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Search Engine Marketing (SEM) is one of the most effective online advertising channels which let companies efficiently acquire new and reactivate existing customers at low acquisition costs. In this chapter the authors briefly review the scientific literature on SEM with respect to managerial decision problems along the levers of SEM, mainly bid optimization, keyword selection, and adCopy creation. Based on a case study they discuss challenges of SEM campaigns operated by small and medium enterprises (SME). After briefly describing the technical requirements for effectively controlling SEM campaigns the authors focus on keyword selection and how to address the long tail issue in SEM. A/B-Tests are shown to be an appropriate measure for optimizing the combination of ad copies and landing pages. Finally they discuss bid optimization at a keyword level taking into account spill-over effects between keywords.

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