Goals are good. In fact, they are fundamental. Budgets, however, are bad. They limit our imagination, cause us to forsake opportunities and ultimately drive down performance. So, how can you move beyond your search engine marketing budget?
Finding gems – By focusing on the margin per customer as a metric, you have a chance to get out of your safe zone. You can play in the keywords that you know will work (this is where budget-based programs stop) and experiment with keywords, targeting and methods (we’ll touch on these later) that are unproven. This is where you will probably find the gems that are often missed by those budget-based programs.
Acknowledging value – Traditionally, marketing budgets are line items on the expense side of the ledger where accountants, faced with making draconian budget cuts, can easily make decreases without sensing an inherent loss of value. By building the model around contributions per acquired customer, or other monetized event, marketing efforts are properly seen on the revenue side of the ledger where value can be more accurately acknowledged outside of marketing.
Making it happen – If you work with the traditional budget based model, transitioning to the revenue metric can be a challenge. To be a change leader, you have go outside the search box and gain insight into ways your company makes money.
You then need to set three key metrics on the way to managing by revenue: required margin per sale; close and conversion rates; and affordable CPC. These numbers can change dramatically from day to day, so manage and adjust them.
Managing a search engine marketing program to these metrics requires tracking and reporting. So there are no real shortcuts here. It takes time and effort.
Along with the proper inputs and tracking to the ultimate disposition of the click, you will need reporting to allow you to assess the program performance and optimize it. To implement the needed tracking and reporting, you can build in-house systems or your can implement third-party solutions.
Through this process, you’ll “free up” margin, allowing you to take a risk and then optimize it.