Online Exclusive: Growth, Not ROI
We've been spilled a lot of online ink, lately, over the problem of using ROI as your sole SEM goal. Focusing on ROI means ignoring a lot of equally important things - like market share. Meanwhile, even if you're absolutely convinced that ROI is the only target you should go after, that doesn't guarantee that you ROI targets are actually calculated accurately. They could be entirely off. So any way you look at it, looking at ROI - and nothing else - might not be your best bet for SEM strategy.
A much better best bet, we think, is focusing on growth.
Before we go on with SEM growth, let's sidetrack a minute. Ask yourself: Why is your company in business to begin with? What drives your company to get out of bed every morning, so to speak?
Unless you're in a mom-and-pop shop, the answer to the question probably isn't to get a strong ROI on every investment. Your answer will probably something more like: "To do the best for our shareholders"; or: "To be the leaders in our space"; or, even: "To improve constantly."
Whatever the answer will be, it will probably come back to one vital word. That word is growth.
Growth means moving from the number five spot in the industry, to number one. It means doubling your productivity over the course of a year. It means going public, or going international, or buying out another firm. It means improving at all levels, at all times, and doing better tomorrow, at everything your business does, than it does today.
Growth is much harder to achieve, and involves leveraging far more aspects of your business, than ROI. ROI. As we said before in this space, ROI can happen over one smart (or lucky) transaction. Growth requires constant vigilance, creativity, and hard work. ROI is about doing well in one transaction or action, or type of transaction or action. Growth means putting all of your business to work, on every single thing that you do, to bring your whole business forward.
Obviously, you'll want all your business plans to be grounded in ROI: doing otherwise is irresponsible. After all, while you can miss the forest for the trees, you can't have a forest without trees, either.
But it's just as irresponsible, in the long run, to focus on ROI without taking stock of growth. Because while you're busy keeping an eye on the books, your competition has time to think up big plans and big ideas - and to implement them so fast that the only thing you'll be able to see is your customers, flocking from your business to theirs.
If focusing on growth should be the way you think about your business overall, why shouldn't it be the way that you think about SEM? Why should you settle for anything less than SEM management that leverages your entire business - your on- and offsite brand, your call center, your sales team, your landing pages and deeper-page site architecture, and everything else your business offers?
In other words, while you're busy focusing your SEM on ROI, you could be focusing on bigger-picture issues - like using SEM to grow your business while also achieving ROI.
It's tempting to say that it isn't fair to compare strategy for your whole business with strategy for SEM - which, after all, is a particular of your whole business. But not comparing SEM with your business as a whole ignores the depth to which SEM can be incorporated in your big-picture business strategy. It's a kind of depth that you'll want to learn about - and tap into - before your competition does.
And it's the kind of depth that only SEM growth will let you reach - while SEM for ROI might not.
Next week, we'll go into more detail about what this all means on a planning level.