Posts Tagged ‘Search Marketing’
SEO forums such as WebmasterWorld are abuzz with the prattling-on of search engine optimizers who are debating how to take advantage of this latest update. I can’t respond to this chatter any better than the excellent advice of Vanessa Fox on Search Engine Land:
Focus on what Google is trying to accomplish as it refines things (the most relevant, useful results possible for searchers) and you’ll generally avoid too much turbulence in your organic search traffic.
On the heels of this update I have had various conversations with local businesses who hope to achieve top ranking for competitive keywords. To those businesses I have two pieces of advice:
- Play to your strength – focus on local optimization.
- Invest in content, not SEO.
Play To Your Strength
Google and other search engines are getting increasingly better at recognizing local intent in user’s queries. For example, if I do the query “industrial supply”, I get Google local results after the first two listings. I was talking to a client recently who has a small business selling industrial supplies and hoped to show up on the first page of results. Maybe it would be possible for a small business to show up on the first page of organic results, but not without a considerable investment in link-builing and content development. On the other hand, the competition for local results is not that strong.
Many SEO consultants will take your money and do their best to improve your ranking in the organic results, but the return on investment is likely to be much better for local optimization, and you are less vulnerable to the whims of the next Google update. Look for a marketing consultant who has experience with local optimization, or read up on Mike Blumenthal and Matt McGee and work on it yourself.
Invest In Content, Not SEO
Or, at least, invest more in content than SEO. The goal of a search engine is to deliver the page that best matches a user’s query. There are a number of best practices that help ensure that a search engine can crawl your content, and that you are getting credit for the good content you offer. But pick any one of those and I can find an example of a page with good content that doesn’t comply and still shows up in the top results. It is possible to game search engine algorithms and rank well with poor content, but the safer and better long term investment is to provide content that is useful to searchers.
I was responsible for SEO for the social/local community Guidespot.com (my involvement ended about a year and a half ago), and we did incredibly well in organic search. But my job was easy, because we were investing a lot in fostering good content. If you are striving to achieve a top ranking, you should ask yourself if your content is more comprehensive, funnier, more informative, more engaging or in some way better than all of the other content on the web. If not, you are polishing a turd, as the expression goes.
I don’t think it is possible to give an exact ratio, but if your SEO budget is more than 1/10th of what you spend on content, you are probably spending too much.
In summary, you should not care about any given algorithm update if you are a small, local business. Focus on showing up well in local search before trying to compete with large, national businesses in the organic search engine results, and invest in good content on your web site if you want to attract visitors.
Along my meandering path, I had many opportunities to interact with brands and retailers. You’ll also notice that word-of-mouth played heavily into my decision. And this is not just anecdotal – there is a lot of research to support the fact that most purchasing decisions are heavily influenced by word-of-mouth. Also, my cartoon illustrates the interactions I remember – but there are many brand and business interactions I don’t remember. For example, several local retailers are very active in the local running community, including online forums. I tend to think of those businesses as authoritative, even if they are not speaking directly to my current interest. There are also race and athlete sponsorships that create a positive association with brands, even if I don’t consciously remember them.
The lesson here is that much of what happened prior to my purchase was not directly measurable. In fact, if someone were measuring, they would probably think that search advertising or organic ranking accounted for my purchase, but I had all but made my decision at that point. Online reporting tools are good at measuring search clicks, but not so good at measuring everything else that happened prior to that last search.
There are some reporting tools that do a better job than others of measuring all of the interactions that lead to a conversion. See some of the great research done by the Atlas Institute for more on this topic. (Disclosure: I used to work for Atlas, but the research is still great.) I’ve found both Atlas and Omniture Discover to be very useful when trying to understand buyer behavior, but both of these are too expensive for small businesses. Unfortunately, Google Analytics does a poor job at this even though it is a very powerful tool in many respects.
The solution for small business lies in combining online conversion data with other on- and offline sources, such as a Facebook Insights reports and “how did you hear about us” questionnaires. Also, engagement metrics such as time-on-site and bounce rate can be very useful indicators. At Two Octobers, we produce our own dashboard reports that draw from multiple sources to provide a more complete and accurate view. We pull it all together to show how all online activities and channels are contributing to business goals. There is no exact formula – the right combination of data sources and indicators depends on your business model and marketing methods.
If you know of other useful tools and techniques, please comment below.
Internet marketing is targeted. In contrast to the 30 second network TV spot, the internet allows marketers to target messaging by medium, location, topic, demographic and a variety of other factors. Yesterday I tweeted that I want to be a firefighter when I grow up. Today I was followed by @firefighterjob in Twitter. Most of the ads that appear in Facebook as I browse around are local to me or specific to my interests. In fact, I spent some time convincing my dad that there are ads in Facebook at all. He had seen them, but he didn’t recognize them as ads.
But not all advertisers take advantage of these targeting capabilities. And not all web sites encourage targeted ads. Going from one web site to the next can be like going from New Hampshire to Vermont.
When you drive across the border from New Hampshire in to Vermont, the landscape becomes friendlier, more compelling. At least that is what visitors said to me when I lived there. Then I would explain to them that Vermont doesn’t allow billboards. And a light would dawn, and they would say “Yeah, you’re right. That’s nice!”
Google.com is kind of like Vermont, in that respect. They have never allowed any kind of advertising that doesn’t fit in to the landscape. The ads that do appear don’t use color or presentation in a way that make them stand out from other content on the page. In fact, most of the ads appear along the right hand side, which is visually the least obtrusive real estate on the page. Google also seeks to make all ads relevant to a user’s query. Most other search engines have followed Google’s lead, but their progress has been slower than some of us would like.
Historically, Yahoo has been more like New Hampshire, allowing run-of-site ads that appear for all users, relevant or not. The good news is that Google’s approach generates better ROI for advertisers, and ultimately more revenue for Google, so Yahoo has been following Google’s lead and cleaning up of late.
What does this mean for marketers? Placing ads that are not relevant is digital pollution, plain and simple. It’s pollution we have taken for granted and overlooked, but that is changing fast. Google, Facebook and other sites are teaching us to care about the relevance of marketing. This means that marketers who broadcast ads regardless of user’s interests or intent face increasing risk. The risk is that consumers start to see those marketers as polluters.
The word “pollution” may sound strong. Can you really compare a Classmates.com ad to a plastic bag stuck in a tree? I believe you can. We spend much of our working and non-working lives online. We spend time with friends and meet our future spouses online. Why then should we allow our online world to be populated with valueless clutter?
The bad news is that there will always be polluters, but the good news is that there are a variety of marketing methods that do not pollute, and in fact those methods generally get better results with less investment. Rich media and viral ads can entertain and inform. Social marketing creates bonds based on mutual interest. Search marketing answers questions. Just as businesses are adopting no-impact and sustainable business practices in the physical world, they can and should be translating this behavior to online. Not only is it good citizenship, it is good branding.
Billboard graphic courtesy of Big Huge Labs’ Billboard Maker
This article explains some basic concepts related to bidding on paid search keywords based on return on investment (ROI). Using ROI to make bidding decisions helps ensure that you are spending your advertising dollars in the most effective ways possible.
To explain these concepts, we will use paid search marketers Jane and Lisa as examples.
- Jane’s goal is to generate as much revenue as possible, but she doesn’t want to spend more than a dollar in advertising for every $5 in sales.
- Lisa’s goal is to drive as many leads possible at a cost per acquisition (CPA) of $10.
A few definitions to start things off:
- Click – a paid search click bought on Google, Yahoo or Bing
- Conversion – a click-to-sale conversion. A conversion is when someone clicks through to your site, then completes a purchase. This could also be a click-to-lead conversion if your goal is to drive leads
- Conversion Rate – the percentage of time clicks convert to sales. For example, a conversion rate of 5% means that 5 out of every 100 clicks result in sales.
- Average Sale – the average value of a sale
- ROAS – return on ad spend: the return in sales you are getting on your paid search investment. I will calculate this as $X in sales for every dollar spent
- CPC – cost per click: what you are paying per click in Google, Yahoo or Bing
- Target CPC – the cost per click you should be paying to achieve your target ROAS
Here’s an example scenario: Jane is paying $0.10 per click, 10% of clicks are converting to sales, and her average sale is $5. This means that on average she generates $5 in revenue for every $1 she spends to buy clicks. Therefore, her ROAS is $5.
If Jane is ok with a lower ROAS, she can generate more sales. Spending more per click will lower her ROAS, but the higher CPC will also drive more traffic. For example, if she can achieve her profit goals at a $2.50 ROAS, she can afford to pay $0.20 per click. Here is the math:
ROAS = Sales / Ad Spend
= (Average Sale X Conversion Rate X Clicks) / (Clicks X CPC)
= (Average Sale X Conversion Rate) / CPC
Solving for CPC, we get:
Target CPC = (Average Sale X Conversion Rate) / Target ROAS
Substituting Jane’s goal for ROAS, we get:
Target CPC = ($5 X 10% / $2.50) = $0.20
The process is similar for Lisa. Cost per acquisition is total cost divided by the number of acquisitions, or:
CPA = Ad Spend / Conversions
= (Clicks X CPC) / (Clicks X Conversion Rate)
= CPC / Conversion Rate
Solving for CPC, we get:
Target CPC = Target CPA X Conversion Rate
Substituting Lisa’s goal for CPA and assuming a conversion rate of 10%, we get:
Target CPC = $10 X 10% = $1.00
These calculations are pretty straightforward, and many paid search marketers use some variation of these methods. There are also a number of automated bidding systems that have formulas like these somewhere under the hood.
One assumption we’ve made is that we know Jane and Lisa’s conversion rates, but that is not necessarily a safe assumption. To learn more about the challenges of estimating conversion rates, have a look at this article: Paid Search: Bidding with Confidence.
And if you do not currently have the ability to track leads or sales to a keyword ad, Google Analytics is free and will do the job. If you would like help tracking performance or optimizing your paid search campaigns, have a look at our services, or contact us.