Tami Dowers just finished presenting a free seminar on SEM -- search engine marketing, in case you were wondering. Specifically, we learned about how to use paid search ads to drive targeted traffic to a website.
We learned about Google Adwords, Yahoo! sponsored search, and bing search ads. Setting up these ads, Tami said, is like going to an auction and buying a chair. "Except in this case, the auctioneer will take into account how enthusiastic you are about the chair, and how well you're going to use it when you get it home.
In other words, the quality of your website and ads matter to the cost as well as the effectiveness of your search ads.
So your process needs to begin with three considerations.
First, your budget. Google will suggest an Adwords budget for you if you ask, but their recommendations may be a big rich for most budgets. Tami shared an example in which they recommended a budget of $40,000 a day. Onsharp went with $500 a month, and the client is getting great results.
Tami recommends looking at what you're currently spending on direct mail or other marketing efforts.
"I hear people saying that SEM is expensive," she says, "but I think they're not tracking the ROI of their other marketing efforts." A $500 postcard mailing that brings in five customers is costing $100 per conversion. A trade show that costs your company $2,000 for the booth, materials to give out, and travel may bring 15 customers -- and the cost per conversion is over $130 per conversion.
Often, this kind of expense isn't even measured in terms of cost per conversion. The costs disappear into the overall marketing budget, or into specific line items like travel or printing, and the company never realizes what their cost per conversion really is. SEM allows you to track and measure those costs with a high level of accuracy. With that kind of information, you can also tweak your campaigns and put more of your marketing budget into the things that give you the best return. You can even set a target for your cost per conversion, based on the value of a new customer, and work toward that goal in an organized way.
The next thing to consider is your targeting. SEM allows you to focus on customers in particular places, people who are looking for particular things -- not just people in your zip code. You have so many options for choosing keywords and targeting ads that you can narrow in on the customers who are most likely to want exactly what you have to offer.
"If I have a lead in my pocket right now," Tami asked, "what would you be willing to pay for it?" The value of that lead is higher when it's someone who actually wants to buy your services than if it's simply someone who happens to live in your neighborhood or read a particular newspaper. SEM is "pull marketing" -- people are actively looking for you when they come to your website. Compare that with "push marketing," which is what you get when you put an ad on TV. People who see your ads may or may not be interested. They may leave the room just when your ad comes on. They're not out looking for information on your goods and services, as those who come through SEM are.
The third thing to think about for SEM is conversion tracking. You can set up your page and your campaign to measure people's interest very closely. This can give you -- in addition to sales and new customers -- extremely useful information about how people interact with your website and your product. This information can be valuable enough in itself to make an SEM campaign worth doing.
Plus, the high degree of measurability and control in SEM allows you to adjust your campaign as it goes along, to increase your chances of success throughout the life of the campaign. This is not an option with a print ad or direct mail campaign.
How do you measure success? Tami's slide above shows some of the ways a company can measure the success of an SEM campaign.
Wanamaker's famous claim that he knew he was wasting half his marketing budget -- he just didn't know which half -- doesn't apply to SEM. Each business has its own ways of identifying success, but all businesses can tell exactly what their return on their investment is with SEM.
The webinar was recorded, so you can contact us if you'd like to see it. We'd also be happy to talk with you about your own web marketing needs. Call Onsharp at 701.356.9010 to get started.