Putting the Efficiency Into Your Success Metrics

  |  March 21, 2012   |  Comments   |  

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.

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). These metrics tell the story of how the campaign is "working" or "not working" in general, but does it really tell the whole picture? 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 percent of all traffic to the site. (Pareto principle, indeed.) So what's going on with the other 80 percent 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 sets 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 No. 1 position to ensure clicks. While this falls into "the more you spend, the 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 are willing to invest more. But, what's going on with the other 80 percent 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 reallocated 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 shown that when you have a high ranking organic listing and top three paid listing you have maximized your exposure by as much as 60 percent. 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 is cannibalizing clicks and conversion from organic or increasing them.

SEO and SEM (PPC) are often managed by the different departments at most large-sized 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 listings 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 cost 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. Beyond these simple activities, are there others you can now think of?

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Motoko Hunt

Since Motoko established AJPR in 1998, she has been providing the online marketing services targeting Japan and Asia to companies from around the world, helping them to enter the regional market using the Internet. Her search marketing consulting services with her extensive knowledge of Asia and Japanese market have been highly valued and made big impact on some of the world's popular multi-national brands' search marketing campaigns.

A number of her articles have been published on industry websites and printed media including Multilingual Computing and International Journal of Localization. She also writes about the Japanese online market on her blog and She's a frequent speaker at search marketing conferences globally, and gives seminars and trainings about search marketing targeting Japan and Asia.

Prior to entering the online marketing industry in the mid 90's, she worked as a senior marketing manager at a traditional marketing and trading firm, marketing U.S. products to Japanese government and heavy industries.

She believes in giving back to the community and volunteers her time for industry organizations. She served as a member of Board of Directors of SEMPO (Search Engine Marketing Professional Organization), and is a Chairman of SEMPO Asia-Pacific Committee. In March 2009, she received the first SEMPO President Award for her support and dedication to the search industry and SEMPO organization.

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