The paid search conundrum. Are your expectations realistic?

There’s no arguing that setting up a paid search campaign on Google, Yahoo, MSN or any number of second tier search engines (e.g., Ask.com, Business.com, etc.) is a great way to test the waters with online advertising.

Paid search campaigns can be up and running in less than a week (assuming you have your keyword list and ad copy ready to go), they cost very little to deploy if you’re managing them internally and you can start with a very small budget (unlike other media channels that have minimum spends for a fixed ad buy – magazine insertions, for example.)

Considering this, is it any wonder that paid search spending has grown 26% from 2005 to 2006 and eMarketer predicts search spending will reach 10 billion by 2009?

But if you’re new to search marketing, or if your company has just begun to truly invest in this very response-driven form of media, then you may be in for a surprise when the results of your campaign are not what you expected.

The disillusionment of search

I’ve seen it happen again again. Advertisers have some initial success with their search campaign so they increase their budget, expand their venues beyond Google or Yahoo and triple their keyword list only to find that they are now paying more for the same or, quite often, less traffic, leads and sales. Why does this happen? Who is at fault? Well, probably you.

Search campaigns are like snowflakes – each one uniquely different due to a dizzying array of variables that range from the precise keyword list to the number of ad groups right down to the landing page or pages.

However, when search campaigns fail it’s generally easy to pin point the same handful of problems regardless of how the campaign is set up or what keywords you’re bidding on.

Unrealistic expectations. Search marketing is a wonderful thing and when it works it REALLY works. But search is not magic. Say it with me, folks - “search is not magic!” If someone clicks on your search ad and gets to your web site, don’t pat yourself on the back yet. It’s way too early to celebrate. If this certain someone clicks on your ad and leaves your web site without converting in some way, then you have failed. (ok, group hug and let’s move on). If you expect your tiny 95 character Google ad to do ALL the work for you, then you’re setting yourself up for disappointment. You need to have an actual marketing strategy in place that considers lots of things from landing page layout to ongoing customer relationship management.

Increasing competition. You’ve probably just discovered that search marketing is an excellent event-driven marketing tool that you can ramp up quickly to coincide with many things such as a Mother’s Day Sale or a trade show where you’re exhibiting. You may have also realized that search is an excellent sustainable source of traffic, leads and/or sales. And guess what? So has everyone else. This means that the cost per click for your keywords is rising, particularly for highly competitive categories. A higher cost per click means a higher cost per acquisition. Do the math before raising the bid.

Poor campaign measurement. This one would seem to be a no brainer, but it plagues the search industry like the ever-present common cold. If you are putting most or all of your marketing dollars into search – and that could mean thousands per day or week for some companies, then you absolutely need to measure the results properly or YOU WILL FAIL. This can be a problem if you don’t close a sale directly from your web site, but rely on a sales team to actually seal the deal. ComScore reports that 60 to 90 percent of search-generated leads convert offline. There are companies such as eStara and Liveperson.com that provide tools for tracking click-to-call conversions from search and other online marketing initiatives. Understanding what terms actually convert is the best way to optimize your search campaign because it means you can ditch terms that cost you money without converting. It’s really that simple.

Poor landing pages. If you’re not creating landing pages with specific goals in mind, then you’re doing search wrong. All landing pages are NOT created equal. If you want people to register so you can send them e-mails and marketing messages, then your landing page should look different than someone who wants people to buy a product. Likewise, if you’re selling a service or nontangible goods like hosting or a music subscription (e.g., Vonage, GoDaddy, Rhapsody.com), then your landing page should be created with that goal in mind.

Search Marketing in a Vacuum. In very few instances, a search campaign can contribute sustainable leads or sales on a consistent basis without the cost going up. But for most advertisers, search will grow increasingly expensive and sales, leads or traffic will fluctuate from month to month. That’s why it’s important to develop a complete marketing strategy that goes above and beyond search. To make your search dollars work harder for you, make sure you have an arsenal of marketing tactics to support the campaign. E-mail marketing, blogs, press releases and articles are just a few examples of how you can mix it up a little without breaking the bank.  

Search marketing is not as straightforward as it seems. When setting expectations for how your campaign should perform, keep the above in mind and try to not to get too stressed out. After all, it’s only media!

Add comment November 29th, 2006

Performance Matters!

I had the baffling experience today of asking an agency to clarify if there were any changes to media placement from Q2 to Q3 in a specific campaign and getting a very vague response which amounted to, “”Yes, we definitely optimize our campaign for media performance.”

Let me clarify that I was in a unique position of not actually being the media planner for the campaign, but rather, I was acting as the analyst for my client. I was tasked with reviewing quarterly performance for a long-term e-mail marketing program that gets its e-mail subscribers (enrollments) primarily via online media.

This is an odd perspective for me. I’m usually in the driver’s seat when it comes to getting leads, and not in a position of analyzing overall performance results on a campaign that I had absolutely nothing to do with planning or implementing.

It surprised me that the only response to my inquiry about optimization was a, ”Yep, we optimize the media and reallocate budgets according to what vendor performs best.” In reviewing the stats, it appeared otherwise. I saw that enrollments from all paid media sources had actually decreased from Q2 to Q3 (except for one vendor which was added in the middle of Q3). So my reaction was…”huh?”

The plot thickens

The agency said they optimize the media, but the media performance proved otherwise. Not only did enrollments coming in from paid media sources consistently decline from Q2 to Q3, the the number of search enrollments was decreasing steadily going as far back as Q1. Now, there could be some valid reasons for this that have nothing to do with optimization (or lack thereof) and these include:

• The media budget was reduced from Q2 to Q3
• There was some type of change on the vendor side (e.g., a CPA network lost a major publisher, an e-mail list was not used from one month to the next, etc.)
• The creative changed drastically and tanked OR the same creative was used for the same list/site/channel for too long and thus lost its dazzle (ad burnout) 
• Mars and Saturn were not perfectly aligned in their orbits

But seriously, even if the budget was reduced and/or a combination of the above contributed to the overall poor performance from Q2 to Q3, it is the responsibitility of the media agency to figure out (to the best of their ability) what happened to cause the campaign to perform poorly and what could be done to improve performance. 

If it’s something very simple, e.g., a budget reduction, then the next thing they should be looking at is the total number of leads compared with the total budget. For example, did leads decrease comparatively to the budget decrease or did they decrease at a lower rate than the percentage the budget was decreased (e.g., if you decrease your budget by 40% but your leads/sales only decrease by 15% then you’re doing something right). If you’re doing something right, you then need to figure out what it is so you can reproduce that media magic throughout Q4 and beyond.

Don’t accept, “we optimize your media for performance” as a good answer. Make your agency go deeper than that with details about what they think is actually working (or not) based on the actual performance metrics.

A line graph that shows your conversions going down down down from quarter to quarter needs some supporting insights about why this is happening and some actionable recommendations about what should be done to change the direction of that trend.

Add comment November 3rd, 2006

Synergy between search and display advertising revealed

A recent Atlas Digital Marketing Insight titled, “The Combined Impact of Search and Display Advertising,” reveals some interesting stats about the combined use of online display ads (banners) and clicks on search ads in the same campaign.

The study, tracked across 11 advertisers for the month of April 2006 showed that:

• Campaigns combining search and display ads provided a 22% conversion rate lift compared with search alone
• Users exposed to both display and search ads convert at a rate of 400% better than display alone
• Search and display conversion rate varies quite a bit (as much as 8x) between advertisers, so it’s very important to monitor your campaign to see how well it converts when display ads (or search ads) are added to the mix
• Users who viewed three or more impressions in combination with one search click had better results than those who viewed one or two impressions (although too much of a good thing, e.g., two many impressions had the opposite effect)

It comes as no surprise to me that display ads such as banners which have long been paired with branding campaigns (as opposed “response”) can actually help foster conversion when paired with search ads. I’ve worked on a variety of online marketing campaigns and it’s always the ones that incorporate  multiple tactics (e-mail, search, CPA, SEO) that are the most successful. When you are thinking about your 2007 media plan, it is important to look beyond any one tactic to the big picture when trying to achieve overall success.

How can you apply the above knowledge to your own campaigns?

One way to start experimenting with banner ads and other display ads is via Google’s content network which allows advertisers to upload a variety of creative types to an existing Adwords campaign. Banners associated with keyword-targeted campaigns are displayed on a CPC basis. Advertisers can also create a banner-only campaign on select content sites (this is called “site-targeting” in Google). Banner only site targeted campaigns are charged on a CPM basis via a bidding system. It is still comparatively cheap to start off with display advertising through Google’s content network since you aren’t paying a premium CPM for impressions.

Content networks (in addition to Google’s AdSense network) such as ContextWeb present another option to get a lot of exposure on from your ads for a fairly low CPM (image ads are generally charged on a CPM basis) on premium web sites where the CPM is ordinarily very high.

An important take away from this report is the importance of using multiple channels to reach your target audience. Sure, search  marketing is great and very often it’s effective, but it’s not the only way to reach your target audience. As search becomes more expensive, getting an adequate return on investment will become more difficult.

Increasing your campaign’s performance (and achieving your ROI goals) may be as simple as differentiating the media you use to reach people. It will surely set you apart from advertisers who stay stubbornly focused on one tactic, be it search or otherwise.

Add comment November 2nd, 2006