Ass-Backwards SEM

  |  March 22, 2004   |  Comments

Marketers seeking results through PPC search advertising have it upside down.

"Ass-backwards" was the only word on my first slide at the recent Search Engine Strategies conference when I spoke on the Future of Search Engine Marketing.

I felt a little guilty using a semi-profane term to open, but I wanted people to wake up and take notice. Many marketers are asleep at the switch and don’t know it.

How else could they spend so much money on pay-per-click (PPC) search ads without addressing the fundamental underlying problem with their Web sites that limits their ability to increase return on investment (ROI)?

How else would you explain a universe of "marketing professionals" failing to address the single biggest impediment to increasing the ROI of search advertising spend?

According to Shop.org, the average retail Web site has a 2 percent conversion rate. Fully 98 percent of Web site visitors fail to convert, even though they performed a keyword query, selected your site from the results, and hence discriminated against all your competitors who were also in the results.

That’s unacceptable. Conversion rates under 5 percent are evidence of a conversion rate problem for most Web sites.

Search marketers fixate on conversion rates on a keyword-by-keyword basis. They’re content to optimize traffic without optimizing the conversion potential of the site.

The basic strategy looks like this: The search marketer buys 500 keywords on Overture and Google AdWords, only to discover a mere 100 of them drive visitors who purchase.

The marketer stops bidding on 400 keywords that drove traffic but few conversions. He then watches the performance of the 100 keywords that do drive converting traffic and determines which drive the most conversion at the lowest cost.

The marketer whittles that list of 100 keywords down to 50 with the highest possible conversion rate. Then, he plays with the position and ad copy of the 50 highest converting keywords, monitoring position and bid price hour by hour, working to lower total spend and increase the efficiency and conversion of these 50 keywords.

But if the Web site had a more persuasive architecture, if it spoke to more segments of the audience in their language and led them through the buying cycle, the site’s overall conversion rate would increase.

More important, more of the 500 original keywords would convert at acceptable levels. The 50 keywords that produced the most efficient conversions would increase to even higher levels and become even more valuable.

PPC search advertising spend would double, often triple, in effectiveness without increasing total expenditure. In other words, double the ROI. A higher conversion rate means you could chase more keywords to higher bid prices and grow your audience and customer base.

What do lazy search marketers focus on? Only the keywords that convert. They fiddle with bid prices and ad copy but fail to address the fundamental underlying problem of their site’s low conversion rate.

It’s a little like discovering your car is covered in dents and scratches. It looks hideously beat up. Instead of fixing the dents and the paint job, you wax it.

From 1996 to 2001, I visited companies and gave speeches declaring (often shouting) the online marketing mix was upside down. Back then, companies spent their money on banner ads first, email second, then affiliate marketing, viral marketing, and perhaps, as an afterthought, search engine marketing (SEM).

"Search engine marketing is elemental! It’s foundational to your online marketing strategy! You must do it first!" I shouted. Finally, after four years, search is the driver of online marketing.

Today, I find myself in a familiar situation. Online marketers are so busy fiddling with PPC search advertising campaigns, they’ve lost sight of their bigger problem: Web sites with low conversion rates.

Pursue a strategy for conversion enhancement first. Then you can double -- or triple -- your PPC search advertising campaign with great effectiveness. Anything else is inefficient and sloppy.

Want more search information? ClickZ SEM Archives contain all our search columns, organized by topic.

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ABOUT THE AUTHOR

Fredrick Marckini

Fredrick Marckini is the founder and CEO of iProspect. Established in 1996 as the nation's first SEM-only firm, iProspect provides services that maximize online sales and marketing ROI through natural SEO, PPC advertising management, paid inclusion management, and Web analytics services.

Fredrick is recognized as a leading expert in the field of SEM and has authored three of the SEM industry's most respected books: "Secrets To Achieving Top-10 Positions" (1997), "Achieving Top-10 Rankings in Internet Search Engines" (1998), and "Search Engine Positioning" (2001, considered by most to be the industry bible). Considered a pioneer of SEM, Frederick was named to the Top 100 Marketers 2005 list from "BtoB Magazine."

Fredrick is a frequent speaker at industry conferences around the country, including Search Engine Strategies, ad:tech, Frost & Sullivan, and the eMarketing Association. In addition to ClickZ columns, He has written bylined articles for Search Engine Watch, "BtoB Magazine," "CMO Magazine," and numerous other publications. He has been interviewed and profiled in a variety of media outlets, including "The Wall Street Journal," "BusinessWeek," "The New York Times," "The Washington Post," "Financial Times," "Investor's Business Daily," "Internet Retailer," and National Public Radio.

Fredrick serves on the board for the Ad Club of Boston and was a founding board member of the Search Engine Marketing Professional Organization (SEMPO). He earned a bachelor's degree from Franciscan University in Ohio.

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