Hitmetrix - User behavior analytics & recording

Don’t Get Comfortable with ROI

Your search ROI is up from last year. Way up. You’re getting more orders, spending less, and delivering efficiency that blows your offline efforts away. Does that mean you should be happy with yourself? Not necessarily. After all, there’s always market share.

It all goes back to the differences between the search world and the offline world.

Proactive vs. Reactive

Whether it’s a direct mail piece, a TV ad or an outdoor display, offline marketing is about catching people’s attention while they’re not thinking of you. It’s proactive on the part of the advertiser, reactive on the part of the customer. Which means you never really lose market share, because nobody-neither you nor your competitor-really “has” your advertising audience before the ad runs.

The fact that the medium is proactive also means that a poor ad performance might reflect your audience’s feelings towards a type of advertising, rather than reflecting your own ability to produce a powerful ad. If your audience isn’t responding well to your TV campaign, it might just mean they’re TiVo-ing your ads-in which case, they’re probably TiVo-ing your competitors’ ads, too.

In search, the opposite is the case. Everyone who’s interacting with the search medium-everyone who’s searching on a given set of terms term is looking to respond to the listings they’ll find. If they ignore your listing, they’ll go elsewhere. Which means that market share is inherently a part of the search game. And if you’re just focusing on whether you’re doing better than last quarter, or last year-but not looking at how you’re doing as compared to your competitors-you’re losing out on an entirely different level.

Online Means Always On

In the offline world, a lot of advertising revolves around time slots like prime time, the Super Bowl, and the evening news. And bricks-and-mortar stores often operate by standardized times, too: 10 – 7 on weekdays and 10 – 9 on weekends, for example, seems to be a popular schedule.

Competing with everyone on the same schedule makes it a lot easier to get a sense of your market share: if you get the ad slot, your competitor doesn’t; if you don’t get good store traffic, that traffic probably went to a competitor (assuming your business isn’t obsolete). Of course, there are 24-hour stores-but those are still the bricks-and mortar exception.

But the online world isn’t like the offline world. Anyone can go to any Web site at any time of day. Which means there’s no clear timeslot for you to look to and see, purely based on internal data, how well you’re faring against competitors.

Postscript: The Seduction of the Big Brands

A final word of caution. The bigger your brand, the easier it is to fall into the trap of overlooking market share. That’s because the more popular brands attract a lot of search traffic from people looking to convert on the brand itself, or who associate the field with a particular brand. And it isn’t hard for big brands to hit a strong search ROI by leveraging those brand-specific searchers.

But the easier it is to hit ROI, the easier it is to lull yourself into ignoring market share problems. And while you’re cleaning up on branded terms, you might be losing heavily on the generic ones. And even if you do get a high overall ROI on branded terms, your competitors still might be stealing traffic from you on many, many specific terms.

Of course, ignoring market share and focusing solely on ROI might not affect you right now-both at the level of the organization, and at the level of the individuals responsible for managing Search. But sooner or later, issues become too big to keep under the rug; market share problems begin to become ROI problems; and heads roll.

Which is why we suggest worrying about market share now-now matter how happy you are with your ROI.

Bill Wise is CEO and David Pasternack is president of Did-it.com, a New York search engine marketing firm. Reach them at [email protected]

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