How Search Engine Marketing Works
Each type of listing — organic and paid — has a type of marketing approach associated with it.
Search engine optimization
Search engine optimization (SEO) involves building new websites, or changing existing websites, so that they rank highly in a search engine’s organic listings when users search on terms that are related to the site’s content. To learn about SEO for Google organic search results, visit Google’s Webmaster Central site.
Search engine marketing
Search engine marketing (SEM) is the process of promoting and marketing a website through paid listings (advertisements) on search engines.
In order to create an ad for a given search engine, you need to create an account with the advertising product or branch of that search engine. For Google, this product is AdWords. After creating an account, you then create your ad and enter a list of user search queries — called “keywords” — that can trigger your ad to be shown.
Ads on most search engines operate on a pay-per-click (PPC) model, meaning that you pay only when a user clicks your ad, and not for the ad impression (the instance in which the ad appears on the page). The other common pricing model in online advertising is cost-per-thousand impressions (CPM), in which you pay per impression, not for any clicks on your ad.
Site owners often choose to advertise their site instead of, or in addition to, optimizing their site for placement in the organic search results. Although it’s necessary to pay for the clicks your ads receive, advertising allows you to be proactive about when and where a listing for your site appears. Creating an AdWords account takes minutes, and ads can run almost immediately in response to keywords that you choose.
Article courtesy of Google ( https://adwords.google.com/support/aw/bin/static.py?hl=en&guide=23303&page=guide.cs )