SEM is an acronym meaning Search Engine Marketing or search engine marketing. Specifically, SEM is a marketing technique that places advertisements on search engine results pages based on the keywords used by the online customer to search for various information.
SEM is a valuable form of online advertising because users who search for information through search engines actually declare their interest in what they want (to find out or even buy). This allows companies to bid on the keywords that make up these searches to display a message relevant to the expressed interest of users.
When used correctly, SEM is an effective way to acquire visitors to a site and convert them into potential buyers, allowing you to reach your potential customers without investing large sums of money in marketing to generate notoriety. Your brand, all with a very good ROAS (return on ad spend).
Common mistakes that can cost you money
How do search engines work?
But let's take a short step back and see how search engines work and why search engine marketing agency is so important in this context. In short, search engines have two main features:
- visiting and indexing websites (in order to answer users' questions);
- displaying results pages listing the websites considered to be most relevant to specific searches;
Visiting and indexing the pages of websites is done through automated software programs called robots (in English: robots, crawlers, spiders) that visit websites and save the information on them in databases.
How do you collect the interest of online users through SEM?
In general, users search through search engines for three types of information:
- action: I want to do something, such as buy a plane ticket or listen to a song
- question: I want to find out something, such as which is the best restaurant in town or how to fix my bike myself
- targeting: I want to reach a specific site, such as a news site or the city cinema site
Google's search answer pages provide answers to these types of questions in various ways, from informational areas and paid ads to organic links to sites that offer the most relevant content for user searches.
How do you use AdWords for your SEM campaigns?
Because Google has a market share of about 70% (followed by Baidu, Bing, and Yahoo!), the leading platform used by small and medium-sized companies to run SEM campaigns is AdWords. This Google platform allows you to display your messages on Google search engine response pages.
- Implement the AdWords tracking pixel in your site to measure conversions and allow you to build remarketing lists;
How to structure your AdWords account
The important thing you should know is to open an AdWords account to structure it so that it allows you to organize your campaigns logically and easily optimize different types of ads or ad sets. You can opt for two types of accounts; the standard one gives you complete control over your campaigns or the express one that includes more automation but a limited range of formats and options.
The most important thing about your AdWords account is that you must own it because you need to enter data about your business, such as your company name or billing information. If you need to give employees or an agency access to manage your AdWords campaigns on your behalf, you do it efficiently by inviting new people based on an email address.
You must have one crucial thing to keep in mind is that specific components of your AdWords account, once set up, can't be changed. Specifically, the currency and the time zone.
How to define an SEM strategy
Once you've identified the set of keywords relevant to your business, it's important to make sure that you allow yourself to bid on your keywords and that this will drive sales for your business. To do this, you need to calculate the maximum potential cost (Max CPC = maximum cost per click), taking into account a few elements: the average profit per customer, the profit margin, and the site's conversion rate. The formula is as follows:
Max CPC = (profit per customer) x (1 - profit margin) x (site conversion rate)
Suppose the average profit per customer is 100 RON, the profit margin is 10%, and the website's conversion rate is 1%. In this case:
If Max CPC is similar to the CPC estimated by Google in Keyword Planner, everything is fine. If not, you will need to optimize the average profit per customer, profit margin, or conversion rate of the site.
In addition to the manual cost-per-click optimization strategy, depending on your goals, you can also approach a cost-per-action strategy if you want conversions (leads or sales) or a cost-per-view strategy or per thousand impressions if you have a goal of notoriety or interactivity. In addition, AdWords offers several types of automated strategies for your campaigns, namely:
Target CPA: optimization of the number of conversions based on the established cost per conversion;
Target ROADS: optimization of the conversion value according to the cost per conversion;
Maximize clicks: optimize the number of clicks according to the available budget;
Maximize conversions: optimize the number of conversions based on a CPC or CPM bidding strategy;
Location on the page: optimizing the location on the results page to get to the best position possible;
A few things to keep in mind
It is important to pay attention to the key performance indicators (KPI) for your SEM campaigns and business objectives. This is the only way you will optimize the performance of your campaigns to get good ROADS (return on ad spend).
CPC (cost-per-click) or cost-per-click generated through your SEM campaigns - the lower the CPC, the more effective your lead campaign is;
CPC = budget invested / number of clicks earned
Max CPC (maximum cost per click) or the total cost you can pay for a click so that the acquisition cost of the potential customer will generate profit for you if he turns into a buyer;
Max CPC = (profit per customer) x (1 - profit margin) x (site conversion rate)
CTR or the percentage of impressions that turn into clicks. The higher the CTR, the more effective your campaign is in convincing potential buyers to learn more about your offer;
CTR = number of clicks / number of impressions
CR (conversion rate) or the percentage of clicks that convert into conversions, that is, the percentage of users who came to your site after an ad and bought something or left your contact information ;
CR = number of conversions / number of clicks
CPA (cost per purchase) or cost for each customer purchase;
CPA = invested budget / number of conversions
Remember, the lower your costs and the higher your conversion rates, the more efficient and profitable your SEM campaign is. It is recommended that you set specific performance goals for your SEM campaign based on these metrics.