Search engine marketing, SEM, puts your paid ad on the search results page when buyers search for what you sell, with exposure starting after approval when your ads qualify for the auction; clicks, leads and sales are measured outcomes. You choose the keywords, the locations and the budget, and you usually pay only when someone clicks. This guide covers the ad types, keyword match types, campaign set-up, the metrics that matter and where to optimise, with worked examples.
What Is Search Engine Marketing (SEM)?
SEM is paid advertising on search engine results pages: you bid for your ad to appear when someone searches for a product or service you offer, and you reach that buyer at the moment of intent. Most SEM runs on a pay-per-click, or PPC, model through Google Ads or Microsoft Advertising, so you pay when someone clicks your ad rather than each time it shows. For the basics in plain English, read what SEM is.
Why does SEM work?
SEM works because it reaches people while they are actively searching for what you sell, which is why it drives qualified traffic, leads and sales quickly. A searcher has already told the search engine what they want. Your ad answers that search directly.
How does SEM differ from SEO?
SEM buys placement on the results page, while SEO earns unpaid rankings, so SEM is faster and SEO lasts longer after you stop spending.
| Measure | SEM | SEO | What it means for you |
|---|---|---|---|
| Traffic source | Paid ads | Organic results | SEM costs per click; SEO costs in content and technical work |
| Speed | Visible soon after ads are approved | Typically months | SEM suits launches; SEO suits long-term demand |
| Lifespan | Runs while the budget runs | Builds value over time | Stopping SEM stops the traffic |
| Control | You set keywords, locations, schedule and budget | Search engines decide rankings | SEM gives tighter control over who sees you |
SEM and SEO compared. For the wider channel picture, read SEO vs SEM vs SMM.
Why Use SEM?
SEM gives you five advantages that organic search alone does not: fast visibility, precise targeting, measurable results, a flexible budget and a presence in crowded markets.
- Fast visibility. Ads go live soon after approval, which suits launches, seasonal promotions and time-limited offers.
- Precise targeting. You target by keyword, location, time of day, device, language and audience, so the budget reaches relevant buyers.
- Measurable results. Impressions, clicks, conversions and cost per acquisition are all tracked, so you see what each dollar returns.
- Flexible budget. You start with a small test, scale what works, and pause or adjust spending as market conditions change.
- Presence in competitive markets. In verticals such as insurance, property and ecommerce, paid search keeps you visible on high-intent searches where organic rankings take longest to earn.
What Are the Main Types of SEM Ads?
Six ad types cover most SEM campaigns: search, display, shopping, video, local and remarketing, and each one fits a different stage of your buyer's journey.
| Ad type | Where it shows | Best for | Main limit | Example |
|---|---|---|---|---|
| Search ads | Search results pages, labelled as ads | High-intent buyers ready to act | Competitive, costly short keywords | "corporate tax consultant" shows your consultation page |
| Display ads | Websites and apps in the Google Display Network | Awareness and retargeting | Lower purchase intent than search | A banner reminds a visitor of your pricing page |
| Shopping ads | Search results and the Shopping tab | Ecommerce products | Needs an accurate, current product feed | "buy standing desk" shows your desk, price and store |
| Video ads | YouTube and Google video partners | Brand stories and product demonstrations | Needs video production | A short ad plays before a product review |
| Local ads | Search and Google Maps | Stores, clinics and local services | Limited reach outside your area | "fresh bread near me" shows your bakery and a call button |
| Remarketing ads | Search, display and YouTube | Bringing back visitors who left | Needs enough traffic and tagging | A returning visitor sees an offer for the product they viewed |
The six SEM ad types.
What are search ads?
Search ads are text ads that appear on the results page for the keywords you target, the most common SEM format and the closest to a buying decision. A responsive search ad takes up to 15 headlines of up to 30 characters each and up to 4 descriptions of up to 90 characters each, and Google tests combinations to find the best performers (Google Ads Help, about responsive search ads). Assets such as sitelinks, callouts and structured snippets add detail and make the ad larger on the page.
What are display ads?
Display ads are visual ads, such as banners, images and video, shown on websites and apps in a display network, and they target people by interests, demographics, topics and placements rather than by search. They build awareness and retarget past visitors. Click-through rates are usually lower than on search ads, because the viewer is not searching at that moment, and the same banner loses attention when shown too often.
What are shopping ads?
Shopping ads show your product image, price and store name directly in the results, which suits ecommerce businesses selling physical products. They run from a product feed you upload to Google's merchant platform, and the feed needs accurate, regularly updated product data. Popular product categories are competitive and costly.
What are video ads?
Video ads run on YouTube and Google video partners before, during or after other videos, and they suit brand stories, demonstrations and recall. Formats include skippable and non-skippable in-stream ads, in-feed ads and bumper ads, which are non-skippable ads of 6 seconds or shorter (Google Ads Help, video ad formats). Depending on the format, you pay per view or per thousand impressions. Video needs production investment and suits awareness more than immediate sales.
What are local ads?
Local ads put your business in front of nearby buyers on Google Search and Maps, with your location, opening hours and directions, so they suit stores, restaurants, clinics and local services. In Google Ads, a Performance Max campaign with store goals drives in-store visits and calls across Google's channels (Google Ads Help, Performance Max for store goals). You need a verified, complete Google Business Profile, and reach stays inside the area you target.
What are remarketing ads?
Remarketing ads target people who visited your website without converting, bringing them back to finish a purchase or enquiry. They run across search, display and YouTube, using audiences built from page visits and actions. They need enough site traffic and correct tagging, cookie consent rules limit who you track, and showing the same ad too often causes fatigue.
How Does SEM Work?
SEM runs in six steps, from keyword research to optimisation, and every step affects how much each customer costs you.
- Research the keywords your buyers use, with tools such as Google Keyword Planner, Semrush or Ahrefs.
- Write ads that answer the search, with a clear call to action and a link to a relevant landing page.
- Bid in the ad auction for the keywords you choose.
- Appear on the results page, labelled as an ad or sponsored result, when your ad wins a position.
- Pay when a searcher clicks, on the pay-per-click model.
- Track clicks, cost per click, conversions and return on ad spend, then refine bids, keywords, copy and landing pages.
How does the ad auction decide position?
Google ranks ads by Ad Rank, which combines your bid, the quality of your ads and landing page, Ad Rank thresholds, the competition in the auction, the context of the search and the expected impact of your assets (Google Ads Help, About Ad Rank). The highest bid does not always win: a more relevant ad competes at a lower cost. Quality Score is a separate diagnostic, rated 1 to 10 from expected click-through rate, ad relevance and landing page experience, and Google states that it is not an input in the ad auction (Google Ads Help, Quality Score).
How Do Keyword Match Types Work?
Match types set how closely a search has to relate to your keyword before your ad shows, which balances your reach against wasted spend.
| Match type | How you write it | When your ad shows | Best for | Example |
|---|---|---|---|---|
| Broad match | low carb diet plan | Searches related to your keyword, including some without its direct meaning | Wide reach and finding new search terms | Shows for "carb free foods" and "mediterranean diet books" |
| Phrase match | "tennis shoes" | Searches that include the meaning of your keyword | Balance of reach and relevance | Shows for more specific searches about tennis shoes |
| Exact match | [red shoe] | Searches with the same meaning or intent as your keyword | Tight control on high-value terms | Shows for searches meaning red shoes |
| Negative keyword | A term you exclude | Your ad does not show for searches containing it | Cutting irrelevant clicks | Excluding "blackboard" when you sell whiteboards |
Match type definitions, syntax and the broad match example: Google Ads Help, about keyword matching options, October 2026. The other examples are illustrative.
How do you combine match types?
Combine match types in layers: broad match to discover searches, phrase and exact match for the queries that convert, and negative keywords added every week to block the rest. Broad match gives the widest reach and the highest risk of irrelevant clicks. Exact match gives the most control and the fewest searches. Negative keywords keep the budget on searches with buying intent, but review them so they never block valuable queries.
How Do You Set Up Your First SEM Campaign?
A first campaign follows seven steps, and the decisions made at set-up decide your targeting, budget control and conversion rate for months afterwards.
Step 1: How do you open a Google Ads account?
Open a Google Ads account, then set your business goal, location, billing method and currency, which forms the base for every campaign and report. Goals include website traffic, leads and online sales. The account runs in three layers: the campaign sets your objective and budget, the ad group holds a theme, and the keywords and ads inside it match specific searches.
Step 2: How do you choose keywords?
Choose keywords by intent first, because a buyer's search words show whether they are ready to act. Use Google Keyword Planner, Semrush or Ahrefs, and prioritise:
- High-intent terms, such as "book dentist appointment".
- Local terms, such as "electrician Toa Payoh".
- Long-tail terms, which face less competition and bring better-qualified traffic.
Group keywords by theme, so each group becomes an ad group. The keyword research guide covers the method in depth.
Step 3: How do you write the ad copy?
Write ads that answer the searcher's intent and state your selling points plainly, so the right buyers click and the wrong ones skip.
- A clear headline with the main keyword and the benefit, such as "End Paperwork With Simple Accounting Software" instead of "Accounting Software".
- A description that expands on the headline with what the buyer gets.
- A call to action, such as "Get a Free Quote" or "Book a Demo".
- Assets: sitelinks, callouts, location details and structured snippets.
Step 4: How do you set targeting and bidding?
Set targeting and bidding so your ads reach the right buyers at the right time without wasting budget.
- Locations: the cities, regions or countries where your buyers are.
- Devices: desktop, mobile or tablet, based on how your audience searches.
- Bid strategy: manual bidding per keyword, or automated strategies such as Target CPA or Maximise Conversions, which set bids in each auction from Google's conversion data.
- Bid adjustments: higher bids for high-value locations, times of day or devices.
Step 5: How do you build the landing page?
Build a landing page that matches the ad's message, loads fast on mobile and makes the next action obvious, because the landing page decides whether a click becomes an enquiry. A close match between ad and page also improves ad quality, one of the Ad Rank factors.
Step 6: How do you launch and monitor the campaign?
Launch with conversion tracking in place, then check impressions, clicks, click-through rate, conversions and spend every week. Review the search terms report and add irrelevant terms as negative keywords. Set up Google Ads conversion tracking or Google Analytics 4, so you measure what buyers do after the click.
Step 7: How do you optimise over time?
Optimise every week or fortnight, moving budget towards the keywords, ads and segments that convert.
- Pause or rework keywords and ads with low click-through or conversion rates.
- Test ad copy and landing page changes against each other.
- Shift budget to the best locations, devices and keywords, and lower bids on segments that do not convert.
- Keep adding negative keywords.
Which SEM Metrics Matter?
Nine metrics show whether your SEM spend returns business value, and the most important are the ones tied to conversions and revenue.
| Metric | What it measures | How it is calculated | Why it matters | Where to optimise |
|---|---|---|---|---|
| Impressions | How often your ad is shown | Count of ad displays | Reach | Targeting, ad quality and bids |
| Clicks | Visits from your ad | Count of clicks | Traffic | Ad copy and targeting |
| Click-through rate | How often a shown ad is clicked | Clicks divided by impressions | Ad relevance | Ad testing and keyword fit |
| Cost per click | Average price of a click | Cost divided by clicks | Budget efficiency | Ad quality and bid strategy |
| Conversion rate | How often a click becomes an action | Conversions divided by clicks | Landing page effectiveness | Landing page and offer |
| Cost per conversion | Average cost of a lead or sale | Cost divided by conversions | Profitability | Targeting and bidding |
| Quality Score | Google's 1 to 10 diagnostic of ad quality | Expected click-through rate, ad relevance and landing page experience | Shows where ad quality lags | Keyword, ad and page alignment |
| Impression share | Share of eligible impressions you received | Impressions divided by total eligible impressions | Missed opportunity | Budget, bids and ad quality |
| Return on ad spend | Revenue for each dollar spent | Revenue divided by ad cost | Campaign profitability | Budget allocation and conversion rate |
Key SEM metrics. Quality Score and impression share definitions: Google Ads Help, Quality Score and Google Ads Help, impression share, October 2026.
What does a low impression share tell you?
A low impression share means your ads missed searches they were eligible for, usually because of budget or Ad Rank. Google calculates it as your impressions divided by the total impressions you were eligible for, estimated from your targeting, approval status and quality. Raise the budget on campaigns that convert, or improve ad quality before raising bids.
Which Areas Do You Optimise in a Running Campaign?
Five areas decide how much of your budget reaches buyers ready to act: keywords, ad copy, bidding, landing pages and ongoing monitoring.
- Keywords. Remove underperforming terms, add long-tail terms with clear intent, and keep adding negative keywords.
- Ad copy and assets. Align headlines and descriptions with intent, use clear calls to action, and add sitelinks, callouts and location details.
- Bidding and budget. Use automated bidding where conversion data supports it, adjust for device, location and time, and move budget from weak campaigns to strong ones.
- Landing pages. Keep the page relevant to the ad, fast and mobile-friendly, with one clear action.
- Monitoring. Track click-through rate, cost per click and conversion rate, and test changes one at a time.
Which SEM Tools Do You Need?
A working SEM stack needs an ad platform, keyword research, analytics and a way to test landing pages.
| Tool | What it does | Best for | Made by |
|---|---|---|---|
| Google Ads | Ad platform for search, display, shopping, video and apps | Keyword and audience targeting on Google | |
| Google Keyword Planner | Keyword ideas, search volume and forecasts inside Google Ads | Finding commercial-intent keywords | |
| Microsoft Advertising | Ad platform for Bing and partner sites including Yahoo, AOL, DuckDuckGo and Ecosia | Reaching searchers beyond Google | Microsoft |
| Semrush or Ahrefs | Keyword and competitor research suites | Finding gaps and benchmarking competitors | Semrush; Ahrefs |
| Google Analytics 4 | On-site behaviour, conversions and attribution | Measuring what happens after the click | |
| VWO | A/B testing for landing pages | Improving conversion rate | Wingify |
SEM tools. Microsoft Advertising network: Microsoft Advertising Help, October 2026. Track your organic positions alongside paid results with rank tracking tools.
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