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SEO vs SEM: Which is Better For Small Businesses

September 7, 2019
Posted in PPC Audit, SEO
September 7, 2019 Brett Farmiloe

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SEO vs SEM

Small businesses have to generate high-quality website traffic from search engines to grow online. But there’s a lot of confusion between organic and paid search (SEO vs SEM), and which is best for your business.  

In this post we will cover:

  • The difference between SEO vs SEM
  • How SEO and SEM can work together
  • Whether to invest in SEO vs SEM
  • SEO vs SEM Frequently Asked Questions

Let’s dive into the search marketing differences between SEO vs SEM.

What is the difference between SEO vs SEM?

SEO and SEM are often used interchangeably, but there is a difference between the two practices. 

SEO stands for search engine optimization, and refers to the practice of increasing performance in organic search engine result pages. 

SEM stands for search engine marketing, and refers to money-backed search engine marketing activities like buying PPC (pay-per-click) ads

The objective is to get more visibility on search engine results pages (SERPs). The difference is that SEO is about making your site better for search engines, while SEM is about making your paid advertisements better. 

To help illustrate this difference, here is an organic search result likely to be generated by SEO best practices

what is seo organic search result

And here are paid search results generated by SEM activity: 

what is sem

The difference between the search engine results is that one is a paid ad, and the other is displayed by Google organically through an algorithm as a best result matching a user search query. 

What does this mean to a small business? If you are engaging in SEM and advertising on search engines, you will pay a search engine like Google every time a user clicks on your advertisement. If your website appears organically in a search engine result page, you will not pay for every click to your website. 

In other words, the difference between SEO vs SEM is two letters: Ad.

google ad

What is included in SEM?

Let’s further break down our definitions by looking at the key components of SEM strategies.

Here are different PPC campaign types for Google AdWords & Bing Ads:

  • Search Ads
  • Dynamic Search Ads
  • Retargeting Ads (RLSA campaigns)
  • Mobile Ads
  • Shopping Campaign Ads

Here are different SEM management activities typically performed:

  • Create ad copy
  • Add keywords
  • Manage budget
  • Execute CPC Bid Adjustments
  • Monitor Quality Scores
  • Create a landing page for specific keywords
  • Check conversion rates
  • Adjust campaigns based on performance

sem google ads screenshot

Side note: this screenshot is from our agency Google AdWords account. Our ads had more than 1B impressions for specific keywords in the last 10 years, with more than $3M spent on clicks…before we refined our online marketing services (more on that below). 

What is included in Search Engine Optimization (SEO)?

Now that we have covered SEM, what is typically included within an SEO strategy?

Here are different types of SEO:

Here are types of SEO campaign management activities performed:

google search console dashboard

Side note: this screenshot is from Google Search Console, showing total clicks and impressions generated through organic search results and SEO activities. 

How SEO and SEM Work Together

Not that we’ve covered the differences between SEO and SEM, how do they work together? 

SEM is a great internet marketing strategy to get instant visibility on search engines. You can target a keyword and show your advertisement on a search engine result page overnight. SEM is especially helpful for small businesses just starting out.

On the other hand, SEO can take between 4-12 months to see results. The benefit of SEO is that if you are successful in getting high quality content to prominently display on search engine result pages, then your website can receive clicks from users at no cost to your business. 

So how do the two work together? This graph is an excellent depiction of their relationship: 

SEO vs SEM

Image Credit: Trifecta

Every business has a target number of leads need to achieve their goals. At the outset of a digital marketing strategy, SEM and paid advertising can help achieve the target number of leads while SEO begins to work in the background.

Over time, SEO should reduce or replace paid advertising spend in order to achieve the target number of leads at the most efficient cost per lead.

Could you solely rely on SEM to drive leads? Of course. But, you will be subject to rising ad costs and gradually your cost per lead will increase along with your costs per click. 

Could you solely rely on SEO to drive leads? You can, but you should be aware that SEO will take time to drive results, and the first few months will not generate much (if any) lead activity. 

If you are starting a new venture, SEM and paid advertising may be your best investment.

If you are an established small business looking to generate more sustainable and predictable lead flow, then SEO may worth the investment

Organic Clicks versus Paid Clicks

SEO generally generates more traffic and clicks for specific keywords than SEM. People tend to trust organic search results more than paid results.

This is especially true when “trust” is more of a factor in a purchasing decision.

For example, let’s say you’re considering getting LASIK eye surgery to correct your vision. You go to a search engine like Google, Yahoo, Bing, or DuckDuckGo, type in LASIK eye surgery, and you are met with four ads.

paid clicks

You then see local search results, perhaps some commonly asked questions like “can LASIK make you go blind?” and then the organic search results.

organic clicks

There’s a big difference between the organic results (Mayo Clinic) and the paid results (20/20 or your money back!). And if you’re like 76% of the people who search “LASIK eye surgery,” you are clicking on the organic search results over the 24% who click on the paid results.

percentage clicks organic vs paid

Now, let’s consider a search for something less invasive than eye surgery like “red shoes.” Approximately 39% of all clicks for this search query go towards paid results, while 61% of clicks go towards organic.

That’s a much more manageable gap, but one that still favors organic search results.

paid organic clicks

Bottom line is that when considering SEO vs SEM, you need to consider how a first page placement will generate results for your products or services.

Competitors

Competition makes things difficult.

For SEO, competitors with higher domain authorities and more brand awareness make it difficult to rank on the first page for target keywords.

For SEM, competitors with bigger PPC budgets drive up pay-per-click advertising costs and make it more expensive to acquire leads.

Take our LASIK eye surgery keyword example from above. This is a hard keyword to rank for based on the difficulty score (are you really going to outrank Mayo Clinic for this keyword?). And, this is an expensive keyword to advertise for (are you ready to pay $20 per click?).

What’s a small business to do in this situation? How do you compete?

An effective SEO strategy or SEM strategy looks to answer this question by identifying overlooked opportunities.

For example, SEO title tags and meta descriptions might take aim at localized keywords (lasik eye surgery charlotte), or specific use cases for LASIK (ie: lasik eye surgery for reading, farsightedness).

Meanwhile, an SEM strategy might geo-target searches within a specific location, while utilizing negative keywords to help the budget go farther (ie: excluding the word “medicaid” – if you don’t accept medicaid – which costs $35 / click when used with lasik eye surgery).

top ten serps

Competitors may be stronger. Their influence should not be ignored in deciding whether an investment in SEO or SEM is the best internet marketing strategy.

Finding High Quality Help

When looking to experts to help with SEO and SEM, there are a few things to consider. 

There are 14,000+ digital marketing companies listed on Clutch, and 50% of them have less than 10 employees. The majority of digital marketing companies don’t have the bandwidth to be an expert in all areas, but most of them still offer both services. 

clutch ad agencies

The same thing happened to us. Our agency offered SEO and SEM services, but the differences in results were stark: 

Here’s what clients said about SEO:

seo

Here’s what clients said about SEM:

ppc email

If you are going to use one agency to manage both SEO and SEM, make sure it is a large agency who has internal teams devoted to just SEO & SEM. Those internal teams are essentially agencies within an agency. 

So, the decision comes down to whether you should hire two SEO / SEM agencies (a lot to manage), a Full-Service agency (expensive), or invest in either SEO or SEM? It’s worth exploring all the options to explore what is best for your business. 

How SEO & SEM Can Work Against Each Other  

There can be a conflict of interest with both SEO and SEM.

SEM and PPC agencies naturally want to increase a paid advertising budget as it means more to manage, higher compensation, and more conversions that can be “claimed” for the client. 

SEO agencies want to reduce paid ad budgets as it equates to more organic clicks, more management, and more organic conversions “as a result of” SEO efforts. 

SEO and SEM work well together as demonstrated by the graph above. But in order to ensure optimal performance from both sides, the conflict of interest needs to be removed.

When considering hiring a marketing company, make sure to ask about their approach to the conflict of interest between SEO vs SEM.

SEO vs SEM Questions

Here are some frequently asked questions regarding SEO vs SEM.

Which is better SEO or SEM? 

Both SEO and SEM have their place within a digital marketing strategy. 

SEO is better for more established businesses who are looking to drive inbound leads organically, and are willing to invest in a long-term optimization process. 

SEM is better for businesses who are looking to drive inbound leads quickly, and are willing to pay for the traffic to get those leads. 

Either way, both SEO and SEM increase the likelihood of your business being found online. 

Does SEO help SEM? 

According to Google, Google Ads do not help SEO, and SEO does not help SEM. 

Is paid search the same as SEM? 

Yes. SEM refers to money-backed search engine marketing activities like buying paid search PPC (pay-per-click) ads (such as AdWords). 

Is SEO Free? 

SEO is the practice of attracting free organic traffic through free search listings. However, SEO often requires an investment of either time, management fees, or both. 

Is SEO Paid? 

Paid SEO refers to Search Engine Marketing (SEM). Search listings are free, and cannot be purchased because of the trust users have in Google search. 

Why does Markitors only offer SEO? 

At Markitors, our interests and our client interests are one in the same. We succeed by helping our clients succeed. We cannot enjoy a harmonious relationship without sharing success with our clients. 

When digital marketing providers offer both SEO optimization and PPC advertising services, we feel that marketing objectives are inevitably compromised. Marketing agencies naturally protect their own interests rather than helping small businesses succeed.

It is because of this that we never offer PPC advertising services. This gives our clients the peace of mind that we will never undermine their best interests with marketing strategies intent on boosting our profit margins instead of the bottom line of our clients.

Some agencies don’t believe that a distinction between search results and advertising is all that important. 

Google does. And we do too.

What else? 

If you are curious about learning more between SEO vs SEM, we would encourage you to visit these resources: 

Any other questions, please ask us

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Brett Farmiloe

Brett Farmiloe

Brett Farmiloe is the Founder & CEO of Markitors, a digital marketing company voted a best place to work 3 years in a row. He frequently contributes content about SEO, Careers, and Culture to Forbes, SHRM, Thunderbird, Huffington Post, Mashable, TIME, NextWeb, and more. And, as a dad of 3, he's about that minivan life.