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Gary Angel brings over twenty years of experience in decision support, CRM, and software development, to SEMphonic. Gary co-founded SEMphonic and is president and chief technology officer. He's responsible for leading SEMphonic's development of Web analytics and SEM decision making tools for web marketing professionals. In addition, he helps companies like WebMD, Intuit, American Express and Charles Schwab maximize their web channel marketing through intelligent use of Enterprise Web Analytics

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SEM Marketers are Missing Out: Seven Ways to Mis-Measure Your SEM Program

Written on
Jun 12, 2006 
Author
Gary Angel  |
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SEM Marketers are Missing Out: Seven Ways to Mis-Measure Your SEM Program

Just how good is your Search Engine Marketing program? The only way to know, of course, is to measure it. But if, like many organizations, you rely on the standard reporting from an agency or PPC Bid-Management system then there’s a pretty good chance that you’re getting a partial or even seriously wrong read on your actual performance. In addition, you’re probably missing out on several measurement strategies than can significantly improve your PPC optimization and your overall SEM program balance.

Most companies these days have a web analytics solution in-house from a vendor like WebSideStory, Omniture or WebTrends. These are pretty good tools — and their sole function is to help understand web site performance and visitor behavior. And chances are that these same solutions are used to measure every aspect of web channel marketing except Search Engine Marketing.

For reasons both real and historical, Search Engine Marketing (SEM) activities have been walled-off from the rest of the web channel. Not only is the Search Campaign usually executed by outside buyers, these buyers and site optimizers are often managed by separate units and they use their own measurement tools and techniques. In most cases, the stated rationale for this is the need to have real-time analysis of conversion behavior channeling into a Bid Management system (more on this later).

This has led to significant duplication of effort — as organizations slap multiple tags on pages and create redundant organizations to understand and optimize the results. Perhaps worst of all, it has greatly increased the chances that SEM programs are optimizing locally instead of globally — achieving performance either at the expense of other goals or channels, or performing against goals that turn out to be meaningless to the business.

Here are some of the most common mis-measurements and missed opportunities that beset Search Engine Marketing programs.

Organic Cannibalization and Support: The degree to which a PPC program may be “borrowing” clicks from organic listings can have a dramatic impact on the perceived ROI of Paid Advertising. Knowing how many of your PPC visitors would have come to your site via an organic link is essential to understanding the actual value of a search term.

In our numerous studies of this issue, the most common result was significant organic cannibalization of “brand” terms and highly-positioned (top 3) organic terms. However, the degree of cannibalization varied widely (and could even provide support). In addition, this cannibalization was always accompanied by true incremental lift from PPC.

This last point is made much of by the various Search Engines in their marketing — and they address the issue of organic cannibalization with nearly identical data showing this undeniable lift. This “Yooglesoft” take on cannibalization misses the point, of course. Program managers need to know the real cost of incremental lift by search term or they can’t effectively manage their programs. Incremental lift is only desirable within some price range — and you can’t figure out the real price of the lift unless you understand the depth of cannibalization.

There is no one right answer about the extent or importance of organic cannibalization — there is only the right answer for your organization based on actual measurement. Most enterprise web analytics systems can do this type of analysis easily — and provide you with a significantly better understanding of your PPC programs real ROI than you’ll get from looking at your basic PPC statistics.





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