Continued from page 1
Generic search terms heavily dominate buyers “search vocabulary". There has been a big movement (especially prominent among pay per click search advertisers) that belives bidding on “generic” search terms is a waste of money and if you do bid on those terms you should maintain lowest possible bid price. If you are one of those advertisers/search marketers that believes in this idea…… guess what? You’re absolutely dead WRONG.
This study finds that searchers prefer to use generic search terms up until very late in buying decision. Although there is some lift for brand specific searches directly before purchase, impact of those brand specific searches (i.e. “the brand name search” as I like to call it) is minimal compared to generic terms. In my opinion, I would consider all brand name searches occurring during subsequent searches (by same user) to be a direct result of branding impact of search marketing in general.
Adapt to using generic terms and use them to your competitive advantage. Still you must account for your cost on generic terms. The search volume is much higher on generic terms which means a greatly increased number of clicks to your site and more money spent on your pay per click ads. How do you manage ad spend for search then?
One click can NEVER equal one sale.
Common misconception among new search marketers is that, “I got 30 trillion clicks and not one sale". I see this all time in search engine marketing forums. Especially when people complain about pay per click traffic.
Look here’s a slice of reality. Searchers will come to your web site many times over a period of weeks before they decide to buy from you. It’s a part of general Internet user behavior. Many people are still leery about online shopping. It is becoming more acceptable and mainstream as each day passes but you need to realize that clicks you got today might result in sales weeks, or even months from now. If you are not tracking that users multiple visits to your web site somehow then how are you ever going to account for conversions and calculate right ROI?
Every search marketer needs to justify his or her ROI. They need to track sales to search engine traffic over a period of months, not days or hours. One click does not, will not, and will never be, equal to one sale. If it worked that way I would retire tomorrow and leave country for a tropical destination never to be seen or heard from again!
Track everything over a long period of time. Implement cookie tracking that can tag IP and original visit date of your web site’s visitors, as well as, information on how that user was referred. Re-evaluate your search marketing on a monthly basis and assuming you are optimizing your titles, descriptions, and landing pages properly you should see your ROI steadily increase over time.
Lastly, to get full benefit of understanding your core metrics for search marketing, adjust your ROI calculations based on average number of visits to your web site by same user. How many visits (by same user) on average does it take for your web site to convert a sale? You can build this profile and see trend over time. Soon you’ll understand how some companies can spend thousands of dollars every day on search marketing/advertising.
They have figured out how to calculate their ROI properly:
Average # of Visits By One User Before A Sale = Total Clicks Needed For A Sale # Of Clicks x Cost Per Click = Ad Spend Needed For A Sale Cost of Product + Ad Spend = Total Cost Per Sale (Figure in whatever else is appropriate here based on your costs) Profit Per Sale - Cost Per Sale = ROI +/-
With formula above you should be able to adequately figure out how much you can spend (even on a keyword by keyword basis) on pay per click advertising and still get a positive return on your advertising investment. As long as you are making $0.01 more than you spend on advertising then I consider that a success. Hey, we all want to do far better than that but it sure beats losing money on advertising.
Now go download study above and read it.
Joe Holcomb is a seven year veteran online marketing and web site development. He currently serves as Senior Vice President of Marketing for meta search engine, BlowSearch. His personal web site and weblog can be found at AGoToGuy.com.