Introduction
Search Engine Marketing (SEM) is vital for every digital marketing plan online. Digitally connecting buyers and merchandisers has evolved from the thrashing times of inception to its present complex mechanism. It has, however, become the norm today as more businesses seek to exploit it to reach their sales target. This article examines its growth, how SEM has continued to shape the marketing world, and the prospects for its future.
We must examine the beginning to understand how SEM has continued to grow. Pay-per-click or cost-per-click advertising (PPC or CPC advertising) was the first form of SEM marketing. Contrary to its traditional advertising counterpart, Pay-per-Impression Advertising, PPC advertising focuses on being purchased by advertisers on a per-click basis rather than per-impression.
This advertising system started in the late 1990s when Global Net Navigator, a company owned by Andrew E. Maltin, invented it. Global Net Navigator, later known as InfoSpace.com, launched its system where advertisers bought space on banners from publishers. In late 1997, InfoSpace.com began selling advertising space on its network of eight search-results pages.
Initially, there were few ways to purchase URLs; however, Info-Space introduced the algorithmic bidding system with Yahoo and Ask Jeeves after a few years. Companies can enhance their visibility in organic search engine optimization (SEO) by paying higher fees, with the most competitive price at the top of search engine result pages (SERPs).
The Inception of SEM: Early Days of Search Engines
The Birth of Search Engines
The early days of the Internet included the invention of tools for searching for information on these early sites—this led to the first search engines. Archie (1990) and Gopher (1991) were the first search engines. They listed the files on the Internet but could mostly index and retrieve them.
User-driven search proper dates only from the launch of Yahoo!, a directory of websites, in 1994. Yahoo might have been the first search engine, but in algorithmic terms, it was also closer to a directory. The fundamental technological revolution came with the foundation of Google by Larry Page and Sergey Brin in 1998. PageRank, the algorithm powering Google, set the standard for what constituted a search engine.
The Emergence of Paid Search Advertising
The real game-changer came with the advent of paid search advertising in the 1998-1999 breakout launch cycle of the late 1990s. Paid search began as a way for businesses to purchase ad space in search results, bidding on keywords to pay for ad placement. The first of these services, GoTo.com, came online in 1998; it later became Overture Services, Inc. In 1998, Overture launched the first PPC (pay-per-click) advertising model. The premise was simple: as an advertiser, you could bid on a keyword, and if your bid were high enough, your ad would appear next to search results. You only paid if a user clicked on your ad using a pay-per-click mechanism (PPC).
The Development of SEM: 2000s to Early 2010s
Google’s Dominance and the Rise of AdWords
In 2000, Google introduced AdWords (now Google Ads), which enabled businesses of all sizes to create text-based ads and bid on keywords that people use when searching in Google search and others, as their ads showed up on the search results page when their ads were triggered. Google’s PPC (pay-per-click) model ensured that only actual clicks were paid, making it a cost-effective marketing strategy.
AdWords gave SEM a whole new set of advanced targeting options (e.g., location and language) and sophisticated analytics for tracking campaign performance. And the rest was history—Google soon became a massive success and ruled the search ad market, thanks to its AdWords system, which currently has a 97 percent market share of search advertising.
Evolution of SEO Practices
SEO moved further down the rabbit hole along with search technology. White-hat SEO techniques such as keyword-rich content, on-page optimization, and backlinking emerged as professional SEO services in the early 2000s, while black-hat practices such as keyword stuffing and link-farming were increasingly punished by search engines (notably not Google).
Subsequent gradual modifications to Google’s algorithm, mainly the Florida update (2003) and the introduction of the Google Webmaster Guidelines led to a higher emphasis on ‘white-hat’ SEO, which ensured users received quality search results and not those gained through ‘gaming’ the system.
Expansion of Paid Search Advertising
The success of Google AdWords prompted other search engines to follow Google’s suit. Yahoo! launched its Sponsored Search program in 2001, while Microsoft launched Bing Ads (originally MSN adCenter) in 2006. This helped advertisers reach their intended audiences through more paid-search advertising choices.
Competition between search engines created innovation regarding ad formats and targeting options: advertisers could choose between text, display, and video ads and target audiences demographically and behaviorally.
The Maturation of SEM: Mid-2010s to Present
Algorithm Updates and the Focus on User Experience
The mid-2010s saw a surge in algorithm updates, primarily driven by a desire to deliver the best user experience. Google’s major algorithm updates, such as Panda (2011), Penguin (2012), and Hummingbird (2013), worked to positively affect the quality of search results by demoting poor-quality content and elevating high-quality, relevant content.
The Panda update penalized thin and duplicate content, and the Penguin update penalized sites with unnatural backlink profiles. At the same time, Hummingbird introduced a more nuanced understanding of queries, emphasizing semantic search and natural usage.
The Rise of Mobile Search and Local SEO
For the first time (in 2015), people ran more searches on mobile devices than on desktops, and search engines responded by giving preference to websites that rendered well on mobile devices.
SEO industry professionals coined the term Mobilegeddon to refer to a Google algorithm change introduced in late 2015 that penalized sites that did not work well for mobile users. If mobile users could not zoom in to read or wait long for a site to load, they would lose interest and give up. Website owners realized that they needed to design web pages in a way that looked good and scaled well to any size screen.
Mobile users searching for nearby businesses and services further promoted local SEO. By 2014, Google My Business offered a way for enterprises to be found locally with the help of a listing where one could manage one’s own ‘Google knowledge panel,’ as it was termed, which appeared on mobile search results. This feature included Google Maps integration and star ratings based on customer reviews.
Advancements in PPC Advertising
Further advancements in SEM came with the maturity of PPC advertising. Google AdWords (renamed to Google Ads in 2018) made strides in creating various new ad formats and specifications that helped improve campaign performance. For example, responsive search ads, launched in 2018, allowed advertisers to create multiple ad headlines and descriptions, with Google testing the combinations to see what works best.
Machine learning and artificial intelligence (AI) made PPC a successful advertising technique. Campaigns could use so-called ‘smart bidding’ strategies, which use machine learning to throttle bids in real-time.
Strategies often centered around maximizing performance by seeking the highest conversions at a specific daily cost, brand exposure, or ROI figure. Other strategies revolved around advertisers bidding to ensure they hit their targeted ROAS or cost per acquisition (CPA) by pushing for higher bids, in the knowledge that their machine learning algorithms would throttle back should campaigns get too expensive.
Furthermore, more complex targeting capabilities were introduced, where decisions such as who to target could be based on audience characteristics, interests, and behaviors gleaned from user data.
