Search engine marketing (SEM), sometimes referred to as paid search marketing or paid placement advertising, consists of a variety of different Internet advertising pay models. The goal is the same for all of these different forms of search engine marketing (SEM): to increase the visibility of your website on the major search engines. The following are some of the more popular examples of search engine marketing (SEM) that are available today to advertisers.

Pay-Per-Click (PPC) The most popular and widely used model for search engine marketing (SEM). A variation of this model is called Pay-Per-Call (a similar acronym but a different name). The primary difference is that the advertiser is only charged for each phone call (tracked from a special phone number that is set up) rather than the more common pay model whenever someone clicks on the advertisers paid ad. Usually pay-per-call ad campaigns are more costly than traditional pay-per-click ad campaigns. But, these pay-per-call ad campaigns can sometimes result in higher conversion rates depending on the exact nature of the advertiser's business.

Cost-Per-Impression (CPI) or Cost-Per-Thousand-Impressions (CPM) was originally created for traditional offline advertising like print, TV or radio and the “M” in CPM stood for millions, not thousands as it does with online advertising. When online advertising first started, the same pay model was adopted from traditional offline advertising. This original CPM advertising pay model is still in use today, especially with the different yellow page related sites or local advertising companies.

For a better understanding of the CPM price model, let’s look at an example using a $5.00 CPM advertising pay rate. For every 1,000 times your ad appears on a CPM publisher's website, you would be charged $5.00 until you used up your entire CPM budget that you had purchased in advance.

Cost-Per-Action (CPA) or Pay-Per-Action (PPA) model is based on a specific action having to occur before you get charged. This would be the opposite of the previous CPM example which uses an estimation of how many people viewed your ad and no user action has to take place for you to be charged. One of the most commons examples of cost-per-action (CPA) is advertising that paid for based upon a product sale or a form being filled out for a customer registration or lead generation.

Contextual Advertising also referred to as targeted advertising uses specialized software that can search for specific keywords that appear anywhere in the text of a website that automatically trigger a relevant ad to appear on the viewer's page. The most popular example (and for many people the most annoying) would be through the use of a pop-up ad.

Paid inclusion or the sponsored listings pay model is when an advertiser pays a set fee to a search engine company for their website to be included in their search engine results pages (SERP’s).  Sometimes the search engine company’s web crawler may visit the paid advertisers’ site more frequently too as part of the paid inclusion fee. Examples of paid inclusion would be paying a fee to have your website included in an online directory. Yahoo has traditionally been the biggest proponent of paid inclusion search engine marketing (SEM).