SEM Marketing Leverage

If you haven’t already explained search engine marketing (SEM) to your CEO, CFO, president, or marketing VP, now’s the time. Senior management will be pleased to learn about the revenue, profits, and return on investment (ROI) SEM provides. Explain to the top brass that unlike most other types of marketing, the concept of marketing leverage should be used to justify significant budget increases. Marketing leverage and business leverage are based on very similar concepts.

Distinctions between overall best business practices and marketing best practices merge when you consider the marketing budget as an investment in the business, not unlike capital equipment.

When you or your firm borrows money to invest in your business, it’s called leveraging the company. You (and the bank) are confident the return on the borrowed money will exceed the loan’s interest. Borrowed funds are used to finance expansion to facilitate the repayment of the loan.

The same concept holds true for marketing. In marketing, particularly in SEM, the money you spend is an investment with a predictable, controllable return.

Most search marketers have some means of campaign effectiveness tracking at their disposal. Tracking attributes campaign results (profit or revenue) back to the SEM campaigns at the most specific level possible. Earlier columns discuss how and why it’s a best practice to measure and track spending down to individual keyword listings by engine creative, landing page, and other factors.

A high level of tracking turns an SEM investment into leverage. The investment is used to guarantee business goals and objectives are met. Executives consider every business investment from short-, medium- and long-term ROI perspectives. By making sure they know what you’re doing in SEM, you empower them to allocate more budget, staff, and resources (they may even decide you need a raise). After all, you’re contributing to the company’s success.

Once senior management supports an expanded SEM campaign, it’s time to bring in the rest of marketing operations and the IT team. If you use an interactive agency for development or media buying, it needs to be pulled into the loop, too. The entire team is important, because decisions the team makes affect your ability to meet or exceed next quarter’s and next year’s goals.

SEM doesn’t happen in a vacuum. The site, from landing pages to the checkout and lead-generation processes, is the next thing people see and experience when they click on a keyword ad. Nothing derails campaign profitability faster than a poor user experience.

Conversion marketing best practices center around user experience and how that experience corresponds to the searcher’s intent. When a searcher communicates via a search query (a keyword or keyword phrase), you must get into the searcher’s head and imagine the experience he may have on the site.

Pay particular attention to the following for every landing page:

• Copy and offer
• Page headline
• Relevance to the search
• Page load speed
• Images and pictures
• Animations and rich media
• Appropriateness of navigation choices, based on search terms

A search budget is an investment that drives revenue, directly or indirectly. Having your act together improves the leverage of your investment.

Your site, product mix, and prices affect user experience. Your search budget is only as good as your site lets it be. The money is already working hard. To make it work harder still, consider improvements you can make to the overall user experience. Turn a visit experience into a buy experience, or at least a decision experience. Move the visitor down that decision path with copy, navigation, the right price, and the right message.

Next, a series of columns about the marketing multiplier effect on SEM. The marketing multiplier effect can dramatically increase your profits on the same budget or help justify larger budgets to the executive suite (or to yourself, if you’re the boss). Stay tuned.

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