Success Metrics with the Efficiency
Let’s put the efficiency into your success metrics!
The success of search marketing campaigns is usually measured using a set of action related performance metrics including, visits, revenue, cost per acquisition (CPA), and return of investment (ROI). In general, these metrics tell the story of how the campaign is “working” or “not working”. But, does it really give you the whole picture? The revenue generation is only half of the function of creating shareholder value. The other side is reducing costs or getting more for the limited budget, which we will refer to as Media Efficiency. Unfortunately this is rarely measured and runs counter to how many campaigns are managed.
Let’s say that you had 500,000 organic search visits in February from 150,000 keywords. Often times, people look at the top keywords by traffic volume, and flag them as the main keywords to target. While the top 15 keywords may bring 100,000 or more visits to the site, that’s only 20% of all traffic to the site. (Pareto principle, indeed.) So what’s going on with the other 80% of traffic? Do you ever wonder why it does not convert? If you have access to the analytics data, you’d realize that high traffic keywords aren’t always really the high performance or high conversion keywords. The idea of going through thousands of keywords may be daunting, but looking at the data using different set of metrics; such as reducing the bounce rate, and the revenue contribution, helps you finding the “hidden” opportunities that can often exceed the performance of some of your higher traffic keywords.
With the Pay-Per-Click (PPC) and other advertising campaigns, people tend to over focus on their top revenue generating or top click through rate (CTR) keywords. Since these are your primary metrics it encourages you to keep raising the bid cost to maintain the #1 position to ensure clicks. While this falls into “the More you spend, more you make” philosophy it does not encourage cost savings and media efficiency.
Paying more for words that convert sounds like a good thing and relatively harmless to the organization especially if you have a good size budget, and management, who understand the value of PPC traffic and willing to invest more. But, what’s going on with the other 80% of the words and can we make content, ad or offer changes to allow us to get the same results for less money?
One of the traps when focusing too much only on high converting keywords is that you may not realize where you are potentially wasting money on clicks. For example, when I reviewed one of my clients’ campaigns, I found that they’ve been spending thousands of dollars for keywords, which haven’t had any conversions but they made the campaign look better with high traffic rates. A keyword with a high search volume and high click through rate may look like an important keyword to target, but when you add the conversion metric to the report, it clearly shows that it’s not an appropriate keyword for your business. This is very common with broad matches on head or category keywords.
The words may actually be relevant or help create awareness so you may not want to remove the keyword from the campaign completely. In this case, you should at least set up the keyword in a different ad group, changing match type, lowering the max bid cost. Additionally you can improve media efficiency and overall performance by reviewing the search query relevance, updating the negative keywords, and optimize ads and landing pages. The client mentioned above paused those high cost per click keywords with no conversion, then re-allocated the budget to higher converting keywords resulting in a significant decrease in costs and increase in revenues.
The fact is that most management primarily cares about the revenue growth and the better conversion. There really is no incentive for the PPC managers to look for other areas for improvements.
Various research reports have show that when you have a high ranking organic listings and top three paid listing you have maximized your exposure by as much as 60%. While this sounds great in research what is the actual situation with your keywords? It is important to test keywords in this situation to understand if the paid search listing cannibalizing clicks and conversion from organic or increasing them?
SEO and SEM (PPC) are often managed by the different departments at most large size corporation. It is rare that these departments share the reports or amazingly even their keywords.
How is the SEO team doing with their keywords? Are they in alignment with the PPC keywords? One quick test is to aggregate your paid and organic data into a single worksheet. Sort the data by paid search CPC and see if you are also ranking well for your words with a high cost per click. We often find that words that are important to the PPC team and worthy of premium bids are not on the list of the SEO team. Every click and conversion we can get from high-ranking organic search listing is a direct savings in paid search. This creates collaboration between the two listings, which leads to direct savings.
Continue to track and manage for your normal metrics but also add a direct focus on increasing your media efficiency by more deeply mining long tail and collaboration opportunities, validating searcher interest and looking for those nuggets that will allow you to get more visits at a lower costs and still exceed your revenue goals.
We have identified a number of quick checks that you can do to ink out incremental value from the search campaigns. These are simple enough for anyone to implement quickly in 2021 activities.
*Updated my article originally published on ClickZ in 2013.