Imagine if marketers could peek at a customer’s shopping list so they could customize promotions and marketing messages before the customer entered the mall. Well, they can with search engine marketing.
A mind-numbing array of advice is available to marketers about how to measure results of this powerful medium. In a recent report, Forrester Research suggested methods of measurement beyond the click-through to determine whether a visit develops.
Leads, transaction sizes and traffic were suggested as effective measurements, but regardless of the metric, an effective search marketing program must step beyond the variable click charges and focus on measuring meaningful actions such as sales or valuable leads.
The right keyword may be worth thousands of dollars. As search marketing grows in importance, it also is growing in complexity. Search engines offer unparalleled access to new online customers.
Search engine marketing, which starts with getting clicks, requires three strategies: tracking clicks to a sale or action (conversion tracking), a dynamic and broad base of keywords (keyword management) and management of keyword bids to meet targeted ROI (bid management).
Conversion tracking: the foundation. Paid search is priced on a performance basis so the marketer pays only when a keyword drives traffic. But what’s the value of that click? How does that click correlate to a sale or action, and what does that consumer do once he finds the marketer’s site?
The answers are found in conversion tracking. The marketer must be able to assign a converted value (action) to each visitor (click). This value forms the basis for the target ROI of the overall search program.
Keyword management: scale for success. Keyword management involves creating a master keyword list along with corresponding copy, including titles, descriptions and initial bids to submit to top-tier and secondary search engines.
Realistically, a marketer can handle a few dozen keywords but will require technology and specialized expertise to scale from a few dozen to a few thousand words across multiple engines and aggregate its keywords and copy into a central, manageable database.
This lets marketers adjust copy for seasonality (i.e., Father’s Day, Christmas or other short-term promotions) and ensure the call to action reflects the specific needs of the target demographic. By centralizing the information, marketers can better track conversions, manage the bidding process and make decisions to modify the program to meet goals.
Bid management: navigate the auction market. In today’s dynamic, auction-style market, online advertisers need to be on top of bid prices and strategies. Marketers must do three things to manage bids: audit, adjust and optimize. One way to ensure bids are working for marketers and not against them is to set up a timely auditing process that groups thousands of keywords into good, average and poor performers. It is tough to manage a thousand words individually, but when a system to group words around thresholds is in place, marketers can adjust bidding strategies going forward.
Marketers also can use technology to adjust bid prices daily with each of the top-tier and secondary search engines. In the near future, setting a bid price for the day will not be enough. The interest in the keyword and the value of the click may depend on the time of day. For instance, if a marketer doesn’t ship overseas, then late-night, international traffic may not be valuable, and the bid prices should be reduced during those hours.
Lastly, on a monthly or quarterly basis, look at the program overall to determine whether the marketing objectives that were set are being met.
Managing a search program to a targeted ROI requires these steps:
· Capture user behavior. Discern which keywords drive clicks, why and when. Identify core keywords and expanding peripheral words.
· Quantify costs. Evaluate total click costs, including the average cost per keyword, and determine which sets of keywords are more and less expensive.
· Measure conversion. Track the intended sale or action at the keyword level; discern the monetary value of the transaction at both the keyword and aggregate level.
· Determine ROI. Analyze acquisition costs over sales return. Measure keyword ROI while managing the overall search program ROI to maximize both sales volume and profit.
· Optimize over time. Expand effective keywords and cull poor performers. React to seasonality, including promotions and leveraging the dynamic auction-style marketplace.
Over time, hundreds of thousands of metrics will be logged. There is critical intelligence to be gathered and literally hundreds of thousands of individual actions that can be captured based on the data. Decisions need to be made based on the granular detail of ROI at the keyword level, but marketers shouldn’t get so bogged down in the details that they lose track of the overall ROI of the search marketing program.
Search marketing effectiveness should be measured against goals such as number of new customers acquired, revenue generated by newly acquired customers and the long-term value of the customers acquired. Therefore, a marketer’s search spend must be based on keyword data but should be analyzed overall and compared with other customer acquisition channels.
Search marketing generates value for thousands of marketers from small “mom and pop” businesses to virtually every large company with a good or service that appeals to consumers. All advertisers should follow the lead of savvy direct marketers and understand the value and cost of each customer acquired. It is a complex process that relies on technology to drive efficiency, but the payoff can be tremendous when done correctly. Paid search offers a platform where companies will find marketing efficiency and incomparable customer knowledge that not only serve as a framework but as an engine for sales success.