SEM versus SEOThe real story

Presented By:Richard Kahn, CEO of eZanga.com, Inc.

Who am I?• I am an entrepreneur that focuses on customer

satisfaction.• I started my first Online Marketing company in 1993.• eZanga is my 3rd multimillion dollar web property that I

have built without any outside funding.• I have also worked for several major corporations such

as Verizon and Bloomberg.

What is SEM?• The New York Times defines SEM (Search Engine

Marketing) as “the practice of buying paid search listings”.

• SEM is a very simple concept; you pay a search engine, such as Google, Yahoo, or eZanga to send traffic to your site. The more you pay; the more traffic you get. Google makes it’s Billions from this process alone.

What is SEO?• Wikipedia defines SEO as “the process of improving the

volume and quality of traffic to a web site from search engines via "natural" ("organic" or "algorithmic") search results for targeted keywords”.

• True, SEO is the process of making your site “Search Engine Friendly”. When a search engine visits your site and reads the content, it adds it to its index and attempts to rank it based on relevancy. SEO companies help to make sure that your site is understood by search engines so that it indexes it correctly.

So what’s the Problem?• The problem comes in when SEO companies attempt to make your

site appear to be more relevant than the next site. Who decides which site is more relevant for a search term?– Your site? Or your competitor?– Maybe it’s the site with best SEO company?– What if two companies have the same SEO company?– The Answer: The search engine.

• Google provides search results to their users and they decide on the order.– They purchased and maintain hundreds of thousands of servers and

more than 16,000 employees, to offer this service for free to their users. In turn, users will often click on Google’s advertisers which in turn support Google. This is a very good relationship for both the end user and Google.

The Cat and Mouse game.• SEO Companies and Techniques

– Design the content on your site to make your site “look” more relevant to a search engine in order to gain a higher position on limited keywords.

– Some techniques can even hurt your position or even get you banned from the search engine.

– These techniques can also take months before you see the benefit.

• Google’s Response– Every so often, just to prove to the world that they get to make the ranking

decisions, Google will update their Algorithms.

– SEO Companies then have to reverse engineer the new algorithms and update the techniques that they use.

• Promises– Some companies will promise top positions…just remember, it’s not their

decision.

What is the SEM difference?• With a relavant ad and content, the more you pay per click, the higher up on

the list you go…the higher up on the list you go, the more traffic you get.

• Why does Google, Yahoo, eZanga and other search engines put their PAID listings on top?

– Let’s investigate that using EyeTools. This company can study where users focus on a web page. Here is Google’s page:

– Notice the red area focuses on the top two listings. Since Google makes it’s money throughpaid listings, so it makes sense to pay the rentwith those two listings.

• Another nice attribute of SEM is that you canget results immediately on almost an unlimitednumber of keywords.

How does Google Feel about SEO?• I have to say as a business owner I know how I would feel, but I was

curious to see what I could find on the web.• You would be surprised what I found and by whom:• “The Art of SEO” by Jill Whalen

– http://www.highrankings.com/art-of-seo/

– “As much as Google *pretends* to like SEOs by inviting us to parties at the Googleplex and posting on SEO forums, the bottom line is that they don’t like us — or rather, they don’t like what we do. Google wants to find the best, most relevant sites for the search query at hand all by themselves.”

• Google caters to its users and advertisers, and they both directly affect Google’s bottom line, but how does an SEO firm help Google?

How does an SEO firm help Google?

• If SEO worked well enough to get all of the “free” traffic you want from engines like Google, how would they ever make any money?

• Google does offer tips on SEO as well as warns you that “…you can also risk damage to your site and reputation.”

– http://www.google.com/support/webmasters/bin/answer.py?hl=en&answer=35291

– They warn you several times of possible risks with working with an SEO Company.

So are you saying SEO is bad?• I don’t mean to be coming down so hard on SEO, as every form of

advertising has its place...including SEO.– SEO firms however put themselves out there as the best thing since

slice bread.

– They do this by showing some of the information, but not all of it.

– It’s important to understand the full picture so you can make the right decision for you and your company.

– “SEO and PPC are different ways of paying for listings (nothing is really free).” - http://www.webmasterworld.com/forum81/4944.htm

• Do your research before deciding on the best course of action for your company.

Does SEO gets more clicks than SEM?• There is a lot of information out there to help answer this question.

However here is what I found:– “Organic listings receive more clicks than paid listings on Google.com,

depending on the nature of the search, HOWEVER, individual businesses receive more clicks on the paid listings than on organic listings.”

– So, are we all confused yet?

– Many SEO firms will partially quote this to show that SEO is the way to go…but they are not showing you all of the math.

Understanding the Math.• To Understand the math you need to know what a “commercial search

term” is versus an “informational search term”.

•

• Think about the last couple of times you visited a search engine…were you looking to buy something or do research? That covers the first portion of my quote “Organic listings receive more clicks than paid listings on Google.com,depending on the nature of the search…”

Commercial Search Term Informational Search Term

The Math• The next part of my quote is “…HOWEVER, individual businesses

receive more clicks on the paid listings than on organic listings”.

• Google numbers estimate 30% - 35% of all clicks go to Paid Listings. For this example, let’s be conservative and use the 30% number. So, of all of the clicks that take place on Google.com, 30% are conducted on paid listings.– This means that 70% go to the organic results.

– This is what SEO firms show you…but what they don’t show you is how many sites share those clicks…and that is a key to this equation.

The Math• How many share the 30% of the clicks? According to Google, they have

hundreds of thousands of customers.

– (http://investor.google.com/faq.html#customers)

• Wikipedia says that Google indexes tens of billions of sites. So that means that the 70% clicks get split up by tens of billions of sites. Granted, the higher up the list you are the bigger the share you get.

– http://wiki.answers.com/Q/How_many_sites_does_google_index

• Therefore there is more traffic per customer with Paid Listings than there are with organic results.

• That explains the second part of my quote “…HOWEVER, individual businesses receive more clicks on the paid listings than on organic listings”.

The Math• Here is an interesting article that shows that Google’s top 3 listings get

almost 63% of all clicks on that page:– http://www.redcardinal.ie/search-engine-optimisation/12-08-2006/clickthrough-

analysis-of-aol-datatgz/– This shows that 63% of all clicks go towards Paid Listings, assuming Paid

Listings are present…if they are not present, then 100% of the clicks go to organic listings and help inflate the total percentage of clicks that go to organic listings.

• So, if you are a business that is selling something, you are targeting consumers that are conducting commercial searches. Commercial searches almost always yield paid listings and that is the type of customer you are looking to attract to your site.

• So when an SEO firm quotes that only 30% of the clicks that happen on Google go to paid customers…they are not looking at commercial searches, after all if you are selling a “new bmw 525i” would you care about the data on informational searches such as“mysql database table structure”?

How many words can I target?• SEO techniques vary, but typically you can target a handful of

keyword phrases per page.– If you want to target more keywords, then you need to do that with other

pages on your site.

• SEM is a bit different, there really is no limit to the number of relevant keyword phrases that you can use.– This is extremely helpful depending on your site and what searched

terms you need to use.

mortgages

Home loans

Used car

Chess boards

New computer

Weight losstickets Flight schedules

Meet people

HVAC

Still not convinced?• Ok, so all of this makes sense for traffic on Google.com, but what

about the other sites that drive traffic to SEM listings and not to SEO?

– Google puts their paid listings on site like cheapflights.com, PC Magazine, Wired, MLB.com, NHL.com, Reader’s Digest, MySpace, YouTube, just to name a few.

• It has recently been noted that Google.com generates 7 Billion Searches per month, yet Google’s network has been estimated somewhere around 70 Billion.

– With SEO you can compete for your share of the 7 Billion Searches, yet with SEM you have access to around 10 times that amount.

Conclusion• Points to remember

– There is a time and place for all forms of advertising.– Be sure to investigate them and know what to expect from each.– Make sure your site is “Search Engine Friendly”.– SEM and SEO are two different ways to BUY search engine traffic.

• SEM:– Offers immediate results so that you can see traffic increase the same day you

start your campaign.– Has access to much more traffic than SEO.– Gives you an unlimited keyword targeting advantage.

• SEO:– Is a long process and can take months to see results.– Targets only a handful of keywords per page.– Can be inexpensive if you do this yourself.

Contact Us

eZanga.com, Inc.291 Carter Drive, Suite A

Middletown, DE 19709

888-4-EZANGA

http://www.ezanga.com/whitepaper/seo_vs_sem/