Small Business Guides Small Business Marketing Search Engine Marketing Definition FAQ

What is Search Engine Marketing (SEM)?

March 7, 20171 min read

Search Engine Marketing is a marketing tool which allows advertisers to appear higher in search rankings. As opposed to Search Engine Optimization (SEO), SEM relies on paid advertisements, rather than organic reach, to push a link to the top of the search results. SEM is a numbers game, and it can be a difficult one to play for many business owners. A main component of SEM is pay-per-click (PPC) advertising, which is usually done on search engines like Google, Bing and Yahoo, where an advertiser bids on keywords to appear higher in search results and then pays for each click. Due to the numerous technical challenges, SEM can be a time-consuming activity and if done incorrectly can be a major drain of time and resources. Examples of the types of clients which often see success with this digital marketing tool: clients which offer promotions or offers often benefit from this product

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Explore a website growth scenario

Change the assumptions to see how traffic and inquiries affect the estimated lifetime revenue of customers acquired in one month. The starting values are examples. This calculator does not measure lost revenue or predict what a redesign will achieve.

Monthly website visitors

Use the same monthly period for visitors and leads.

Monthly website leads

Use distinct inquiries attributable to those visitors.

Leads that qualify (%)

Your own estimate of the share that fits your business.

Qualified leads that become customers (%)

Use your observed rate or label it as an assumption.

Lifetime revenue per customer ($)

Revenue across the customer relationship, before costs.

Assumed change in traffic (%)

A scenario you choose, not a prediction from Stoute.

Assumed conversion change (percentage points)

For example, adding 1 point changes a 2% conversion rate to 3%.

One month’s acquired customers

Customers under current assumptions: 3.0
Customers in your scenario: 3.0
Current cohort’s estimated lifetime revenue: $3,000
Scenario cohort’s estimated lifetime revenue: $3,000
Difference across those customers’ lifetimes: $0

Visitor-to-lead rate: 2.0% → 2.0%. Scenario conversion is limited to 0–100%. Fractional customers represent an average, not a literal customer count.

These amounts are gross lifetime revenue, not monthly cash flow, profit, or return on investment. The model holds qualification, close rate, and customer value constant. It excludes project costs, advertising, delivery costs, and payment timing.

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