SEM / PPC Advantages are: 

  1. Can be number one within hours of opening a SEM account if you are willing to bid for that top spot. 
  2. Pick specific keyword phrases: 
  3. Can customize the web site’s ads with a specific title and description for each keyword phrase. 
  4. Test market a product or service or do a short term online promotion without waiting for a search engine to index the new product or service. 
  5. Many users will click on paid listings because they trust that a web site that is willing to pay for their business may be more legitimate and have more to offer. 
  6. Create specific landing pages for specific keywords. 
  7. No web site optimization needed? Yahoo and MSN do not require landing pages or the web site to be optimized. As of summer 2006, Google began using a new spider to check the quality and content of landing pages and match the keywords with those landing pages. Web sites that are optimized for the products or services that they are bidding on will be receiving a better price per click than a web site that is not optimized. So an advertiser could be number one and pay less per click than number 3 simply because the web site is better optimized. 
SEM / PPC Disadvantages are: 
  1. PPC can be very costly. Some advertisers are willing to pay as much as $100 per click or more for some keyword phrases. 
  2. PPC is a bid process so the company with deeper pockets can afford more phrases and can drive competition from the top spots 
  3. May require daily management to remain competitive and to make sure that your site is staying in the position you want. 
  4. Possible click spamming can occur where companies hire people to click on web sites to waste competitor’s money and drive up click values. Some PPC providers are attempting to stop this practice but in reality it is hard to stop click spamming. Google has settled a class action lawsuit for $90 million dollars and Yahoo is currently under fire for click fraud. 
  5. As much as 75% percent of search engines users will not click on PPC ads instead on trusting the organic results. This is just an average figure. Some markets enjoy a higher percentage of PPC users than other markets. (Search engine users tend to trust the PPC results for the real estate industry with this industry enjoying a PPC click thru rate of 40% in some markets). 
  6. As may as 85% of the clicks may never spend more that 5 seconds on your landing page which means that 85% of the clicks are wasted. 

Since SEM advertising is growing the value of search engines and it is one of the top areas of profitability for search engines, SEM advertising will not be going away anytime soon but instead will continue to be a dominating factor for the major search engines. Since Internet users are becoming more educated and understand that SEM advertising can provide exactly what they may be looking for savvy Internet users will click on SEM results. Some research has shown that 25% of Internet users will click on a paid ad. SEM can be good or bad and the results of your campaign is based on how well it is managed and how much money you are willing to spend.