How to Get More Sales per SEM Dollar

This week, Google held its SEM Advisory Council meeting in NYC. While I can’t share with you the product roadmap specifics or the beta products you’re likely to see released soon, I can say that there are some interesting products and features worth the wait. However, this column isn’t about the Google meeting, but a conversation at that meeting that served as the catalyst for this column. Training and best practices came up as part of an agenda item. Who doesn’t like training (assuming the training is comprehensive and accurate in its depictions of best practices)? Several competing agencies and I all commented that we often come across campaigns (managed in-house or at an agency) that were in shambles, resulting in overspending, missed opportunities, and waste. A properly structured, executed, and managed campaign (bidding technology and strategy aside) will always outperform a campaign that wasn’t.

Interestingly, the subject matched up well with the topic of a recent presentation I gave at the DMA annual conference in San Diego. While the DMA wanted a recession-centric topic about saving money on Google PPC (define) bills, to drive attendance, the reality is that the same best practices covered in the session can be used to drive higher profits for the same level of Google, Yahoo, or MSFT spending (rather than cutting spending while keeping campaign results consistent). Essentially, the session focused on how to apply proven direct marketing segmentation principles against search campaigns. Most of the audience were die-hard direct marketers, and yet had never thought to approach search marketing in the same fashion that they do direct mail, in terms of eliminating waste and leveraging power segments.

You already know how valuable search marketing is for your business. But you also know that, between the economy and a hyper-competitive search market, you need to stretch your search dollars further than ever before. How do you bring your search costs down without losing sales, and drive significant increases in sales without spending more?

Clearly, you need to have your accounts properly structured — I’ve covered those specifics in the past and Google has tutorials on that as well. How do you increase efficiency once you’ve got your campaigns set up properly?

Find Your Audience

Your search clicks are only as valuable as the business they drive. And the most efficient way to drive business is to focus on the audience most likely to convert. Remember the 80/20 rule: 20 percent of your customers will drive 80 percent of your sales. The better you can zero in on who that 20 percent is, and when and how they search, the more you’ll be able to accomplish.

Identifying your audience means understanding things like: what times of day your core customers search, what geographic regions they search from, and which demographics are most likely to convert. Getting the right targeting will help you decide which keywords to bid on, how to target your searchers, and what ad copy you’ll use to entice them to click.

Keep in mind that different audiences will respond to different creative messages. Learn which messaging works best with your core customers, and you’ll be on your way to success.

Use your targeting levers to grab the most valuable clicks based on all the positive post-click behaviors you can measure. Find geographies and times of day with:

• Higher conversion rates.
• Higher shopping cart sizes.
• More profitable shopping carts.
• More profitable frequent shopping behavior.
• More visits to the store locator.
• Better quality leads or sign-ups to newsletters.

Establish and Leverage a Relationship

Don’t just think of a search interaction as a single communication (or a single opportunity for a conversion) with your customers. Think of all the possible interactions beyond search.

When you’re targeting your best customers, think of which audiences provide the best lifetime value or the best lead quality. When you’re measuring the success of your campaign, don’t just look at immediate shopping cart metrics alone: use e-mail signups, online coupons that can be redeemed in brick-and-mortar stores, and phone tracking to understand how you can integrate touch points beyond your site.

Finally, consider search retargeting, which follows search-driven visitors across the Web with targeted display ads. My own firm and a few other search agencies have begun offering search retargeting over the past few years. Retargeting is particularly powerful for retail marketers who:

• Have over 250,000 visitors a month, between organic and paid search traffic.
• Have a purchase window longer than a day or two.
• Have customers that generally buy frequently.

But be careful. Pick a vendor that does not measure leads, orders, or revenue in a vacuum, taking credit for view through conversions in a silo. You’ll pay for a significant percentage of orders you would have gotten anyway, particularly if you have an active customer base.

Prepare for the Future

Here’s a final thought. From keyword-targeted video sponsored videos in YouTube, to paid search-like auctions selling display media, more segments of the advertising world are starting to look like search. This evolution leaves advertisers who want to be in business two years from now with a choice: to get a firm handle on search and where it’s heading, or to defer learning the latest trends and technologies. Obviously, the first choice will be much more cost-effective. Learn what you can now, so you’ll be able to do more with less.