greg meyers

Search Marketing Articles

Paid Search: The Margin of Error

Paid Search Marketing has evolved into a multi-faceted business channel where complexity, relevancy and structure is considered a best practice. During its infancy stage, we were measuring success based simply on clicks/increased traffic and CTR%. Then as the paid search engines matured, they started to supply its users with all kinds of nifty “bells & whistles” that allowed us to try and get the most out of our budgets. But with all of the tastes and scents that the engines have been throwing at us, isn’t it time to take it even deeper to find that “right mix” that really makes sense from a business perspective.

With the birth of Analytics programs such as Omniture’s Search Center, we can now track the ROI% performance not only by search engine, but at the campaign and even keyword levels of each engine. However, quite possibly, a super-optimized campaign filled with high CTR% & ROI% could in retrospect, be affecting your business’s bottom line if there is not a clearly defined (CPA) Cost-per-acquisition and Cost/Margin for each and every product or service that is using online advertising dollars.

Werenotworthy Have we been so consumed with real-time performance based analytics and metrics, that on the outside looking in, we have been “blind-sided” to not focus our attention on the traditional CPA and Cost/Margins to decide whether the product or service is even “worthy” of a certain percentage of online advertising dollars? Are these business goals and benchmarks really being addressed? Are you unintentionally hurting your bottom line?

Here are some common perceptions: One would think that driving high volumes of online traffic makes up a successful SEM Strategy. Another would classify success by not only driving a high volume of qualified traffic, but also achieving high CTR% and tracking ROI % performance at the campaign and keyword levels for each engine. But even then, it is enough?

Well, it’s not a matter of performance as much as it is online marketers getting into the habit of thinking and looking at Cost/Margins and CPA for each and every specific product or service. Based on these factors and these factors alone, we can then decide whether it even deserves to spend money on driving qualified traffic, regardless of the traditional success factors such as CTR% and ROI%.

We need to consider, that with all of the best practices and techniques out there that are being applied to SEM campaigns, we need to focus on: (1) How much are we willing to spend to get a customer? (2) How much money are we willing to spend to sell a specific product/service?

In the scheme of things, as paid search budgets and competition continues to increase year after year, the idea of looking at the fundamental “offline” business practices definitely deserves deep consideration, especially as other search marketing tactics such as SEO become more difficult to win.

Recommended Books