SEO vs SEM – A Business Owner’s Perspective

SEO and SEM are two distinct marketing techniques businesses can use to reach their target markets on search engines such as Google and Bing. What is the difference, and which one should you use?

Before starting, I’d like to establish some credentials. I am not just a desktop warrior writing about this after online research. Neither am I a professional marketing consultant.

I am a practitioner, using these strategies to build 7-figure, profitable businesses distributing products all over the world. Nowadays, I outsource much of the work to professional marketing agencies to handle the nuts and bolts of the SEO and SEM marketing campaigns, but I still make the important strategic and tactical decisions.

So in this article, I will share with you my thoughts from a business owner‘s viewpoint.

SEO and SEM are marketing terms that are often used interchangeably, but many are confused about what they mean. Let’s start by defining them.

What are SEO and SEM?

Search Engine Optimization (SEO), and Search Engine Marketing (SEM) are both strategies for getting your website to appear on search engine results pages (SERPs). They both have the same objective, which is to generate traffic to your website that you can hopefully convert into revenue.

The difference is, that while the traffic from SEO is free, for SEM it is paid. Thus, SEM costs money but SEO does not. Take, for example, the results below when I search “poster printing” on Google.

The listings that appear first at the top are always paid listings. Sometimes they appear at the side as well. You can tell these are paid advertisements because they have the “Ad” disclaimer beside the listing title. SEM is what you do to get your paid ads to appear when people search for your target keyword(s).

Below the red line, you’ll find listings that don’t have the “Ad” disclaimer. These are the organic listings. SEO is what you do to get your website listed as high up as possible among the organic listings, for the keyword(s) that you target. In the SEO world, the #1 organic listing is prime real estate, because that’s what gets the most traffic, and all of it is FREE!

Is SEO or SEM Better?

You might say, “Of course, SEO is better! It is free! And everybody loves free things!”

Well, yes and no.

SEO is never a bad thing to have. But while it doesn’t cost money, it costs time. Getting results and get your website ranked on the front page organically takes time and effort.

SEO has 2 parts:

a) On-page SEO
b) Off-page SEO

On-page SEO is a little technical, but still very doable for people who do it yourself (DIY) and build their own websites. FYI, I may be doing 7-figure sales, but I still build my own websites despite having zero coding background.

In other words, it’s not that hard and doesn’t require a lot of work. It’s all a matter of knowing what to tweak and requires only a one-time effort upfront when you build the website.

Off-page SEO is the process of building inbound links to your website. It’s not just quantity, it’s more about relevance and the page authority (in other words, “reputation”) of the other site linking to you. Social media activity is also an important part of off-page SEO because your constant posts with backlinks to your website also help to improve your search engine ranking.

Thus, off-page SEO, while technically less difficult than on-page SEO, requires more time as you need to do it consistently until you rank on the front page of Google organically. And even after you rank, it’s still important to sustain the effort to prevent competitors from catching up.

Once you rank on page one (especially at the #1 spot), you should be in a great position to monetize your website. You have reached marketing nirvana because your marketing cost is $0.

But this takes time, depending on how competitive the market is for your chosen keyword(s). I have taken as short as 2 weeks to rank on the front page of Google, but have also taken many months.

As for SEM, you need to pay each time someone clicks on your advertisement. That’s why these are called Pay-Per-Click (PPC) ads.

SEM, while possibly expensive, has the advantage of being quick to deliver results. Once you set up the campaigns, the ads can start running within 24-48 hours (if it’s a new Google account) or less (for existing accounts).

However, because you need to pay for the traffic, you also need to start worrying about metrics such as Return-on-Ad-Spend (ROAS). How much revenue are you generating per dollar of ad spend?

If your profit margin is 50%, then you need to generate at least $2.00 of revenue for every dollar of ad spend in order to break even. In other words, if your ROAS is less than 2, you’re bleeding cash and it’s better to turn off the ad campaign.

Do note, however, that paid ad campaigns take time to optimize. The artificial intelligence (AI) in charge of delivering your ads to potential customers needs time to learn which are the best ads to serve to the right customers in order to best meet your campaign objectives (e.g. maximize conversions? or minimize cost per click?). So it’s best to give it a month or two before deciding to terminate the campaign.

Should I use SEO or SEM?

Ideally, you should use both.

SEO is never a bad thing to have. And if your SEM ad campaigns are performing at a ROAS above your break-even point, then you should continue with them.

However, the reality is that you have to balance what you want against the level of resources you want to commit to the project.

On-page SEO is something I do, ALWAYS. I have gotten ranked before on Google for some keywords by doing just on-page SEO and ignoring off-page SEO. So this is something that’s easy to do, doesn’t require a lot of time, but has the potential to generate free traffic.

As for the next step, it depends.

My B2C distribution business in Singapore was established using SEO at first. I had more time than I had money, so I did both on-page and off-page SEO.

Once the business proved to be viable, I started doing SEM as well, which added about 40% to my website traffic. I have continued ever since as ROAS was always above the break-even point.

When I wanted to break into the USA market, I decided not to use SEO as my primary strategy. The market there was simply too competitive, and it may have taken me more than a year to get ranked organically and gain any meaningful traffic.

I wanted quick results. And by then, I was very busy with my Singapore business, so I had more money than I had time. So I used SEM as my primary strategy.

Of course, I never ignored my on-page SEO. Now, after 3 years, I realize that for certain keywords, I am already ranking on page 2 of Google in the USA search results, despite neglecting my off-page SEO almost completely. So with a little bit more work on off-page SEO, I can probably push my website onto the first page.

Thus, in Singapore, I used SEO first before doing SEM. But in the USA, I did the reverse, and SEM was used before SEO.

Should I DIY or Outsource SEO / SEM?

That really depends on your own personal situation and comfort level. Generally, there are 3 factors to consider.

1. Time
2. Money
3. Technical Difficulty

If you have a lot of time and you’re willing to invest it to learn the ropes of SEO and SEM, then, by all means, go ahead! Especially if you are new in this space, getting your hands dirty and doing the work will help a lot with your knowledge.

If you have no money, then outsourcing isn’t even an option. Hiring professionals cost several hundred USD a month, or even more than a thousand (if you outsource both SEO and SEM).

While there are cheap options on Fiverr.com, I would caution against using them, especially those that offer to build hundreds of backlinks for you at a low cost. They may be using link farms which don’t do anything to help your SEO because Google regards them as irrelevant.

The third is technical difficulty and how comfortable you are with it. If you’re already quite comfortable building your own websites, then on-page SEO is not a big leap for you in terms of knowledge level.

Off-page SEO requires even less technical knowledge because most of the time you are just posting stuff on your social media and online forums or directories with a backlink to your website.

As for SEM, there’s the express version of Google Ads which is simple to use, and doesn’t require much technical knowledge. However, it is not as powerful and customizable as the full version, which is much more complicated.

In the full version, you need to link with Google Analytics, set up tags, and create conversion events. There are different types of ads, different types of campaigns, and different types of extensions.

It’s a problem for a non-techie like me to understand and properly execute everything. Personally, I find using the full version of Google Ads technically even more challenging than SEO. So I typically outsource my SEM, letting the consultants do time-consuming grunt work while I just manage key metrics such as ROAS and tell them what to do.

But for someone who is completely uncomfortable with tech and doesn’t even want to know how to build a website, then outsourcing the whole gamut, including website building, is the way to go.

However, even if you outsource SEO/SEM to marketing professionals, you should still understand what is going on.

Firstly, your marketing company’s objectives may not be aligned with your business objectives. The marketing company will understandably want to maximize its revenue and sell the most expensive packages to you, which may not be what you need at that point in time.

Secondly, don’t assume that the marketing company knows best. Yes, they are experts when it comes to SEO/SEM, but you are the expert in your own industry. You need to marry both knowledge pools in order to generate the best results for your business.

For example, the marketing consultant may recommend “shoes” as the target keyword because it has the most number of searches per month.

However, while you may sell all types of shoes, most of your profit is made from leather shoes. So you may get a much better return on investment (ROI) by targeting a narrower market with “leather shoes” as the keyword.

But this is something your consultant will not know, so the onus is on you to tell them that so that they can improve your campaign targeting.

In Conclusion

Since this blog is written for the young entrepreneur and small business owner in mind, I’m going to assume you don’t have a lot of money to spare.

Basic on-page SEO is something foundational that you should ALWAYS do. It really doesn’t need much effort, once you know what to do. But it can potentially be very profitable.

As for off-page SEO, you can start by doing it yourself. When business gets better and you have more money than time, you can consider outsourcing it.

And lastly, for SEM, you should also do it if you can get a healthy ROAS. But if you are just starting out and have more time than you have money, then perhaps try SEO first and become profitable before you invest part of your earnings into SEM.