When the economy weakens, companies will direct their attention to the marketing programs that provide the best return. Savvy marketers know this isn't the time to cut marketing budgets; it's simply time to ensure that marketing investments are getting the best return possible. The latest trends show that marketers are being held accountable for the return on their marketing investments, but companies are not cutting marketing budgets.
"B2B Marketing in 2008: Trends in Strategies and Spending" (MarketingProfs-Forrester Research) shows that marketers are increasingly being held accountable for marketing ROI in terms of business metrics. More than 70 percent of B2B marketers surveyed reported having systems in place that tie marketing success to business outcomes.
The same survey shows marketers are not significantly decreasing marketing budgets due to economic concerns.
• 45 percent of B2B marketers surveyed reported marketing budgets will remain unchanged.
• 50 percent reported an increase in marketing budgets with average increase of 26 percent.
• 6 percent reported a decrease in marketing budgets with an average decrease of 18 percent.
Search provides accountability and top ROI
Search marketing accounts for more than 40 percent of internet marketing, and research shows it yields top ROI. However, marketers must know how to closely track organic and paid search campaigns to see exactly how the campaigns break out in terms of performance. This not only helps justify marketing expenses to management, it also allows you to achieve even better performance.
The returns on measurement through web analytics can be significant when you use your customer data as actionable intelligence, whether management is calling for increased revenue from the corporate website or seeking a better return from your marketing campaigns. Let's say you are under the gun to improve performance for organic and paid search campaigns. Here's where knowing what to measure and how to analyze results with web analytics is key.
Organic and paid search synergy
Too often, marketers are overly focused on paid search results. However, it is clear that implementing both natural and paid search campaigns will empower you to more successfully accomplish your interactive business goals.
Paid search advertising is effective for increasing traffic volume to a website. Natural search is essential for building credibility and providing validation in the SERPs. When the economy is challenging, many companies increase their branding efforts. That's because in a competitive situation, the stronger brand will get the sale. Using both natural and paid search gives your brand the opportunity to place its products and services in front of millions of prospects 24/7 for both direct response and branding.
Today's marketers get the best results with integrated marketing programs that take advantage of the right marketing channels for their products, region and industry. It's always important to know how well your marketing campaigns are performing, especially when the economy pauses. Today, more than ever, it's important to use web analytics and campaign optimization to gauge and increase ROI.
Measuring search performance
Web analytics tools can perform a quick analysis of the core keywords in your industry, also enabling you to research competitor paid-search advertising trends and statistics for that industry. These tools can track and trend natural search results as well, modeling and predicting the benefits. Analytics tools are indispensable for tracking competitor search performance so you can understand how to leverage their strengths and weaknesses to your own advantage.
However, it's important to use accurate, clean data for best results. All your online advertising campaigns should be tagged with URL-tracking parameters to accurately measure site performance and/or online marketing campaign performance when executing dual natural and paid search campaigns.
Search, both natural and paid, is a significant driver of traffic for most websites. As the economy softens, there is increased demand to prove investments are working and to know how well. That’s when measurement becomes essential.
When you measure search performance, your web analytics reporting tools typically provide you with quite a bit of information right out of the box. You'll be able to see how much traffic your site received from each search engine. You'll even be able to see what search terms visitors used to view the paid or natural listing that led to your site. Before you can accurately measure search campaign performance, however, you must have established your Key Performance Indicators (KPIs).
Key Performance Indicators
KPIs are important metrics that can help you measure progress toward achieving website and marketing campaign goals. They must be quantifiable metrics that will indicate success or failure in meeting your established business goals.
When measuring search metrics, start by identifying site goals to be achieved with paid and natural search campaigns. You might want to measure year-over-year page views and the percentage of new visitors, identify conversion leads and engagement metrics, or look at homepage performance or international markets, depending on the nature of your site.
You must know who your visitors are and what they're looking for to set specific, quantifiable goals. Depending on your site category and business goals, the table below offers a few examples of KPI reporting.
As an addendum to your executive KPI report, you should include a search engine marketing scorecard.
The SEM scorecard is an ROI report for organic and paid search results, showing the SEM triad of organic brand, organic non-brand and PPC keyword results. Note: you must break out your brand vs. non-brand keyword data to separate online and offline impact on organic traffic acquisitions and conversions.
While the primordial term SEO (search engine optimization) should receive the credit for all organic non-brand keyword traffic and conversion data, brand managers typically involved with offline advertising should receive the credit for all organic brand keyword traffic and conversion data. The third group in the SEM triad, pay-per-click (PPC) advertising, should receive the credit for PPC keyword traffic and conversion data.
Drilling in deeper than traffic and conversion, ROI is positive when [value-per-acquisition] is greater than [cost-per-acquisition]. Therefore, a key metric within your SEM scorecard should be the "Conversion Value to Spend Summary."
As seen above, your dashboard should display a comparison of the conversion value to the investment and segregate organic non-brand (SEO) and pay-per-click. The example above exceeded everyone's ROI expectations. Organic non-brand (SEO) return on investment is 1,653 percent and PPC is 2,372 percent.
Executive KPI report and SEM scorecard
It requires a lot of preparation to set up the right KPIs in your dashboard and score card because there are many measurable website metrics to identify and evaluate. You must select the metrics that accurately reflect your business goals. KPIs are never permanent because your site goals can change, and your KPIs should change accordingly.
Allocating resources can be challenging, and this is where analytics modeling can help.
Analytics modeling for paid and organic search
Analytics modeling can be used to better understand how to allocate your resources and improve the performance of your search programs. To dig deeper into how the analytics modeling process works, I interviewed President and Chief Technical Officer Gary Angel of SEMphonic for in-depth information about tracking the results of individual paid and organic search campaigns.
When tracking dual SEO and PPC campaigns, Angel suggests adding a distinct campaign code to your PPC URLs during set up. This helps to learn the all-important split between natural and paid traffic.
"If you don't do that work, you'll see all your traffic as natural -- and you'll be unable to effectively compare the two," Angel said.
When used correctly, your web analytics tools can help you understand how many repeat visitors came to your site. It's important to identify repeat visitors for loyalty programs, but you can get a lot of false positives. Repeat clickthroughs can appear in your referral logs in two very different ways. Most clickthroughs will trigger a new visit (also called a session). But sometimes visitors will click through to your site, go back to the search engine and then click through again on the same or even a different search query, leaving the false impression that the second time is a new visitor.
"Your analytics program can compensates for this, and you'd be surprised how often it actually happens," Angel said.
Variability in search performance
In today's competitive environment, it's important to look beyond your total visitors via search by measuring the actual effectiveness of search traffic. Not all traffic is created equal, and search traffic is likely to vary in quality by channel (natural or paid), search engine and keywords clicked.
There can be a wide diversity in performance between natural and paid search. Natural and paid visitors on identical search terms often perform differently because paid programs invest resources to create a custom landing page for top performance; whereas with natural search, the page is "selected" by the search engine.
The difference is a controlled landing environment.
"The entry page makes a big difference in performance and can be a reason for using PPC even when your natural positioning is excellent," Angel said. "Sometimes, your natural landing page works better and that can be embarrassing on the paid side, but it's easily fixed by using analytics to optimize your paid search campaign."
Personally, I believe most search marketers are overly infatuated with paid search and continue to underestimate the power behind natural search. Based on user response, I've consistently seen SEO outperform PPC for the simple reason that unpaid natural results satisfy user intent on a personal, non-advertorial level. This search user characteristic, within various website categories, has resulted in loyalty, trust and repeat customers without controlling the landing environment.
The fact that visitors click on natural vs. paid listings may account for the variability in performance between paid and organic search campaigns. In fact, some search users simply don't use paid listings, and this audience segment may perform differently from others.
"Visitors might also use natural or paid listings depending on where they are in the buying cycle (information gathering, shopping comparison, buying, etc.)," Angel said. "At times, it may appear that natural search visitors perform less effectively than paid visitors or vice-versa, whereas it's really a case of visitors simply being in different phases of the buying cycle. When this happens, many of your campaign tracking tools will attribute sales only to the most recent campaign (and often lose visibility after 30 days)."
A major benefit of using a web analytics tool to segment your search traffic is the ability to get a better understanding of how your natural traffic performs over longer periods of time.
Learning to use an analytics tool takes time and practice before you can understand all of the metrics. As your search marketing programs evolve, you'll find that more and more colleagues want to understand how search is impacting overall site performance. Since search programs (both paid and natural) tend to shift rapidly, that question becomes difficult to answer.
As more questions arise about search campaign performance, you may find yourself spending too much time explaining the impact of your search campaigns. If so, you may want to rely on automated solutions or web analytics consulting.
Benefits of automated analytics reporting
Automated reporting can help you solve the time dilemma. To get quality automated reporting, it isn't enough to simply dump a batch of data into a spreadsheet and distribute it to everyone in the organization. Not only will most people be unable to find the data they need to understand how search impacted traffic, they will probably misinterpret a good chunk of the data they find.
When this happens, it might be beneficial to hire a web analytics consultant to provide easy answers to questions posed by various colleagues in different departments. Such firms have developed specific approaches to help you answer the difficult questions without taxing your time schedule.
As search programs grow ever larger and more sophisticated, there's a big advantage to being able to accurately understand and report the impact of search campaigns on overall business performance.
Analytics: vital to marketing success
Measuring the progress and success of natural and paid search campaigns has become key for many marketers, especially in today's economic environment. Accurate KPI measurement is not an easy task. That's why marketers must select a robust web analytics package. I can also suggest hiring a web analytics consultant to help set up your analytics package and get you started on tracking the right KPIs.
KPI expertise is a valuable asset for marketing managers, and the ability to accurately communicate the status of online marketing programs to management becomes a requisite skill.
The returns on precise measurement and analysis can be significant with analytics modeling. You can better understand how to allocate your resources, how to improve performance of individual programs and how to explain the impact of your marketing programs to everyone in your organization -- all important insights in challenging economic times.
Automated reporting helps you and your colleagues understand the impact of individual search marketing programs, allowing you to ensure that every dollar spent gets the best possible return.