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Differences Between Search Engine Marketing (SEM) and Paid Ads on Social Media

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All businesses need a long-term growth strategy to remain competitive.

There are several ways that can help your business continue to grow and be profitable. One of the biggest struggles for small businesses is getting their brand discovered. Having an online presence, like a website helps, but many potential customers are still not familiar with your business. A great tool for businesses to grow their customers base and increase brand awareness is paid advertising. Investing in advertising gives your business the opportunity to be discovered by new prospective clients, which can ultimately lead to an increase in sales from both existing and new customers.

Deciding on the right type of advertising tool for your business can be challenging, the key is understanding your business’s needs. Here is a simple guide that covers two of the most common options available in order to help you choose the right advertising platform that will provide the most benefit your business:

Search Engine Marketing

Search engine marketing (SEM) or paid ads, refers to ads that show up whenever you are searching for a product or service online through a search engine like Google.

Paid Ads on Social Media

Social media paid ads are ads that show up on platforms like Instagram, Twitter and Facebook. Social media ad campaigns are not keyword driven, they utilize demographic and interest targeting to find potential customers for your business.

Both SEM and social media ads have their own set of potential benefits for your business, but it is important to understand what each of them offers in order to make an informed decision.

Understanding User Intent – Keyword Targeting (SEM) vs Interest Targeting (Paid Social)

One key difference between search ads and social ads is keyword targeting and interest targeting.


Keywords are search ads’ levers to drive success. Search ads are characterized for having a higher intent because users are actively searching for products and services on a daily basis. To conduct these online searches, people are using specific keywords in the search engines. For example: if someone types “dentist near me” and your search campaigns are targeting such keywords, then your ad will likely show up for them.

Two tools that can be used as a guide whenever choosing keywords for your ads are: Google Keyword Planner and SEM Rush.

Paid Ads on Social Media

Social media ad campaigns don’t utilize keywords, but rather target users based on interests that include topics that are part of an online user’s specific behaviours. Social media collects data on your behaviors to assign you a group of interests. For example: if a person uses social media to look up content related to books, that person is part of the “books” interest audience.

As mentioned before, social media ads are not classified as high intent because people might not be necessarily looking to purchase your specific product. For social media ads to be effective, advertisers have to find multiple interests that resonate with their target audience.

A great starting point is looking into each platform’s audience demographics, since it’s crucial for campaign success. Identifying which platform best suits your target audience is crucial for campaign success. Here is a general breakdown of the top four social media platform demographics.

  • Facebook: Some great examples of the best performing industries for this platform are: retail, e-commerce, real estate and the fitness and healthcare industry.
  • Instagram: Posting videos or images about your business, for example, a clothing store, allows you to showcase your item in a visually-forward format with specific benefits/descriptions like this one here.
  • Twitter: Twitter is a particularly fast paced platform and image ads are a great way to showcase what your business is up to. For example, an industrial company might benefit by posting a short animated image that shows a new product.
  • Tik Tok: Although the most recent platform, it has gained substantial momentum with Gen Z and beyond. Tik Tok is best for those businesses that can add relevant information about their product in a short video. For example: A jewelry store that shares its new arrivals or a coffee shop that shows what makes their drinks unique.

Placements/Ad Formats


The format for paid search ads is simple, most of the time it only includes text and the placement is the search engine used. There are additional ways in which you can enhance them. Google offers extensions that you can add to your ads, adding extensions to your ad improves click through rates, ad quality and decreases the cost per lead. Some of those relevant extensions to compliment your ads include:

  • Image extensions: This is a great tool that allows you to complement your ads with vivid visuals.
  • Site link extensions: Site link extensions take online users to other pages from your website (i.e store hours, FAQs section)
  • Price extensions: Show up to 8 options that people can view to see different options and prices
  • Promotion extensions: Allows you to highlight any sales or promotions your business is offering.
  • Call extensions: Add phone numbers to your ads.

This is an example of and ad without extensions:

example of search result ad without extensions

Here is how an ad with extensions would look like:

example of search result ad with extensions

This example of an ad shows the “Dresses” and “Cosmetics” sidelink extensions, that easily takes the online user to specific pages of the website. Something to consider is that ads with extensions take more real estate from the website. This allows them to be more visible and eye capturing in an attempt to increase the amount of clicks.

Paid Ads on Social Media

Social media ad campaigns tend to be more visual than search ads. All social media ad placements require some sort of visual creative. Some examples are: videos, carousels (a post that contains more than one photo or video), and shopping ads (an ad that includes detailed information about your product) among others. Given their appealing format, they have higher engagement and usually higher conversion rates, with video in particular having been shown to be the top performing format. When thinking about your ad creatives, try to use engaging images or videos, and use minimal text, like the ad below.


Cost Per Click (CPCs)

Cost Per Click, is the amount you pay for each click on your ads. CPCs vary depending on the platform.

Here is a CPC comparison between SEM and paid ads on social media:


For paid search ads, CPCs average is around US$2.69. These are a more expensive type of ad because the user intent is higher than that of social media ad campaigns, as online users are the ones actively searching for specific keywords. Nevertheless, there are ways in which you can reduce CPCs by leveraging the different keyword matches.

Paid Ads on Social Media

So, how much do social media ads cost? CPCs is approximately US$0.62. It is less expensive compared to SEM ads since the platform does a good job in showing your content to online users. However, it is important to keep in mind that not everyone that is a part of your targeting pool of people is guaranteed to become your customer. Meaning costs can add up without necessarily resulting in high conversion rates.

Conversion Rate (CVR)

Conversion rate refers to the percentage of users that completed a desired action on your site, this can be to purchase a product, download a brochure, submit a form, place an order or book an appointment.


Paid search ads have a conversion rate of approximately 2.35% which tends to be higher compared to social media ads as customer intent is higher. Online users know exactly what they want and they are searching for it. The goal of your advertisement is to persuade them that you have what they are looking for. If you find that your conversation rate is below what you’re hoping for you can work on improving the quality of your ad and consider adding in a landing page (the webpage where people end up after they click your ad).

Paid Ads on Social Media

Posting ads on social media tend to have lower conversion rates compared to SEM. With an estimated conversion rate of 0.71%, this is a lower percentage because you are trying to reach a pool of people that are not necessarily actively looking for you. You can improve this by testing different interests that resonate and align with your business. Moreover, improving the quality of your ad also enhances your strategy.


Making a decision can be overwhelming – in the end it all boils down to your goal, brand, the service/product you offer and where your target audience is.

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