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SEO + SEM + SMO = ROI

  |  February 3, 2011   |  Comments

Getting back to the basics with some well-worn acronyms to remind us what they are, why they're important, and how to do each correctly.

Everyone's doing "digital" now, and many surveys say that most advertisers will increase the majority of their digital budgets in 2011. But what is not so certain is whether the advertisers or their agencies will be deploying those dollars wisely and effectively across digital tactics. In fact, a recent compilation of studies shows that most marketers openly acknowledge their lack of understanding of many of the diverse digital tactics and seek to improve their knowledge. So it may be worthwhile to revisit some of the well-worn acronyms - SEO (search engine optimization), SEM (search engine marketing, aka "paid search"), SMO (social media optimization), and ROI (return on investment) - and get back to the basics of what they are, why they're important, and how to do each correctly.

SEO (Search Engine Optimization)

In a world where users' first instincts are to go online to look up the answer for pretty much anything, search engine optimization should be the first thing on advertisers' digital to-do list. After all, "if they can't find you, you don't exist." At a minimum, advertisers' websites that are a few years old should be revisited with an eye towards whether the content is in text or HTML format so that search engines can index it. Many sites built in recent years still excessively use Flash and graphics and are thus "hurting themselves" because content inside graphics cannot be indexed by search engine crawlers. So while the site looks pretty to human eyes, it looks blank to search engines because the content is hidden. There are further advanced techniques to ensure proper and complete indexing (see Glenn Gabe's e-book "Taking Control Of Your Online Marketing").

SEM (Search Engine Marketing)

Once your website "house" is in order through basic SEO techniques, you'll be ready to drive more traffic to it through search engine marketing, or paid search. These are the paid ads on the right-hand side of a Google search result page. Because these ads are served up based on exactly what term the user is searching and when they are searching for it, these ads are orders of magnitude more relevant and timely than other forms of online ads - such as banner ads, which are served up next to content. Furthermore, because paid search ads are typically paid only when there are clicks (cost per click), the advertiser cuts out the 99 percent that would have been wasted; in other words, if click-through rates are 1 percent, that means the other 99 percent of the impressions are wasted. So by switching from paying for impressions to paying only for clicks, approximately 99 percent of the waste is eliminated (see "This is what happens when 99% of the inefficiencies are cut out of a system").

SMO (Social Media Optimization)

In the new digital world where users ignore most forms of advertising as "noise," what is an advertiser to do? Most are turning to social media and social networks like Facebook, Twitter, etc. But as we have seen before, many are still applying "old world" tactics and metrics to it; in other words, buying billions of banner ad impressions on a CPM basis on Facebook - to achieve branding through "reach and frequency." At a minimum, advertisers should "click the radio button" on Facebook advertising and switch from paying by CPM to paying by CPC (paying only for the clicks they get). This will save tens of thousands of wasted ad dollars instantly (see Facebook Advertising Metrics and Benchmarks).

A more sophisticated way to use social media would be to empower users to pass along and amplify your message, or better yet, let them create their own "rave" about your product and pass that along in their own words. Their words can yield powerful insights about what they think are the key attributes of your product and why they think they are important enough to pass along. Finally, the phenomenon of social commerce occurs when "friends don't let friends do just social media"; they are so passionate about a product they not only tell their friends about it but they help their friends all the way through a purchase.

ROI (Return on Investment)

So, what do you get with even a few tweaks to the execution of the well-worn acronyms above? ROI! And ROI in my book doesn't mean more traffic to a website or a higher "brand affinity" score. ROI means dollars made or dollars saved. By making your content indexable and more easily found by your target customers through proper SEO, you're helping them get closer and closer to the purchase of your products. By switching from costly, impression-based media to paid search (SEM), you are eliminating lots of inefficiency and wasted media dollars. Finally, by enabling and encouraging your customers to be your loudest fans (proper SMO), you leverage genuine word-of-mouth to achieve social amplification and even social commerce for the ultimate in ROI.

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ABOUT THE AUTHOR

Augustine Fou

Dr. Augustine Fou is the senior digital strategy advisor to CMOs, marketing executives, and global brands. Dr. Fou has over 15 years of Internet strategy consulting experience and is an expert in social media marketing strategy, data/analytics, and consumer insights, with specific knowledge in the consumer packaged goods, financial services/credit cards, food/beverage, retail/apparel, and pharmaceutical/healthcare sectors.

He is a frequent panelist, moderator, and keynote speaker at industry conferences. Dr. Fou is also an Adjunct Professor at NYU in the School for Continuing and Professional Studies and at Rutgers University at the Center for Management Development, where he teaches executive courses on digital strategy and integrated marketing.

Dr. Fou completed his PhD at MIT at the age of 23. He started his career with McKinsey & Company and previously served as SVP, digital strategy lead, McCann/MRM Worldwide and group chief digital officer of Omnicom's Healthcare Consultancy Group (HCG). He writes a blog "Rants, Raves about Digital Marketing" and can be found on Twitter at @acfou.

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