Driving SEM Campaigns Using the Rearview Mirror

A lot’s been written about Web analytics. Most of it’s right on target. Yet, there’s an often-overlooked aspect of analytics in respect to search engine marketing (SEM): the dynamic nature of the search marketplace.

Every day, sometimes many times a day, the paid-placement marketplace shifts. Bid prices change; listings move about and change positions as competitors change bids. Other marketers compete against you to hit their daily budget caps or alter their copy.

End result? Your ads move around in proximity to other ads. Even if you manage your bids to a position (exact position in Overture, FindWhat, etc., and average position in Google), the surrounding bid landscape may be change in a variety of ways:

  • Competitive mix. The competition may change.

  • Competitive position. The competition may swirl around you.
  • Competitive creative. The competition may have changed their creative messages.

All these factors can change your listing’s conversion rate. If searchers find a better offer than yours — either by visiting a site or simply reading about it in ad creative — it affects your campaign. Conversely, if your most aggressive competition leaves the auction or runs out of budget, you may find your conversion rate rises.

Depending on time of day, day of the week, and current events, you may find changes in conversion rates and traffic quality and, therefore, in return on investment (ROI). If the competition changes pricing, offers, or landing pages, that can change your conversion, too.

Web analytics, or any tracking system, can only track and report some of the variables mentioned above. Reports from off-the-shelf analytics packages tend to report averages. Don’t forget, it’s not just reports you’re interested in. Think action. You want to take the right action at the right time, based on the overall effect of the multiple variables surrounding campaign success.

This is where the manual processes based on Web analytics break down. When analyzing data, go too far back in time to make bid decisions, and you can make the wrong decision. It’s like driving forward while looking in the rearview mirror. Can you drive down a road by looking in the rearview mirror? Sure. If you’re careful and pay close attention to the road markings, whether they curve behind you or go straight. By carefully gauging where the car’s pointed in respect to the road, you might do OK, at least on a predictable, traffic-free road.

For many search campaigns, the road ahead holds hairpin curves, potholes, traffic, and an accident or two. Web analytics, like a rearview mirror, falls short in too many campaign management situations.

We obviously can’t predict the future bid landscape, CPCs, and competitive activity, but we can be intelligent about how historical data is used. We can seek repeating patterns and model behavior based on how the marketplace responded in the past. Knowing what external factors caused a change in a campaign’s success can help build a better model, but any model must be validated against the most recent available data.

Beyond the actions and reactions of the competition and predictable changes in conversion by time of day or day of week, each industry has different external events that can totally skew data and require immediate action. Imagine the following keywords and their likelihood to convert before or after certain current events:

  • “Paris Hilton” for a hotel booking firm prior to 2001 vs. after the infamous videotape

  • “Janet Jackson” a year ago vs. Super Bowl Sunday
  • “Ronald Regan” for a memorabilia firm before and after his passing
  • “Gas mask” or “American flag” before and immediately after September 11
  • “Flower delivery” the Thursday before Mother’s Day vs. the Monday after

You get the point. Conversion percentages can dramatically spike or plummet on a stream of clicks from a keyword listing. Traffic volume on that listing can simultaneously change, as well. The best campaign management strategies and models rely on analyzing a rich amount of tracking data. But either a person or an automated system must watch for sudden changes in conversion behavior that may be due to external factors.

If you’re like many search marketers, you have no choice but to deal with a highly volatile, ever-changing competitive landscape and a changing business environment. Establish a flexible system or process that works for you, given your business and the way the search marketplace changes day by day or hour by hour. Don’t be afraid to reevaluate data to find new patterns to help predict the curves in the road ahead.

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

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