SEM

What is SEM, SEO, PPC and CRO, and why does it matter?

Several acronyms have emerged in recent years so it can be easy to get lost in all these letters and definitions, especially as they constantly evolve over time. You probably see these different acronyms regularly on the internet today. First, it is important to note that SEM, SEO, PPC and the CRO have a common goal: obtaining visibility, and therefore traffic, to a website. We find this common point at the first letter of some of these acronyms-S, which means Search, and therefore visibility of websites on search engines and social networks. Let’s look quickly at these 4 elements to enlighten you on their meanings and importance.

SEM

The SEM (for Search Engine Marketing – Marketing on Search Engines) is an umbrella term considering all techniques to improve the visibility of an entity, site, company or person, on the search engines. Therefore, SEM is a combination of marketing techniques and not a marketing technique per se. The SEM, therefore, includes SEO, PPC and SMO (Social Media Optimization) and all other techniques to optimize the SEO of a website on search engines and its visibility on social networks.

 

SEO

SEO (Search Engine Optimization), briefly said, represents the set of techniques for a website whose aim is, above all, to ensure your visibility. In general ”content is a king’’, which means that your website marketing should be based on a strong foundation of good content. Good content is often not enough, and  you can optimize it to “seduce” the algorithms of search engines like Google, Yahoo, Bing, etc…

The point of an SEO campaign is to optimize content utilizing a variety of target keywords to enhance your visibility in search engine search. The goal is to achieve the highest ranking possible for the website in the organic results of search engines. Meaningful gains can be slow, but long term a high organic search visibility is the most effective and cheapest means of advertisement. A good SEO campaign will not only optimize your content for your top keywords, but it will also include a search trend analysis and see if there are any low competition high search keywords that you did not realize.

SEM

PPC

PPC (Pay Per Click) is another web marketing technique, and it is part of SEA (Search Engine Advertising). The principle is simple, your advertisement is displayed on a site, a search engine, a directory, etc, and every time a user clicks on your ad, it costs you money. The best known is Google AdWords, but there are also Google Shopping, Bing Ads, Facebook ads, and all other private advertising agencies. CPC (cost per click) is typically used to estimate the average cost of a click during a PPC campaign. The alternative to PPC is CPM (cost per thousand impressions, or times someone views your ad) where you pay for ad views, which is harder budget for.

The profitability of the PPC

The profitability of the PPC is measured by the conversion rate, a conversion that can be a call, an email, newsletter signup, a sale, etc.

The advantage of the PPC is that you only pay if your ad triggers a click, you control your budget. And it’s instantaneous, as soon as you put the ad online, it generates visits and therefore potential conversions. With the ideal PPC setup, you should have visibility of not only how many sales you got, but the revenue from those sales. When set up right, you can establish an accurate CPA (cost per acquisition) for incoming customers and know how much a buying customer costs. As long as your profit is higher than your CPA, you can comfortably scale up to your market size. As a long term bonus, often times customers gained with PPC come back later as direct return customers.

The disadvantage is that your site is only visible if you pay. The day or you stop paying your ad disappears. Most pay-per-click ads are based on an auction system. CPC, therefore, tends to increase regularly, which requires you to either increase your budget or be less visible.

SEM

CRO

CRO (Conversion Rate Optimization) is a process of creating an experience for visitors to your website that will convert them into customers.

Conversions occur at various places on your site: on the home page, rates page, your blog and, of course, landing pages. You can optimize all these conversion funneland that’s the conversion rate optimization, or CRO. Conversion rates on a properly set up site may range between 0.5-6%. Small increases in CRO rates can lead to large increases in sales.  Let’s take an example ecommerce site with $20,000 in monthly revenue that normally has a CRO rate of 1.4%. Increasing this CRO to 1.7% would increase the monthly revenue by $4,200 with the same number of visitors.

CRO often refers to the optimization of website landing pages and the sales funnel. Often times simple changes like changing the page layout can make it easier for your visitors to find your sales pages. You can implement more advanced changes can  to optimize the path between initial funnel and sales and reduce visitor drop off.

What is a good conversion rate?

We can define CRO either in terms of lead generation rates (typical of services websites), or in closed sales (typical of E-commerce websites).

When a site reaches 6% conversions, that is, 6 leads qualified for 100 unique visitors, and we can consider this site as effective. With such a ratio, to generate 3000 leads per month, a website must obtain at least 50000 unique monthly visitors. At 10% of CR, a website is very efficient, it generates 10 qualified requests for 100 visitors.

Keep in mind that work on the conversion rate optimization is an ongoing process since visitors behavior and optimization tactics are changing every day. Along with the rest of the marketing methods, you should adopt it and implement on a daily basis.