Wednesday, November 07, 2007

How to get a Bigger SEM Budget


In a recent Search Insider post, Gord Hotchkiss asks the question: "Will Agencies Get Search?" After making a convincing argument that search "blows away other channels"—because it makes your product service easy to find when buyers are actually looking for something like it, rather than interrupting them while they are doing some else (which is what most advertising is about), Hotchkiss identifies four reasons:
  • Search is small.

  • Search is measurable.

  • Search is hard ("You’ll never hit a search home run with one inspired brainstorm...You just keep plugging away, tweaking keywords and pulling in prospects").

  • Search is utilitarian.

And concludes by saying "And for all these reasons, I don’t think big agencies will ever truly get search." Maybe he's right, and big agencies won't get it (though smaller agencies, like the one I work for, certainly do). And the more interesting question to me, in looking at the four points above, is: why don't advertisers spend more on search? It's generally not a terribly expensive proposition, the results are easy to track, it's generally not a core competency of the internal marketing team, and, again in the words of Hotchkiss, "search works because it’s the customer driving the process, not the advertiser."

Yet according to Forrester Research, "While 87% of B2B marketers we surveyed last year said that they use email in marketing, most lagged behind in adopting interactive tactics such as search (57%)." Given the advantages of search engine marketing (cheap, measurable, effective), why do nearly half of B2B companies ignore it?

I believe the answer is that a lot of advertisers have had bad experiences—not because SEM isn't effective, but because campaigns were poorly implemented. And when that happens with search, the numbers are obvious. If you produce a lousy campaign in a medium that's difficult to measure (e.g. TV or print), it may not be apparent. But because search is extremely measurable, bad results are front and center: low click-through rates, high cost per click, and worst of all, poor conversion.
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So to return to my question in the headline—how do you get a bigger budget devoted to search? In two words, easy to say though not easy to do: earn it. As an example, I was asked several months ago by a client to take over a floundering SEM campaign. The return looked awful at the time, and Google was helpfully "recommending" that the daily search budget be increased by 67%. There was no way, quite understandably, that the company was going to throw good money after bad by heeding that suggestion. I was asked to fix it or shut it down.

Three months later, cost per click had been reduced by nearly 20% (through bid optimization), the click-through rate increased by 25% (better ads), lead count was up 13% (landing page optimization), and most importantly, cost per lead decreased by more than 30% (following SEM best practices).

Furthermore, through day-parting, bid optimization, and dropping non-productive search network sites, Google's budget increased recommendation was cut in half. With search now producing demonstrable results, the client was happy to increase their search budget by 33% to maximize both brand exposure and leads.

So, returning to the question Hotchkiss asks, "Why don’t more ad agencies and brand advertisers get search?,” we see a vicious cycle at work: because (some) agencies don't get search, their campaigns produce poor results. Because results are poor, clients won't increase their budget allocations. And because search budgets are small, agencies won't invest in becoming experts. Clients deserve better.

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Contact Tom Pick: tomATwebmarketcentral.com

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