How is SEO Different From SEM?

Search Engine Marketing (SEM) involves any method of marketing through one or more search engines (such as Google or Yahoo). The three most common methods of SEM are Search Engine Optimization (SEO), Link Development, and Pay-Per-Click Advertising (PPC). PPC involves bidding with other businesses for ad placement typically in the "Sponsored Results" area of the search results page.

Pay-Per-Click Advertising in my opinion is too costly with too little ROI to make the investment worth the cost. Of course, you may have different results than I have had. My experience has shown that most people using search engines do so specifically for information, not to make a purchase. So you're basically paying for PPC assuming that your site will intice many non-impulse searchers to buy. With PPC, you also have to worry about something called "click fraud", which is a topic all of its own. The above doesn't directly relate to the question what is SEO, but it can indirectly affect your campaign budget.

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SEO beats PPC in organic search queries because many users ignore the "Sponsored Results". However, SEO loses to PPC when Google AdSense subscribers install Google's "Content for Search" code on their websites. In other words, sponsored search results appear on several thousand independent websites outside of the Google websphere.

Link Development is also an SEM strategy because it involves working outside of the website being marketed, ultimately to improve the number of incoming hyperlinks. Many search engines (including Google), weigh the number of quality incoming links as a determining factor for positioning in the search results. Good incoming links are a commodity these days. SEO experts and website owners are beginning to understand and capitalize on having high PageRank by selling outgoing links from their websites. No more link to me and I'll link to you, those days are over thanks to search engines like Google. What is SEO in terms of link development? Expensive.