SEO and SEM: The chicken and the Egg dilemma

Search engine optimization (SEO) has for a decade been the elixir for websites which have meandered aimlessly in internet anonymity. Manipulating the website content so as to appear on top of the search engine results appeared to be the most effective of way attracting the internet customers whose span of attention seemed to be decreasing with every passing hour. However no reign lasts forever and SEO’s supremacy over the destiny of websites was finally challenged by its distant similarly named (somewhat controversial) cousin Search Engine Marketing (SEM).

Although SEM (initially known as the less than flattering Pay per click advertising) came into prominence at the same time as SEO it took a while before it could capture the attention of the website owners the same way as SEO did. The introduction of Google Adwords in 2003 really thrust SEM into spotlight and also made the search engines realize they could actually make money out of SEM. Today SEM has become the primary source of revenue for search engines around the world such as Google, Yahoo and Microsoft.  

While SEM has quite clearly taken off, the ethical dilemma concerning search engine companies charging website owners to display their websites in a vantage position amongst the search engine results remains. There would always be questions as to why should one pay to appear on top of Search engine results when they have a product/service which is captivating or done enough in terms of SEO to appear on the 2^nd or 3^rd page of search engine results. The answer lies in some staggering research numbers. Research shows that 90% of the internet population does not go beyond the first page of the search engine results and 73% of them use search engines when they visit a website for the time (neutralizeSEM,2007). Almost one sixth of the world’s population i.e. one billion people browse the World Wide Web every day. These are mind numbing numbers to consider for businesses which plan to use internet to get ahead of their competitors by tapping into the demands of the internet customers.

Since we have explored the origins and advantages of SEM and SEO I would now want to revert to the question which is the focal point of this blog i.e. the chicken and egg problem of SEO and SEM.  I would also want to briefly talk about Mr. Jason Lancaster’s article titled “Which first SEO or SEM” (Lancaster,2010) that first got be thinking about this topic. The article puts forth some great points as to why organizations should consider SEO or SEM or should consider both based on their business requirements. Mr. Lancaster’s article makes a great point when it mentions that SEO works best for established websites whose management has spent years in optimizing the site’s content to ensure that the site appears at the top of search engine result pages (SERP). The article also mentions that SEO is usually less expensive than SEM. While this might be true in the short term, over a longer period of time the costs associated with employing SEO or SEM even out because of the expenses associated with continuously modifying the site’s content and also possibly employing a website optimization team. The article doesn’t delve into much detail on how these two online marketing paradigms are related and this is something which I would like to concentrate upon for the rest of the article.

The reason why SEM is attractive to many start ups, small and medium sized companies is because of the pay per click principle which means that the online businesses pay only when someone clicks on their website link appearing on the SERP. Most online businesses have a prior agreement with the search engine regarding the amount that they are willing to pay the search engine for prominently displaying their website. For Example: John’s shoes could arrange to pay $0.5 for a click with say Google for displaying John’s site prominently on the SERP. The larger the amount that John would be willing to pay for a click the higher John’s site would appear on the SERP. But John could also ensure that his site appears at the top of the SERP through superior SEO techniques (Search engines such as Google tends to rank a site which has better SEO techniques higher than the site which pay more but with inferior SEO) which means that John’s site could appear higher up on the rankings without having to pay a higher dollar amount per click if only the site’s content was optimized in the first place. The simple example above serves to illustrate the fact that SEO and SEM could go hand in hand.

As impossible as it is to say whether the chicken or the egg comes first it is also difficult to find out whether organizations wholly opt for SEO or SEM. Most businesses with limited budgets and technical resources might opt for SEM while those with technical knowhow might opt for in house SEO by avoiding the costs associated with SEM. Those with sufficient financial resources and technical knowledge might go for both. In any event a combination of both the techniques works out best for the long term strategy of a company.

The internet marketing space has become really interesting with the announcement of search alliance transition between MSN adCenter and Yahoo’s Search Marketing. MSN taking over Yahoo’s search engine marketing practice takes it to the 2^nd position with almost 30% market share for SEM with Google sitting firmly in the first position with a 60% market share. The virtual duopoly promises an interesting battle for online marketing supremacy in the near future that would not only benefit the smaller and midsize businesses but also introduce some exciting technology trends which would be a subject matter on this very blog. So until next time here’s hoping that everything goes well in your personal life, marketing (professional) life and your significant others lives.

Yours Marketably,
J.J. Chaitanya

References

1. neutralizeSEM(2007, July 24). What is search engine marketing?.
    Retrieved from http://www.youtube.com/watch?v=r6--NfGKbsA
2. Lancaster,Jason. (2010). Which first SEO or SEM?.
    Retrieved from Business Source Complete.