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Budget Allocation Within and Across PPC, SEO, and Content

  |  January 31, 2014   |  Comments

Put in place a process to understand how hard each form of marketing is working for you, how much it costs to ramp up that form of marketing, and how each form can change the behavior of your clients.

If you valued SEO clicks at the same cost as pay-per-click (PPC) clicks for similar keywords, chances are your SEO investment budget would look very different than it does now.

Your boss -- or perhaps you yourself -- might be wondering if SEO clicks and PPC clicks are interchangeable and if your current resource allocation between PPC search and SEO is in fact optimal. This is a nontrivial question that marketing teams wrestle with all the time, or at least they should wrestle with it a little.

Most marketing departments -- and perhaps your own marketing team -- should be thinking about marketing and media touch points holistically. This means you have to think beyond even attribution and marketing mix modeling (econometric models) because part of your investment strategy needs to compare the results from an SEO/content marketing investment to continued investments in media, particularly PPC search.

You will need to predict, and with as much accuracy as possible, the changes in position or traffic you might obtain as a result of your SEO investment on a dollar-by-dollar basis. That's because you can test the elasticity of supply of PPC search clicks on any keyword and know the cause and effect of any investment you make in SEO. In other words, if you invest X dollars, you'll get back Y leads, or Z revenue/profit.

These days, return on an SEO investment is much more challenging to calculate, not only because the search engine results pages (SERPs) are more competitive than ever and Google/Bing's algorithms are ever-changing, but also because the lines between content marketing for SEO and social media content promotion are blurring. The blurring of these lines (because content needs to be interesting to drive significant direct traffic and also act as link bait) means you need to calculate -- as best you can -- the traffic you'll get from both social media and SEO on the same content.

As if predicting SEO and social success ahead of an investment wasn't hard enough, you should also try to compare the quality/value of the clicks from the different sources. Once you've done that exercise, you can finally compare the cost-benefit of continued investment in PPC search (and other paid media) against the more speculative investments in SEO and content (promoted via social media and old-school SEO means).

Consider the following twists and questions when you establish a process of budgeting across paid search and earned/owned media:

  1. How should overall digital media and marketing budgets be set? What share should be allocated to self-funding media and marketing based on measurable ROI? Should influence and branding be measured and included?
  2. Discover and measure the approximate marginal elasticity of power keywords within your campaign. Knowing this is important because, as your budget goes up and down (particularly up), it's useful to know the level of additional clicks you can get at various percentage (or fixed) bid increases.
  3. Some new ad formats rely on good social media ratings to deploy, and there is a positive lift in ad performance when the social extensions are triggered. For example, should you invest additional time and energy in establishing a strong Google+ profile because of the impact it has on your PPC campaign?
  4. Discuss internally whether SEO investments should be valued based on the CPC spend that would have been required to get those same clicks. If so, how confident are you in the success of SEO at various levels of investment?
  5. Create a process that results in the best way to predict the success of SEO, content marketing, and social media investments. The beginnings of a model may be established by looking at previous investments in content and content promotion that have been successful.
  6. Because SEO, content marketing, and the promotion of your best content via social media are so intertwined, how have you structured teams and communications?
  7. Content can be "evergreen" or newsworthy. Sometimes content that is evergreen is more challenging to get ranked because it's not as interesting as real-time topical content and won't gather as many links via social media. Look back at your news vs. evergreen content, the rank you've achieved, and the quality of the resultant traffic.

The days of siloed budget allocation are behind us. Put in place a process to understand how hard each form of marketing is working for you, how much it costs to ramp up that form of marketing, and how each form of marketing interacts with each other in changing the attitudes and behaviors of your prospects, customers, and clients.

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Kevin Lee

Kevin Lee, Didit cofounder and executive chairman, has been an acknowledged search engine marketing expert since 1995. His years of SEM expertise provide the foundation for Didit's proprietary Maestro search campaign technology. The company's unparalleled results, custom strategies, and client growth have earned it recognition not only among marketers but also as part of the 2007 Inc 500 (No. 137) as well as three-time Deloitte's Fast 500 placement. Kevin's latest book, "Search Engine Advertising" has been widely praised.

Industry leadership includes being a founding board member of SEMPO and its first elected chairman. "The Wall St. Journal," "BusinessWeek," "The New York Times," Bloomberg, CNET, "USA Today," "San Jose Mercury News," and other press quote Kevin regularly. Kevin lectures at leading industry conferences, plus New York, Columbia, Fordham, and Pace universities. Kevin earned his MBA from the Yale School of Management in 1992 and lives in Manhattan with his wife, a New York psychologist and children.

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