Search engine marketing (SEM) means paying a search engine to show your ads when people search for particular terms. In current usage it almost always refers to paid search on Google Ads and Microsoft Advertising. Some older definitions fold SEO into SEM as well, so check which meaning a colleague or vendor has in mind before comparing numbers.
How SEM works
You choose keywords, write ads and set a budget and bidding strategy. When someone searches, the engine runs an auction among advertisers whose keywords match the query and decides which ads show and in what order. You usually pay only when someone clicks, which is why SEM and pay-per-click are often used as synonyms.
The engine weighs more than your bid. Expected click-through rate, ad relevance, landing page experience and the context of the search all feed into where, and whether, an ad appears.
SEM for SaaS companies
For B2B SaaS, paid search is strongest where intent is clear and commercial: category terms (“project management software”), comparison and alternative searches, and your own brand name. It is weaker for early research queries, where the searcher is far from buying and clicks can be expensive.
Because sales cycles are long, the conversion that matters (a closed deal) can arrive weeks after the click. Most SaaS teams optimize toward an earlier event such as a demo request or trial start and then feed later stages back with offline conversion imports.
- Pick keywords by buying intent, then by volume.
- Send each ad group to a page that matches the query.
- Track a conversion that correlates with revenue, not just form fills.
- Review the search terms report weekly in the early months.
Example
A first paid search test
Hypothetical company Ledgerwren sells reconciliation software to finance teams. It starts SEM with three campaigns: its brand name, a small set of category terms and a set of “[competitor] alternative” terms that point to its alternatives page.
After a month it compares cost per demo across the three, using a budget small enough to treat as a learning cost, and moves spend toward the campaign whose demos turn into qualified opportunities.
Common mistakes
Treating SEM and SEO as rivals
They draw on the same keyword research and the same search results page. Teams that share data between them usually make better decisions in both.
Optimizing for clicks
Cheap clicks from vague queries can look efficient and produce no pipeline. Judge campaigns by a conversion that sales cares about.
Questions
Mostly. PPC describes the pricing model (pay per click) and also covers social and display ads, while SEM describes the channel (search engines). In everyday conversation about Google Ads, people use them interchangeably.
Sources
