and individuals also use search ads.

SEM ads are versatile enough to be effective for brand awareness, product or service leads, or purchases.

SEO vs. SEM

So, how do SEO and SEM compare?

Both SEO and SEM begin with keyword research. In SEO, the marketer creates content that targets selected keywords. The goal is for the web page to rank high in search results.

It may take 6 months to a year or more for SEO results to climb and peak.

By contrast, with search engine ads, marketers can target the same keywords and appear on page 1 of search results immediately.

Many businesses use a mix of SEO (free) and SEM (paid) strategies.

Examples of Search Engine Ad Tactics

What you can accomplish with SEM ads is impressive. Here are a few examples.

The sneak attack: With a tool like Semrush, you can find out which keywords bring in the most money for your competitors.

Then, you can run an ad on those keywords, diverting prospects with buying intent to your own site.

Doublestack: Ever wonder why a website runs an ad on its own business name? It helps counteract the impact of the sneak attack described above.

Here’s a great example. When searching for “Google Ads,” the first ad displayed is for the Google Ads website.

This ad is followed by ads from LinkedIn, Taboola, and skai.io, all hoping to siphon some ad money away from Google.

Below those 4 ads, we finally get the blue links for the Google Ads site itself.

Crash the party: When prospects are comparing products, they often use “vs” as part of their search.

Do you see what Monday.com and Tech.co did below? You can do it too. Simply identify your 2 top competitors and run a “vs” ad.

Pay-per-Click (PPC) vs. Pay-per-Lead

There are 2 main categories of search engine marketing ads: pay-per-click (PPC) and pay-per-lead.

Pay-per-click means the advertiser only pays if someone clicks on the ad. Before the ad launches, the advertiser sets the cap for monthly costs.

Keep in mind, PPC is a type of ad that is not limited to search engines. For instance, PPC ads may also appear in YouTube videos or at the top of a Gmail page. But here, they would not be considered part of search engine marketing.

Pay-per-click simply refers to how the advertiser is charged.

Pay–per-lead: In 2021, Google launched pay-per-lead ads. These ads are for service-based businesses and solopreneurs, like real estate agents, plumbers, consultants, or electricians.

With this model, the advertiser only pays for leads acquired directly through the ad. Prospects can call, text, or fill out a form.

Google does an excellent job of screening out charges from people who aren’t leads. For example, someone may see an ad and call to inquire about a job.

The advertiser retains the ability to dispute charges.

In addition, a business can obtain the Google Guaranteed badge. This means Google will guarantee the quality of work done and refund the customer.

There’s a country-based lifetime cap on refund totals. For instance, in the U.S. the cap is at $2,000.

Where Do SEM Ads Appear?

Google has the largest market share among search engines. Because of this, Google Ads are the most popular search ads.

However, other search engines, like Bing and Yandex, also offer PPC advertising.

In addition, retailers like Amazon and Walmart, as well as social media platforms like Facebook, offer PPC ads that are triggered by searches.

Using Google Ads as an example, let’s walk through how search engine ads are created. This will help you understand what types of ads are available and how the process works.

As you’ll see, Google Ads offers more than just SEM ads.

How SEM Works: Setting Up Google Ads

To get started, navigate to Google Ads. (This service used to be called Google AdWords.)

You’ll see an offer for free ad credits. To use these credits, you’ll need to first spend a set amount on campaigns.

Choose an ad credit amount, or click “Start Now” to skip it.

Set your goal: Now, choose a goal for your campaign. Your options are:

• Sales
• Leads
• Website traffic
• Product and brand consideration
• Brand awareness
• App promotion
• Local store visits and promotions

Mine is “Sales.”

Select Campaign Type: The campaign type determines where your ad will appear. Choose from:

• Search
• Performance Max
• Display
• Shopping
• Video
• App
• Smart
• Local
• Discovery

Your choice of Campaign Type also determines how easy your ads are to set up.

For instance, Performance Max and Smart have simple workflows designed for beginners.

Performance Max offers a few more choices than Smart does.

For our example, I’m choosing “Performance Max” for its simple workflow.

If you want granular control, choose the “Search” campaign type.

We’ll start our campaign by adding our business information.

1. Add Business Information

In this step, you’ll give Google the name of your business and the URL you want your ad to link to.

For our example, I’ve used the business Conscious Step. This is a brand that promotes fair trade and sustainable products.

I’ll be setting up an ad for their popular cat socks. A portion of the proceeds from these socks go to help save stray cats.

Next, you’ll describe your business. In our case, Google pulled information from the internet to pre-fill a description box.

I added some search terms.

Notice how you’ll have the option to link your other Google accounts to your Ads account. This provides more data for Google to analyze and draw suggestions from.

2. Create your campaign

Choose a goal: Next, you’ll choose your goal for the campaign.

Below, I chose “Purchases”, but you can also pick from a long list of prospect actions, sorted by purchases, leads of various kinds, free signups, phone calls, text, app promotion, book appointments, and so on.

Because I selected purchases, I had to add a URL for a success page so results could be tracked by Google.

Define your audience: Next, you’ll define who should see your ads by search intent, location, and language.

Here, you’ll add some phrases people use when searching for your products. In my case, I’ve used the phrase “socks that save cats” because that’s how many people refer to the Conscious Step socks.

Create your ad: Google Ads will automatically generate an ad for you by using the information you provided and pulling data from your website and social media accounts.

Below, we can see what our ad will look like in Google Search results.

Also notice that you can tab between other ad types or placements, such as YouTube, Gmail, and Display.

Set your bid strategy: Here, you’ll choose from:

• Conversions
• Conversion value
• Set a target cost per action

For our example, we chose “Conversions.”

Set your budget: We chose the recommended average daily budget of $91 for this campaign.

To wrap it up, you’ll add your payment method and launch your ad.

Ad Auctions and Bid Strategy

Google Ads’ help documentation provides everything you may want to know about how ad auctions and bidding work, including automated bidding.

You don’t need to understand it all to get started, though.

I recommend exploring this Pick the Right Bid Strategy table.

Keyword Research and Ad Management

Using a quality keyword research tool for SEO and ad management is key for search advertising success.

Here, I recommend Semrush, which I’ve used for around 10+ years.

I’ve found the Keyword Gap tool to be invaluable. You can identify keywords your competitors are ranking for, but you aren’t.

Then, you can filter these to get a list of keywords that signal buying intent. These will be labeled C (Commercial) or T (Transactional).

This is how you can take advantage of the ad tactics described earlier in this article.

Semrush is also going to show you:

• Keyword difficulty ratings
• Estimated search volume
• Cost per click (CPC) prices

This data can help you decide whether it’s more cost-effective to run an ad on a keyword or create content for organic traffic.

Also explore the Keyword Magic Tool. I’ve found it very helpful for discovering relevant keywords for PPC campaigns.

Ad Management: Semrush has the best PPC toolkit I’ve seen.

With their new Ads Launch Assistant, you can launch Google or Meta Ads right from the dashboard.

I think you’ll find this the simplest and fastest way to create and launch ads.

You’ll fill out a short form to get started.

Semrush uses AI to generate ads. You can edit the ads after they’re generated.

This is the same approach Google uses, but I think Semrush has done a better job here.

Sometimes the Google Ads AI will generate too many useless phrases. For example, for our cat socks ad, Google’s AI generated some “animal adoption” headlines. Removing these headlines is not always straightforward.

And the Ads Launch Assistant allows you to choose keyword match types, which can control your ad spend.

The Semrush Ads Launch Assistant is a $99/month add-on. But it saves a lot of time, so it’s a good match for content marketers and agencies.

You can also use Semrush for PLA research and to discover your competitors' ad strategies in detail.

Can I use Semrush to plan Bing ads?

Yes, you can use insights from Semrush to plan Bing ads.

Can I use Semrush to create landing pages?

Yes, you can generate a landing page for ads by using the Semrush Landing Page Builder.

Moving Forward With Search Engine Marketing

Whether you’re a content marketer or owner, these tips will help you make the most of your ad campaigns.

To maximize your results, get Google’s expert assistance in setting up your first ads. They’re motivated to make your campaigns successful.

Next, realize that some industries, like finance and trading, are typically expensive to advertise in. The costs are often too high for solopreneurs.

SEO will also be highly competitive, but targeting low-competition keywords in organic search results can yield success.

For Service-Based Businesses

• Gather basic sales stats before setting up ads for a client. This includes retention numbers and Customer Lifetime Value (CLV).
• Be sure the client has a sales process. This may sound obvious, but not every small business does.
• Who will answer inbound phone calls from ads? Harvard Business Review data shows that online leads fizzle fast. Be sure to schedule ads for time windows when your client can pick up immediately.
• You don’t need to have a website up to start getting leads through Local Services Ads.

For Product-Based Businesses

It’s not uncommon to click on a Google Ad and be led to a dead-end, such as:

• A product page that reads “out of stock”
• A 404 page (i.e., someone changed the URL after the ad launch)

Sometimes, you’ll see time-based ads for events that have ended weeks ago.

To save money, be sure to check ads periodically and stay on top of schedules. And set negative keywords where warranted.

Free listings: If you’re in e-commerce, before you set up paid ads, make sure you’re set up for free listings.

These listings look just like ads, but they’re not.

Consultant Brodie Clark calls free listings the “biggest e-commerce SEO opportunity for 2025.”

New to free listings? Follow Brodie’s advice on how to use them in your SEM strategy.

Ecommerce SEO: reminder that free listings remain the biggest eCommerce SEO opportunity for 2025.

Gained access to a clients NZ GMC Next account. We noticed that free listings weren't enabled – literally flicked a switch and gained 7K+ clicks and considerable revenue associated… pic.twitter.com/syBXnjEkqP

— Brodie Clark (@brodieseo) February 10, 2025

Is Search Engine Marketing Worth It?

Done well, search engine marketing is a powerful way to grow brand awareness, leads, and sales.

With its ability to target users actively searching for your products or services, combined with detailed analytics and automated optimization, SEM remains one of the most effective and measurable marketing investments available in 2025.

Want to start leveraging SEM for your business? Take the first step by using Google’s expert setup assistance or exploring Semrush's ad tools today.