SEO vs. SEM: Which is Better for Australian Businesses?

Search Engine Optimisation and Search Engine Marketing both show your marketing messages on search engines like Google. 

The difference is that SEO gets you on Search pages for free. With SEM, you have to pay a search engine to place you.

On this page, we’ll take a deep dive into how each strategy works. We’ll explain what SEO and SEM are, how they’re different, and when each is appropriate for your business.

What is SEO?

SEO is a marketing strategy that increases visibility in search engines like Google and sends organic traffic to your website. Although Facebook, Instagram, and other social media platforms have their own search engines, “SEO” mainly refers to optimizing for Google. 

The 3 components of SEO are…

1. Technical SEO

Technical SEO refers to things like page load speed, website structure, etc. Google wants to see that your website is easy and pleasant for their users to view – fast to load, easy to navigate, with a pleasant UX/UI design.

Google is in the business of giving people the best possible results for their search queries. This includes giving searchers web pages that are easy to use and pleasing to the eye.

If your website isn’t easy to use, visitors will bounce quickly, which is a signal to Google that your site should not rank well.

To improve your technical SEO, work on things like:

2. On-Page SEO

The primary focus of on-page SEO is providing users with content that is relevant, helpful, and addresses keywords and phrases people look for. It includes keyword research, pillar content creation, then more content production and optimisation.

Google recently announced their “Helpful Content” update. In this announcement, they emphasised that pages with the most helpful, authoritative, relevant content would be prioritised in the SERPs. 

In terms of on-page SEO, it means that your primary focus should always be creating content for people, not just search engines.

To improve your on-page SEO, focus on:

3. Off-page SEO

Off-page SEO is the process of creating various signals on the internet that your content should be included in search results. This includes things like backlinks, PR mentions, social signals, and more.

Out of all these factors, backlinks are the primary differentiator. When websites link to you, these links act as votes of confidence telling Google other people trust you – and helping you get more traffic.

SEO in Australia

As of August, 2022, Google owned a whopping 93.25% of the search engine market share in Australia. Microsoft Bing has captured 4.86% of the market share, while Yahoo! and DuckDuckGo have managed to capture 0.79%.

Globally, 92% of all searches are for long-tail keywords. 14% of all searches are questions, and users are 4x more likely to click on a Google advertisement than any other search engine. Additionally, more than 50% of all searches end without the user clicking.

What is SEM?

SEM stands for “Search Engine Marketing”, and encompasses both SEO and Pay-Per-Click advertising. Usually, however, when people talk about SEM they’re referring to just PPC.

PPC is a form of paid advertising that allows you to place ads on search engine results pages. Google ads is a prime example of PPC advertising. 

These ads are usually in the form of text, and will appear above or below organic search results. When someone clicks on your ad, you pay the agreed-upon amount to the search engine.

There are a number of key elements in SEM:

Bidding

To have your Google ads placed, you bid on relevant keywords. The amount of your bid compared to other advertisers’ bids will determine where your ad is placed on the page. The higher your bid, the more likely your ad will be shown.

Optimisation

Once you have ad campaigns running, you’ll need to optimise them for maximum effectiveness. This includes things like testing different ad copy, tweaking your bids, and making sure your ads are being shown to the right people.

Measurement

You need to be able to measure the results of your SEM campaigns to determine whether or not they’re effective. This includes things like tracking clicks, conversions, and ROI. You can’t optimise your campaigns without tracking them, so this is a key element.

Revising creative materials

Unlike SEO content, which is mostly hands-off once you produce it, SEM ad copy and bidding strategy need constant revisions. This can be time-consuming, but it’s necessary to ensure that your campaigns are effective.

SEM in Australia

SEM costs in Australia are relatively high because the population is small and competition for customers is high.

Some of the most expensive keyword groups (keywords related to a specific topic) in Australia are:

1. Lawyers – Avg. CPC of $46.25

2. Workers comp – Avg. CPC of $23.14

3. Insurance – Avg. CPC of $22.62

4. Health and fitness – Avg. CPC of $20.81

5. Business software – Avg. CPC of $20.36

This means that if you want to be successful with SEM in Australia, you need to be prepared to spend more money than you would in other countries. You’ll also need to be very strategic with your targeting, as you’ll be competing with a lot of other businesses for a limited number of customers.

SEO: Pros and Cons

Pro: Compounding Results

Investing in SEO is sort of like investing in stocks or mutual funds. When you do it correctly, the results compound and accrue over time.

For example, if you write 3 blog posts per week and each post generates 100 organic visits per month after 6 months, you’ll have generated 100x3x6 = 1,800 visits from that content. if you keep writing blog posts (and promoting them), those 1,800 monthly visits might become 2,700, then 4,000, then 8,000 and so on.

The longer you do SEO, the better your results will be.

Pro: SEO Scales Well

Unlike many marketing strategies, SEO scales very well. Provided you cast a wide net with the topics you address, you can reach millions of people. For example, Forbes has 65 million monthly website visits; Hubspot, the software provider, has 1.6 million readers. These people are potential customers!

Pro: Target Every Stage of the Customer Journey

SEO helps you reach people across all stages of the customer journey. You can target keywords that have a high purchase intent, like “best shoes for Australian outback”, as well as top-of-the-funnel, informational keywords, like “how to file taxes in Australia”. With the first keyword, you’re targeting people who are highly likely to purchase from you. With the second keyword, you’re targeting those who are in the research stage of the customer journey. By providing them with helpful information you make it more likely that they will convert to a lead and then potential customer.

Con: SEO Takes Time

SEO is a long game. Content usually takes 6-9 months to mature and start generating organic search traffic. Backlinks take 3-6 months to mature before they begin to make a significant difference in search results.

If you want to win the SEO game, you need to be in it for the long haul. If you go into expecting quick results, you’re likely to be disappointed.

SEM: Pros and cons

Pro: Immediate Results

Once you have your campaigns up and running, you can start to see traffic coming to your site almost immediately. This is in contrast to SEO, where it can take months before your site starts appearing high in the search rankings.

Pro: More Control

With SEO, you’re at the discretion of search engine algorithms when it comes to where your content appears. With SEM, you can choose which search engine results pages your Google ads will appear on.

Con: Results Don’t Stick

 This is not the case with SEO, which can provide long-term results even after you stop working on it.

Con: High Costs

Another downside to search ads is that they can be expensive. If you’re not careful with your bidding strategy, you could end up spending a lot of money very quickly. This is why it’s important to track your campaigns closely and make sure you’re not overspending.

Additionally, SEM doesn’t scale as well as SEO does. If you target low-intent, top-of-the-funnel keywords like “how to file taxes in Australia”, you’ll probably get a fair amount of traffic but people aren’t nearly as ready to buy.

You can cut costs with PPC analysis tools, but only so much. 

SEM vs. Paid social

There is a significant difference between the SEM ads you see in the search results and ads you see in your social media feed. Paid social ads target interests rather than intent. You target broader, top- and middle-of-the-funnel audiences who are more generally interested in what you offer (note: this doesn’t include retargeting ads, which are much more specific).

With paid SEM, you’re targeting intent more than interests. If someone searches for how to file their taxes, it signals that their intent is to eventually file their taxes. You can provide them with helpful content that leads through the customer journey and ultimately to the point of purchasing from you.

SEO vs. SEM: How long until you see results?

One significant difference between SEO and SEM is how quickly you see results.

SEM produces results relatively quickly. You can have an ad campaign up and running within a day or less. SEO takes a much longer time before you see results. A campaign can take over 12 months until it starts bringing in results. Backlinks mature over 6 months, and it can be 12 months before content starts producing results.

SEM requires less effort and creates immediate results. However, it has a lower ROI over the long run because ad costs eat into your margin. Also, SEM has diminishing returns and doesn’t scale indefinitely, meaning that eventually putting more money into ad campaigns won’t produce meaningful results.

SEO requires more effort from you and takes significantly longer to see results, but it produces a much greater ROI over the long run. SEO demands a lot of front loading. You need to get a “critical mass” in both content and backlinks (think 50+ content pages and dozens of backlinks) to get results. However, once you have momentum you’ll start to see greater results faster and faster.

Both SEM and SEO come with risks. With SEM, it’s easy to be deceived by vanity metrics, even though they don’t always result in money. For example, your CPC can be low but conversions can also be low. Figuring out what you’re doing can cost you in time and dollars.

SEO can be very tricky to get right, with many potential pitfalls. For example, backlinks can actually hurt you depending on their nature. Additionally, content that you spent hours creating might not rank if you don’t know what you’re doing. The combination of producing authoritative content AND getting quality backlinks is very difficult. You can end up investing lots of money without seeing results. However, with the risk comes the high upside of long term ROI that keeps producing organic traffic long after you’ve created a piece of content.

SEO vs SEM: What is the cost difference?

Cost is another of the key differences between SEO and SEM. With SEM, the primary focus is getting immediate results. However, you have to pay more up front to see those results. Your investment doesn’t have to be high. You can start with as little as $15-20 a day and start getting leads and sales that quickly produce a profit. The double-edged sword with SEM is that you get what you pay for. Smaller investment leads to smaller results.

With SEO, the focus is on getting higher, long term results. You have to invest more time and effort up front and you see those higher results further down the road than you do with SEM. It can take months of spending $1,000+ to start getting results. However, the upside is that results from SEO can be worth thousands of dollars per month in traffic once SEO starts working for you.

Keywords and Search Intent

Before you can decide whether you want to focus on SEO or SEM, you need to understand the way that specific keywords and search intent align with each other. Top of the funnel (TOFU) keywords generally have a lower purchase intent than middle- or bottom-of-the-funnel keywords. In other words, people using TOFU keywords are usually near the beginning of the customer journey. Those further along in the customer journey are more likely to use MOFU and BOFU keywords.

Here are some examples of the difference in keywords between the top, middle, and bottom-of-the-funnel keywords.

TOFU / Low intent – How to get more ecommerce sales

MOFU – SEO vs. SEM for service businesses

BOFU / High intent – Megaphone marketing

SEM marketing tends to be most effective when targeting bottom-of-the-funnel, high intent keywords, while SEO allows you to target all three parts of the marketing funnel.

In Summary

SEO and SEM both work in Australia. 

SEO gets you long-term results that scale well. It also takes a lot of frontloading; you have to invest time and money before seeing a return on SEO spend.  

A major benefit of SEO is that it helps reach customers across the whole customer journey; not just the bottom of the funnel. 

SEM works immediately but doesn’t scale quite as well. It gets progressively more expensive and stops working the minute you start paying. 

On the flip side, SEM can help you make money and grow your business immediately. It’s a good choice when you want to bring in new business quickly. 

FAQ

When should you focus on SEO?

You should focus on SEO when:

When should you focus on PPC?

You should focus on PPC when:

When should you combine them (SEM)?

You should combine SEO and SEM when:

Both SEM and SEO are essential digital marketing strategies that have the potential to grow your brand, build new audiences, and generate more sales. Your industry, type of business, marketing goals, and other factors dictate which strategy is better for you. The key is to understand which one will work better for you in the short-term and long-term and invest accordingly.