In fact, our society and culture celebrate success to such a ridiculously high degree that we forget that the real knowledge and wisdom come from failing, not from succeeding. The key to making failure work for you is to fail fast – as quickly as you can, in fact.

I was reading an article recently that talked about the HP TouchPad. The what? Exactly. HP built and released this tablet in the wake of the hugely successful iPad release. It flopped.

But rather than struggle to gain market share with the device, HP promptly killed it. A failure, yes. But that failure would have cost exponentially more had the manufacturer continued to throw valuable resources at this effort. And, in the process, HP learned some valuable lessons about the tablet computing space.

In fact, the failure led the company back to an increased focus on the imaging business rather than computing hardware. Conversely, there are numerous stories of companies that didn’t fail fast enough and it cost them dearly.

Think about the recent digital transformations of music and photography and the companies that clung to old business models because that’s what they knew best.

So, how do you fail fast?

The first thing to do is to learn to embrace failure in its many forms. Many people confuse this with lowering our standards or expectations in outcomes, but that’s not what I’m suggesting here. I’m not recommending that we become careless or lax in our execution.

On the contrary, I’m insisting that we relentlessly pursue the most effective way to deal with failures when they inevitably do turn up. Acknowledge them, examine them carefully, work through them efficiently, and move on with the new experience and knowledge that you’ve gained from them.

The fact that failure is valuable plays right into the hands of search marketing. If you think about your key metrics – conversion rate, for example – we’re all failing at an alarming rate on a daily basis. Good retail campaigns have a conversion rate of anywhere from one to three percent.

That means that in a well-performing campaign you’re failing 97-99% of the time. And that’s success!

But rather than obsess over the conversion rate itself, we should be looking deeply at the drivers of success and failure and what we can learn from them.

In this spirit I am listing some tips to help you fail fast in search marketing:

1.  Set Up A Testing Budget

Let’s say ten percent of your total PPC budget. Use this budget to test new targeting options, keyword expansions, display network settings, retargeting, new bidding strategies, whatever. Most of these tactics will fail. Perfect!

2.  Build A Testing Calendar

This will help you with the ‘fast’ part. Set a hard deadline, either financial or time-based, to try each new tactic. Stick to the calendar. Move quickly. If a test is dragging out beyond the deadline, kill it and move on to the next.

Keep a Testing Calendar and Stick to It

3.  Analyze Your Tests

On your testing calendar set aside time to analyze the last test as you’re launching your next one. This part is critical – it’s where you learn from your failure.

4.  Record Your Findings

Build a document that details your learnings. Maintain it. Keep it alive. This is your ‘best practices’ document and it’s wisdom. It’s what you have to show for your experience. Use it as a playbook for launching campaigns, trying new tactics, and documenting your analyses.

5.  Spread The Wealth & Keep This Process Going

Show others in your organization how much your experience is paying off. Get everyone used to the idea that failing fast is the most direct path to success!

I’ll leave you with a couple of my favorite quotes on success and failure.

First, from Michael Jordan, arguably the best basketball player alive:

“I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. Twenty-six times I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”

And, from Thomas Edison, one of the foremost innovators in US history:

“I have not failed. I’ve just found 10,000 ways that won’t work”

See, I’m a bit unorthodox when it comes to brand terms and their keyword space. I read a lot around here about how search marketers should deal with brand keywords – don’t buy, don’t allow them to be bid on, don’t include brand terms’ PPC data for the purposes of analysis, and so on. As well, I’ve written about how we (and others) have done some basic analyses to determine if it’s worthwhile buying brand terms on top of #1 organic results.

All good advice, mind you, but there seems to be one fact lost in all this. Branded search queries always perform better than any other tactic in the known marketing universe. So why would any marketer willingly turn his back on this ridiculously bountiful inventory and allow nary a brand keyword query go to waste? After all, they’re worth their (digital) weight in gold!

Don’t get me wrong. I don’t want everyone bidding on my brand terms, but I do want to capture every user I can who might be searching for me. Believe it or not, affiliate marketing is a great way to capture those ‘lost’ search query impressions.

Don’t take my word for it. Look at your data. What’s your CTR on your brand terms, paid and/or organic? 20%? 30%? Great! But what about the other 70% or 80% of those impressions? Sure, some brand searches are bogus and unintended. But there have to be some valid prospects out there who ended up clicking on some other link, or getting distracted and going away. Go get them now – don’t wait!

I’m not suggesting that we marketers open the brand keyword floodgates and let just anyone reap the rewards of our hard-earned brand equity. So please don’t go out and open up an account on an affiliate network and give everyone free reign on your treasured marks. Rather, plan out an ingenious, elegant set of well-monitored policies and go forth into your keyword space with profitable confidence.

A while ago, I wrote an SEL column on SEM and affiliates, but as a refresher, allow me to summarize:

1.  Affiliate Program Design

Know your affiliates, at least the ones you’re granting access to your brand terms. Talk to them. Set policies intended to maximize your yield while protecting your brand. Think about direct linking vs. indirect linking to your site. Let your conversion rates be your guide.

Here is an example of how we use our affiliates to add value to our brand terms. In this example, Yahoo maintains top position on a brand keyword and allows affiliates to capture incremental brand inventory to increase our yield:

Sharing the SERP with Affiliates to Maximize Page Yield

 2.  Use An Affiliate Network

Many big brands want to take this on themselves. Don’t be tempted. Pay the extra cash up front to handle all the administrative details. You can always pull the program in-house down the road if there’s a real business case for this.

3.  Monitor What’s Going On

The major affiliate networks partner with service providers who can enforce your policies and automatically notify you of any violations. You’ll need someone dedicated to paying attention to violators and notifying the networks and/or the affiliates directly.

4.  Don’t Just Set It & Forget It

Know your data. Analyze the effects of your affiliate policies using real, comprehensive search data. Adjust your policies as needed. Then see how those adjustments affect your metrics. Your affiliates will comply, and your yield will change accordingly. Rinse and repeat.

5.  Go Beyond Branded Keywords

Once you have this down, go beyond your branded keyword space and extend your expertise out into the great beyond. For example, we have one SEM campaign where we actually have a PPC affiliate competing directly with our in-house program (shout out to Paul and Dan!). The affiliate is able to focus on a fundamentally different keyword space than our in-house program, truly complementing our in-house efforts – that’s good stuff!

In summary, the age-old question of “wouldn’t those users searching my brand term just find my site anyway?” isn’t really worth asking anymore, because as we now know, that’s not how the math works.

In my opinion, as brand owners, we need to find everyone who’s interested in the brand we’ve worked so hard to build. Affiliate marketing is just one of many ways to extract our brand equity. It’s time to buck the conventional wisdom and test your branded keyword waters.

The majority of large enterprises engage in annual planning, which means that as SEM managers, we are tied to pretty strict financial goals. While all the advanced topics sound good and do warrant execution, in a world of limited resources sometimes we just need to hunker down and focus on hitting Plan.

At one point sooner or later, all search marketers will find themselves challenged to reach their financial goals for a variety of reasons, but always because some number of conditions have changed from the time the Plan was built until the present. I’ve written in the past about how search marketers who build annual plans are constantly faced with this because, for example, we will be building our own plans for Q4 of 2013 before we’ve seen the whole of Q4 2012.

There are many conditions that can change between now and then: search engine marketplace dynamics, conversion rates, site monetization, and competitive landscape, to name a few. That’s why for enterprise-level marketers, I’ve always maintained that we need to make our budgets mobile – that is, we have to be able to move funds from underperforming campaigns to more profitable ones.

But aside from that strategy, what are some tactics we can employ now, half way through the quarter, within our existing programs to ensure that we hit (and beat) our Plan?

Keyword Growth

There’s plenty of time left in the quarter to drive profitable growth from keyword expansion if your business can support it. In our world, we’ve invested substantially in our ability to execute on keyword growth strategies for this reason. While this can be a complex process, there are a few critical aspects that are currently attracting our focus.

First of all, it’s important to find new and reliable keyword sources. Mine your own sites’ query logs. See what people are searching on in your own site and use those keywords. Leverage search query reports supplied by search engines. Find out what keywords your SEO program is producing (which words users are searching on to find your site) and add those to your PPC campaigns.

Note: Don’t assume that any SEO keywords (especially brand terms!) you add to your PPC campaigns will necessarily cannibalize your SEO traffic. We did some research on this and found, at least in this case, that the opposite was true. Note below the positive correlation between the CTRs of the paid and organic listings. Find out for yourself!

Buying a PPC Ad Can Sometimes Increase CTR on Organic Listings

Next, among other things you’ll need to figure out what bids to assign to these new keywords. If you have any data on keyword level monetization, use it to set your opening bids. If not, look to page- or category-level monetization signals to inform these all-important initial CPC bids.

Get them right and you can start driving incremental profit immediately. Get them wrong and you’ll either get nothing at all (bid too low) or you’ll spend all your precious budget on unprofitable keywords (bid too high).

Content Is King

It’s likely you haven’t paid much attention to your content campaigns lately. Dust them off and see if you can build them out and/or optimize them. Contact your search engine reps and see if they can lend a hand with building you some new ones. You can probably get some productive volume out of new content campaigns if you launch now and spend a few weeks getting them to profitability.

Keep it simple, though. Don’t expect to build and optimize graphical ads across a million placements. Sure, load up graphical creative (if you have it) alongside text ads, but craft your buy in such a way that you can then optimize it easily and quickly. Remember, you don’t have infinite resources.

Outsource, Baby!

Speaking or constrained resources, we use a combination of in-house and third party resources to make our SEM programs hum. Your internal resources are probably already maxed out, so it’s time to look to your agencies, tools providers, search engine representatives, and other contract resources to dig in extra deep and unlock the untapped potential living in your campaigns.

Leverage them for keyword expansion, creative optimization, even bidding strategies to squeeze that extra profitable volume out of your programs. Outsource, baby!

Follow Your Head

We spend a considerable amount of time working on tail keyword management strategies that can add incremental revenue and profit to our portfolio. If you stop and think about the ROI on your incremental efforts here (especially during crunch time), they will likely point you back to the head portion of your portfolio. This is no time to get bogged down in the minutiae of your tail keywords.

Instead, spend your time looking at the volume-generating head keywords that drive your program. Look for head terms that are highly profitable but that aren’t in top position. Bid them up to get extra click volume until they’re at as low an ROI as your goals can tolerate.

Here’s a trick: for high-velocity keywords, try breaking them up into smaller biddable units, using all the targeting options that search engines offer: match type, geotargets, dayparts, weekparts, device settings (tablet, iPhone, etc.) and network distribution settings. This makes your head more efficient, freeing up budget to spend on other expansion and growth efforts (see above).

Hopefully you’ve now got a few more tools in your belt to drive additional profit to your programs. Don’t worry, there will soon be time to go back to more advanced topics, but for now, don’t get cute and don’t try to be a hero – just focus on The Plan.

Within these demos, we talk about thin data, dynamic clustering, Bayesian math and other light topics such as attribution management, profit curves and media mix modeling.

The reason I do this, other than the fact that I like to hang out with both sales people and applied mathematics PhDs, is that for certain businesses at Yahoo!, is because we’ve historically built some of our own in-house search management technology. As such, I have to keep track of the latest developments and features in the enterprise SEM management tools market.

Truth is, these tools have come a long way in the past couple of years and they’re aggressively coming after large enterprise SEM campaigns like the ones we manage. Since most people don’t have the opportunity to build in-house SEM tools, I thought my experience here might benefit those who are considering building and/or buying tools.

Who Needs Enterprise SEM Tools Anyway?

Let’s take a step back first. How do you know if you should be using Enterprise SEM Tools? In my experience, there’s a somewhat logical decision tree here.

Ask yourself a few simple questions: First and most importantly, is SEM core to my business? Another way to think of this is, does SEM provide the majority of my business’ revenue?

If yes, then strongly consider building your own tools but beware, it’s a big, expensive commitment so you better have significant SEM revenue (and corporate backing) to support it.

If you answered “no”, then consider head count constraints. Can you hire, train and maintain an in-house PPC team or would it be more advantageous to outsource SEM to an agency? If you’re still leaning toward in-house management then you should think about scale. How big is my program? Is this US only or multinational?

The bigger and more complex your program is, the better a candidate you’ll be for an Enterprise SEM toolset. So, how do you choose a tool?

A few examples of Enterprise SEM tools providers

Integration: Know Your Data

Regardless of what tool you end up with, there’s going to be a data integration of sorts. For large companies with proprietary data systems, or in places where conversion events have variable, dynamic revenue attached to them, this can be a big deal.

If, however, your company is selling widgets or subscriptions to widget services, the integration will be less onerous, as you can probably cover this requirement with a third-party tracking system (and many enterprise SEM tools have their own tracking technology if you don’t).

All that said, having been through at least one failed integration, I’m here to tell you that this is critical. Get it right, and you can move on to actually using a toolset. Get it wrong, and you’re back to square one.

So before you even entertain an engagement with a tools vendor, get control of your conversion or revenue data (the cost data will come from the search engines directly, so don’t worry about that now). Understand where the conversion data comes from, what it looks like, how often it’s delivered, if there’s a database what’s the structure, etc., and how you’re going to deliver your data to the provider.

Also, you’ll need to understand URLs and how they’ll be handled by your internal data systems. Can they handle dynamic parameters, or will they need to be hard-coded? It makes a big difference once you get down to comparing tool feature sets so pay attention.

With regard to the integration itself, every tool provider will say they can handle it (whether or not they actually can), so the more you know about your data going in, the more skillfully you’ll be able to sniff out the posers and move on.

Problem Solving

Once you understand the data integration piece of the puzzle, it’s time to sit down and think seriously about what problem you’re really trying to solve. Is it most important to be able to report on SEM results globally to executives every month? Or it is paramount to optimize your search campaigns to a complex set of business metrics? Some tools are built to seamlessly integrate global enterprise SEM programs, delivering slick user interfaces with drag and drop custom report builders.

Others are built to drill mercilessly deep into your data stack to uncover the most obfuscated details of your data and leverage that to relentlessly squeeze the last basis points of operating margins out of your smallest optimizable unit of data. So how’s a search marketer able to make a smart decision? Most tools are going to have a bias one way or the other, so the more you have a feel for this going in, the better choice you’re going to make in the end.

Bake Off?

Ok, so now you have a good sense of your data picture, and you know what are the most (and least) important goals you have to hit, you’re ready to pick a provider. But how do you choose? I know, let’s give three tools providers different parts of my keyword portfolio at the same time, and see which one provides the best ROI.

Hold on a minute – this is where I tend to disagree with the way most search marketers operate. If you’ve done your homework, I think you should RFP a small number of providers and pick the one that best matched up with the criteria we’ve outlined above.

Why? First of all, because with search marketing it’s very difficult to do an apples-to-apples comparison if you’re splitting up a campaign (or a time period, or whatever). There are simply too many variables that affect the outcome of a program to pretend that this would be a fair comparison.

Secondly, and most importantly, you are a search marketer. It’s your job to make decisions like this, not to rely on some half-baked bake-off scenario to make the decision for you. Make a call based on what you know, and if you fail, fail fast, and try again.

Was this really happening? I’d been preparing all morning and patiently waiting my turn to speak as the last of four presenters on a panel, only to be interrupted three minutes into my presentation by a freaking fire alarm. I laughed aloud, gave a double thumbs-up to the modest crowd, advanced my presentation to the final ‘thank you’ slide, and left the building defeated, certain that my presentation was finished.

This was the scene on the last day of SMX West 2012, all of us standing awkwardly outside the hotel conference hall, wondering what was going to happen next. How did we find ourselves in this bizarre reality? Let’s go back and have a look at the session that nearly wasn’t.

A “Hot” Panel: Enterprise SEM – Maximizing ROI

Right in my wheelhouse! Our moderator was Patricia Hursh, of SmartSearch Marketing, and fellow columnist here at Search Engine Land. I hadn’t seen Patricia since my time in Colorado nearly seven years ago. She’s a peach. There were three other presenters from the agency and tools sides of the business, and of course, myself.

First was Bill Staples from GroupM out of London. Bill is one of those guys I swear I’ve met before but can’t recall when, where or how. That’s what happens if you stay in the search industry long enough, I guess. Bill spoke from a client services perspective, looking deeply into what does and doesn’t work for large clients they service.

Perhaps the most useful tip Bill offered to the audience was to consider the fact that the executive to whom you send a search marketing report will likely be reading it on a blackberry or other handheld device, so it’s important to format the report for that purpose.

Keep the copy brief and get all the necessary data above the fold of the handheld screen, Bill says. Nice Tip!

Format Your SEM Reports To Be Read On A Blackberry

Other useful tidbits from Bill included the amount of a budget to devote to testing (5%-10%) as well as the amount of resources you should spend (20%).

Finally, Bill’s simplest, but most important guideline: Make sure to have a single key performance indicator (KPI) or success metric to which you can drive all search efforts. That goal could be ROI or volume or both, and by focusing all efforts on this, an enterprise’s chance of success increases dramatically. Don’t believe Bill, try it yourself!

Dave Ragals, VP Client Services at IgnitionOne, took a different approach and started with a review of red flags to look for when working on an SEM campaign. Red flags are a sign that your SEM accounts might need to be restructured. They include things like an overreliance on broad match keywords, poor thematic account structure, and an abundance of duplicate keywords in your accounts. Then he talked about what to do if you see the red flags and how to go about restructuring big PPC programs.

Dave had some great tips on how to staff a team to execute a rebuild, combining quantitative talent (no need to be a search marketer!) with SEM creative and marketing staff to find the perfect balance to get the job done.

Once you have your staff, Dave says, benchmark all your KPIs with the existing program before you start restructuring. That way you’ll know how you’re doing through and after the transition. The restructure itself is an exercise in best practices. Dave didn’t get so much into a ‘how to’ discussion, but did highlight some tools and approaches that work.

First, identify all the stakeholders and get buy in on KPIs. Then, he mentioned a broad match modifier tool that’s available, and recommended expanding into the tail, and finally plotting before and after curves so you can evaluate your success.

Efficiency Curves Before And After A PPC Restructuring Project

The only tip I would provide, and we didn’t have a chance to get to it, is that account restructuring is sometimes best done in phases to minimize impact at any given time. Good Stuff, Dave!

Mike Grinberg works with Nina Hale, Inc., a boutique search shop in Minneapolis. He talked about client management strategies that were honestly very interesting, though a bit less relevant for this particular Enterprise SEM column. He did, however, provide interesting points about tools and user access, and recommended that administrators purge all user accounts (on an opt out basis) at least once a year.

This safeguards enterprises and agencies against risk that stems from agency staff turnover and potentially disgruntled employees. Mike also had some interesting points on enterprises legitimately getting two ads served for a single query.

An example would be where a company offers both a product and a service, related to a single keyword, and has two different Web experiences, for the product and service respectively. In this case, Mike thinks there’s a good reason to have two ads on the SERP for a given keyword. Also, Mike happens to be really into Muay Thai, so don’t mess with him.

Then came my turn. You already know how it started – three minutes into a twelve minute presentation, as I was doing my song and dance about how valuation is the cornerstone to any direct marketing program, a fire alarm went off and we all exited the room. Once we were all outside, milling around, another announcement came over the loudspeaker saying that it was indeed a false alarm.

The amazing thing, from my perspective, is that the crowd returned into the conference room and I got to pick up my presentation where I left off, with enough time to finish it! How exciting (and flattering) for me! Never a dull moment at SMX…

A few takeaway tips from my presentation: When you’re running event-based PPC campaigns such as big sporting events, awards ceremonies or exclusive content premiers, get your campaigns up and running well before the event so you can start building account history. This gives you time to optimize your campaigns so when the event happens you’re well positioned to take advantage of the spike in search inventory.

Also, as usual I encouraged search marketers to engage with executives in the eternal debate about paid vs. organic search, but to try to steer the conversation away from philosophy and toward mathematics.  I’ve written about it in the past and you can read more here. The accompanying graph happens to be my favorite chart in the world. Enjoy!

To answer that question, I thought I would take a close look at how we’re working on one of our major marketing initiatives of the year: The 2012 Olympic Games.

The London Games is one of our big ‘tent pole’ events for the year. At Yahoo!, that means that it’s a major one-off event that gets maximum marketing support.

For the Games in July, Yahoo! has the ambitious challenge of attaining (and maintaining) the #1 position as the destination for all things Olympics-related, while not actually being an official sponsor. As you may or may not know, there are a limited number of Olympics sponsors, and if you’re not one, you can’t use catchy words in your ad creative like ‘olympics’. Interesting challenge indeed!

Despite our unofficial status, last time they lit the torch (in Vancouver), more folks came to Yahoo! to consume Olympics-related content than any other Web property. So, when planning for London, how can marketing (and specifically Search) support Yahoo!’s overall goal of maintaining our #1 stature in the pantheon of Olympics coverage?

Most important here for Search is what I talked about last month. Let’s review. I work in a functional group (‘channel marketing’) that interfaces with a more campaign- or event-oriented group (consumer marketing).

The challenge is to get in front of the planning process with consumer marketing in order to weigh in on channel-specific plans and allocations, thereby creating a cohesive integrated marketing plan.

What Are The Tools To Get This Done?

On our end, we do this by appointing a ‘channel lead’ for big events like the Olympics. The channel lead is a functional marketer who represents the entire channel marketing group to consumer marketing.

He or she is responsible for maintaining our group’s presence in front of consumer marketing, and perhaps more importantly, pulling together a channel-specific plan to support the goals of the consumer marketing group.

First of all, we need to appoint a channel lead, who is at a high enough level to effectively carry all of the channel recommendations and represent them to the consumer marketing group, while still doing a day job.

Probably best to be a channel owner in this case – that would be one of my peers in the organization – in the case of the Olympics it happens to be our email channel owner, Sue Coakley.

For this particular tent pole, Sue is responsible for pulling together all of our channel-specific plans, vetting them with us, and then representing the Channel Plan to the Olympics marketing lead on the Consumer Marketing side.

So what does Sue pull together? Everything. As a channel marketing group we discuss how to break up budgets and PPC allocations to support the various marketing goals. Impressions, clicks, conversions, UUs, App downloads; everything has to be planned out at this stage.

How much do we allocate to SEM vs. Affiliates vs. Display Media?

We have to work this out ahead of time, and then bring our recommendation back to the consumer marketing team. What we’re then left with is a detailed plan that shows how we’re going to contribute to company goals for this event, and going forward, it’s what we’re signing up to deliver. Accountability – what could be better?

In some companies, there is an Integrated Marketing Lead (IML) that sits above this whole process (as in the illustrations). He or she becomes necessary when there is a B2B or offline component to the campaign, and additional coordination is thus necessary.

SEM Engages with Consumer Marketing

How  Does Search Marketing & PPC Fit In?

Again, it depends on what the goals of the larger marketing group are. Here are a few examples: If the goal is to be #1, there is a lot Search can do to drive traffic and engagement to the Games experience on Yahoo!.

It turns out, to no surprise, that the effective CPC to bring a search engine user to the site is low relative to most other marketing channels. Additionally, there are going to be Yahoo-original features to go along with the games. I can’t share details on these feature sites, but you’ll see them as we get closer to the games.

In buying related keywords, we can drive targeted traffic to these feature properties, increasing engagement and usage of these assets, which again contributes to our goal to be number one.

Another example is mobile search and app downloads. Before and during the games there will be demand for Games-related apps, to track medals, athletes’ performance, etc. on people’s mobile devices. Perfect application for PPC, capturing demand and optimizing to a specific conversion event.

Now we’re talking!

What About Budgeting?

Ah, budgeting. In a perfect world, Search (and other channels) can do a complete bottom-up budget build based on well-defined goals and performance metrics. This way budgets for events are allocated rationally, based on which channel can perform against a given profitability metric. That’s the beauty of the engagement model above, it allows for this type of utopian planning.

In reality, sometimes we’re handed a budget and we have to make the best of it. Most of the time, we land somewhere in between, where channel-level budgets are loosely defined, and channel owners are able to move budgets back or forth depending on their channel’s ability to deliver. And just for the record, that works for me!

The bottom line is that you can make any organizational model work if you have the right people in place – smart, flexible people who can see the big picture and draw the right amounts of dotted and hard lines to ensure accountability and align incentives.

Let’s go ahead and take a deep dive into a couple of these models and how they shake out in real organizations.

Centralizing Around SEM & Other Marketing Channels

Centralization makes the most sense if you have new marketing leadership (new CMO, SVP, etc.) and Marketing needs to establish its own identity within a company. This is what happened at Yahoo! when we hired a new CMO several years ago. We had been without one for some time, and the incoming CMO wanted to build a global, integrated marketing team.

We accomplished this over time and in doing so we rebuilt most of the marketing functions at Yahoo! with a global perspective. In our direct marketing group, we even had one person devoted solely to ‘international’, making sure that our direct marketing best practices were disseminated around the world to regions like APAC and EMEA.

So what does this mean for managing PPC in a centralized marketing organization? Mostly, it means that SEM likely follows a ‘shared services’ model. In this model, our SEM teams work more or less as an internal agency, engaging with the various business units (BUs) as internal ‘customers’.

Because we don’t report to the same people as our customers, it’s critical to maintain clear communication channels. If you’re in this world, make sure you have regular face to face meetings with your customers, and you have well-oiled approvals processes for keywords, creative and the like.

Over-communicate all budgeting issues, lest you take a BU marketer by surprise and ruin a perfectly good working relationship. Here’s a typical centralized marketing org chart for a large company:

This is what it looks like when SEM is part of a centralized marketing group

Speaking Of Budgets

Where do PPC budgets live in this centralized world? Funny enough, I’ve seen it work both ways. When we were centralized as a marketing org, at different times the budgets actually lived in Marketing and then in the BU. It works OK either way, but there are some things you’ll do differently as a result.

For example, when our marketing group was centralized but the budgets lived in the BU, I had to create a lot of process around moving budgets. I’ve written about it here, and the central theme is that SEM budgets need to be mobile in large organizations with multiple BUs. Reason being, money will need to be moved from under-performing businesses to over-performing businesses in order to maximize return to the company.

When Marketing is centralized and the PPC budgets all live in Marketing, it becomes much easier to manage of course, because SEM managers can move budgets at will. The risk in this case is alienating your internal customers, so just as noted above, communication is key.

De-centralizing The Marketing Organization

De-centralizing is helpful if there is a region or group of business units with which Marketing feels like it should align, perhaps because these businesses are of a higher priority within company, or if they’re earning the lion’s share of the company’s revenue.

In this model, the whole marketing organization lives in the region or BU, with marketers, salespeople and product teams all reporting into the head of the BU or region. The advantages here are efficiency and alignment. PPC budgets in this world need less mobility, and there’s less ambiguity about how the money should be spent. Marketing’s objectives are the same as BU goals.

Decisions can be made quickly because there are fewer cooks in the kitchen, so to speak. Keyword and creative approvals are still necessary, but if my boss is your boss, I know right where to go to escalate and resolve any delays or disagreements. All good, no?

The downside is that marketing best practices are more challenging to share across regions or businesses. What works for one business may not get translated to another. And international? Well, that becomes tricky as well. You’ll be hard pressed to find funding for that international marketing manager, as there aren’t really any incentives to ‘go global’.

Here’s what a de-centralized org chart might look like:

SEM and other marketing channels in a De-centralized Organization

Wither SEO?

On a side note, you might have noticed that in the org chart above I have SEO listed under ‘Product’. In many companies, there is an eternal ‘tug-of-war’ for SEO, usually between Marketing and IT.

At Yahoo!, we’ve pretty much decided that SEO belongs in our product group. I wrote a column on this a long time ago. In Marketing, we build tools for SEOs, but we leave the work for those folks in Product. The reason is that in a big place like Yahoo!, the product development process is where the real SEO work has to take place. If you try to drive it from anywhere else, you fail. Believe me, we tried…

That’s all I have on organizational models for now. See you next month!

There were only three presenters on the panel, myself included, but there was a conspicuous depth of paid search experience, as I was the least experienced guy at the podium. My fellow panelist, Wister Walcott has been building enterprise search management tools for years and even co-founded a company that makes large-scale SEM tools. For his presentation, he focused primarily on non-bidding SEM challenges and their potential solutions.

Wister likened managing large PPC campaigns to painting the Golden Gate Bridge. For those non-Bay Area residents, the analogy is that the Golden Gate Bridge is always being painted. As soon as painting crews are ‘done’, they simply start over because there are always parts of the bridge that need painting.

So it is with managing large PPC campaigns, Wister says – your work is never done, and if you haven’t ‘painted’ parts of your campaigns in some time – because you’ve been working on other aspects – it’s already time to go back and revisit those areas you haven’t looked at in a while.

Wister focused on large, mature campaigns, and how to find new opportunities within them. Some high-level areas he suggested looking are creatives, campaign structure, negative keywords, budgeting, and – of course – bidding optimization. If you’ve got all that under control already, the next logical place to look is Landing Page Optimization.

One of the things I really liked about Wister’s presentation is the fact that he acknowledges that with large campaigns, most of the activity is about what I call ‘managing by exception’.

The point is that the campaigns themselves are running pretty well, generating revenue and profit, and what you’re really looking for are outliers – campaign elements that are secretly bogging down the performance of your campaigns – secretly, because they’re operating in otherwise healthy campaigns that mask the negative effects of these elements. Since Wister sees lots of large campaigns in action, he has a unique and accurate view of where these profit bandits live.

First off, Wister says, look for ad groups that don’t have any active ads in them. This is more common than you think, as ads sometimes go inactive without us noticing.

Then, look for large ad groups with low clickthrough rates (CTRs). If you find them, break them up into smaller ad groups where you can target keywords more closely with keyword rich ads that have a better chance of clicking against the keywords in smaller, more tightly knit ad groups.

Smaller, Tightly-Themed AdGroups Perform Better

In addition to ad group optimization, match type segregation can also yield increased profit through efficiency – separate your keywords into ad groups by match types, and use negative keywords to ensure that you’re separating the traffic. There is good content already published on how to do this, just do a search for ‘match type and negative keywords’ and you should be on your way.

Headroom analysis, as Wister puts it, involves identifying areas where there is a delta between your max CPC and actual CPC. The notion here is that you’re willing to spend more on a keyword but for some reason you can’t.

In this case, Wister suggests using that unspent ‘budget’ and investing in keywords that have lower ranking so you can drive additional traffic to those keywords. Finally, Wister reminds us that once you’ve done all these things, it’s time to start over at the beginning. See Golden Gate Bridge above.

Fellow columnist Brad Geddes, with whom I’ve had the pleasure of sharing a panel before, has his own consulting company and has seen a great deal of action in paid (and organic) search over the years. He brought some of that experience to bear when he dropped some good PPC knowledge on the audience in his presentation.

With a nod to the unique nature of large campaigns, he suggests using tools that lend efficiency to paid search management, because he understands the resource constraints at hand and has had to solve these challenges himself many times.

The more keywords you’re buying, in general, the more tools you can and will need to keep your day-to-day management, well… manageable. The happy truth, Brad says, is that big accounts throw off lots of data, and in this sense, they can actually be easier to manage than small accounts.

The notable exception to this is creative, which doesn’t seem to be very scalable in terms of the effort required to get incrementally positive results. Conveniently, Brad’s company, Certified Knowledge (CK), has some creative tools, and as well Brad mentions some third party services that provide crowd-sourced creative development – some even have performance-based pricing.

In addition to creative, Brad talked about some other areas where tools can be applied to large campaigns to gain efficiency. Negative keywords can be generated with third party tools, and some analytics packages can lend a hand as well. Brad says to pay attention to your ad group names, so you can easily filter through them and target areas where negatives are needed.

Finally, we all know that quality score is an important metric, and to address this in large campaigns CK has developed a quality score analyzer to help marketers target the right keywords for optimization. Oh yeah, one more tidbit from Brad. He recommends time management tools, again because of the resource constraints we all inevitably face. Specifically, Brad likes calendars as opposed to task lists. I agree!

As for me, I did my usual song and dance about how we manage paid search here at Yahoo!, Inc. I talked about valuation (of course!) and about how we deploy PPC campaigns using an agency or an in-house team, depending on the needs of the business and our resourcing constraints.

In this particular session, I did spend more time talking about the bidding algorithms we build for some of our businesses. Here’s a slide on that very topic:

Segment Your Porrtfolio and Optimize Accordingly

The point here is that by segmenting our keyword portfolio, we can then address each segment separately according to its performance characteristics.

Head terms get one algorithm, body keywords another, and the tail is a different matter entirely. Ah, yes, the tail. Maybe I’ll devote a column just to that….Until then, Happy Searching!

Hiring Search Marketers

Josh Gampel kicked off the panel with a fine presentation on hiring for search. Josh and his teams were the first folks to build a company (Onward Search) around staffing for search engine marketers. They have since evolved and now cover so much more  – developers, writers, UX experts – but Josh and his folks clearly still have a soft spot for search marketers.

They even published a salary survey that pinpoints salary ranges for six different types of search marketing functions across 20 US cities – very impressive!

You can find it here.

The latest salary survey from Onward Search

Josh also had some terrific tips for managers who are hiring. For example, he said it’s imperative that the hiring manager writes the job description. Human resources, while both capable and critical, simply lacks the specific knowledge to build a job description that will pique a search marketer’s interest and get them excited about the job.

He also emphasized the importance of behaviorally-based interviewing, and pointed out that right now, the highest demand for search marketers is in the mid-range salary positions.

In House Teambuilding & Tools

Tony Adam focused on how he built in-house SEO teams and what he did to engage and motivate his team members. I loved his suggestions not only because of their innovative and clever nature, but also because the obviously have implications beyond SEO. In fact, his primary message to the audience was that building SEO teams is about people, not SEO.

Tony emphasized follow-up and salesmanship in the recruiting process, but really hit his stride when talking about how to handle teams once they’re in place. He talked about mentoring and training, as well as ways to keep teams energized. He likes team lunches, and in fact advocates the ‘inappropriate lunch’ in some cases – though you’ll have to ask Tony what that’s all about!

Tony thinks highly of ways to empower teams by giving them ownership of their business, and even favors other ‘teambuilding’ techniques like happy hours, nerf wars, remote controlled helicopters, and the like.

Peter Leshaw had some interesting things to say about team building, but really got me going when he started showing dashboards and talking about bringing in consultants and vendors to work with your in-house team. Now that’s right up my alley!

First, the dashboards. Peter believes, as do I, that dashboards are a great way track your business and hold folks accountable to the plan. They (hopefully) provide a simple way to look at performance over time.

Here’s an example of a dashboard Peter uses:

An SEO Dashboard from Blue Interactive Agency

I really liked when Peter talked about bringing third parties in to support in-house teams. This is a very tricky thing to do, so to have any success at it, you have to be really careful.

What’s the single most important thing to keep in mind if you’re bringing in an SEO expert to give an extra boost to your team? Peter says that it’s to make sure they have the same seo approach, strategically, as the in-house lead. This helps ensure that there is no ‘stepping on toes’.

It’s also critical that the consultant is comfortable with his/her role as such, and that he/she understands and accepts the chain of command and communication in the organization. Follow that recipe and you’re headed for SEO success.

Bridging The IT-Marketing Gap

Elmer Boutin is a very experienced webmaster, and he gave us a really fresh perspective on the relationship between marketing and IT, particularly as it relates to SEO. He boiled it all down for us, into what he calls the three C’s:

1. Contact. Marketing and IT are separate entities, both physically and functionally. Learn about their pain points. Try to find ways to connect, and understand how to make their lives better

2. Communicate. Someone on the marketing side needs to know how to ‘geek speak’. Put them in charge of communication with IT. Then, find the most marketing-savvy IT guy (or gal) and make him/her marketing’s main point of contact in IT. And when you do communicate with IT, be specific – be direct, be exact. Leave nothing to interpretation. If marketing is making requests of IT, ideally boil it down to providing code for them to copy/paste.

3. ‘Carpe Scientiam’.  Sieze the knowledge of your Web technologies. Elmer points out that the more marketers know about their Web technology, the more success they will have with IT. He reminded us that IT isn’t always the problem, sometimes it’s marketers not having sufficient knowledge that’s the problem.

One of the most useful things about Elmer’s presentation was that he pointed all of us to various resources on this topic. He like’s Ian Lurie’s Conversation Marketing blog. Also check out Scott Brinker’s work at www.chiefmartec.com , and Elmer’s own work at www.crossingmarketingandit.com. Enjoy!

Dozens of spreadsheets packed with endless assumptions, each one more fantastic than the last, combining to ultimately seal a marketer’s fate for the next 12 months. What could be better than that?

Well, how about three steps to make your SEM planning process more successful:

1. Align SEM goals with company strategy
2. Build different scenarios to illustrate tradeoffs
3. Engage with all stakeholders multiple times throughout the process

A couple of years ago, I wrote a column about our Monthly Reforecast, an internal tool that we’ve found indispensable; we use it still to this day. In fact, I’ve had multiple requests for the reforecast template we use.

It helps us to communicate unanticipated changes to what we thought was going to happen when we built this year’s plan, last year. I wanted to take a moment to reiterate the importance of that particular tool, and to look at the basic process that gives rise to the need for the reforecast – The Plan.

The reforecast, of course, becomes necessary when your SEM Plan of Record inevitably turns out to be incorrect, and as I mentioned, your real work around this phenomenon comes less in SEM management and more in expectation setting and management.

To summarize, the reforecast template should be standardized, and buy-in on all levels is required before you can roll this out in an organization of any significant size or complexity.

But back to the planning process — because that’s where most of us are right now. The planning process, as it turns out, is equal parts financial analysis and cat-herding.

The most influential factor in the planning process is (and should be) the overarching business strategy of the company. Depending on whether you’re a start-up in hyper-growth mode, or a mature, industry-leading brand (or more likely something in between), you should align your SEM planning process with your company’s financial goals.

As an example, a few years ago we shifted SEM strategy from one that focused on average ROI to one that strives to maximize profit. The resulting metrics, like cost and revenue, diverge pretty widely in these two scenarios, and thus I can’t overemphasize the need to work on this topic before you build your plan.

Data Is Good

When building your initial plan, pull together as much historical data as you can. In our case, we have some programs that have been running for half a dozen years, and other seasonal campaigns we’ve only executed once.

Either way, you’ve got something to go on. You may want to assume growth rates in your plan if it’s not too mature or if you have some product innovations in the works.

If you don’t have historical data, and you want to plan for a new campaign next year, think of it two ways.

Top-down: How much budget can I set aside for a “test” campaign of a reasonable size, where there is no guarantee of positive results?

Bottom-up: Build a keyword list and get inventory from the engines, assume CTRs and CPCs, conversion rates, etc., and build a basic plan.

If you look at this from both a top-down and bottom-up approach, you’ll probably find that one approach makes more sense than the other, or that there’s a happy medium between the two.

Now back to business strategy. What happens if it’s not crystal clear? What if business units have different strategies? What if management isn’t giving specific orders to marketing as far as what profitability metrics reign supreme?

When we first went into planning this fall, there were cases where we didn’t have much explicit guidance around which metrics we should optimize our SEM programs to. So, once we built our base plan (based on our current strategy and historical data), we constructed a number of scenarios around it to help folks see how changing the ROI of our programs would result in corresponding shfts in cost, revenue and profit.

This is a mock-up of what it looked like:

This is a mock-up of SEM scenarios we call "ROI Bands"

ROI Bands

We call these “ROI bands” because they illustrated different levels (bands) of performance that can be achieved depending on the preferred strategy.

This is great because it allows management to see the trade-offs and pick the scenario that best suits the bias of the company going into the new year. Then, as budgets begin to settle, and PPC gets either more or less than the base plan asks for, you’ll already have managed expectations around new performance targets.

Before you get too gung-ho on this approach, you’ll want to stop for a moment and remind yourself (and others) that ROI bands have inherently low confidence. They are what-if scenarios and can’t be taken straight to the bank.

What makes this even trickier is that although you can put an asterisk on a number and flag it as low confidence, if it turns out next year that you can’t hit that number, nobody remembers the part about your initial estimate being “low-confidence.”

Here are two things you can do to protect yourself:

• When building ROI bands, be conservative
• See Reforecasting, above

Plan Early, And Plan Often

If you’re anything like us and you have multiple businesses (and internal customers) to support throughout the planning process, you’ll want to be very proactive with your planning communications.

Go ahead and set up face-to-face meetings with your constituents around the organization before the process even begins. Tell them that you’re starting to think about planning and want to know what their planning calendar looks like. Ask them if there are any big product initiatives in the coming year that you should be aware of. Ask what the business strategy is for next year, then ask again, and ask again during your next meeting.

Get the picture? Set up follow-up meetings where you can show them your plan drafts as you produce them. (Hint: People don’t like surprises in the planning process.)

And don’t forget the most important thing about The Plan. It will be wrong. You can’t avoid it, so just plan for it and you’ll be fine!