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Day One Of Paid Search: Know Your Goals
Sometimes the start of a project is the hardest part. You don’t know what you don’t know. There will be questions to ask for which you may not know the answer. If you’re a beginning at search engine marketing, you may even be staring at a blank Excel sheet right now.
The first question should always be: What are the goals of this account?
Is it to drive product sales? Or to drive lead form completions which will be handled by local reps later? Is it highly engaged traffic that will generate multiple page views so you can sell more advertising impressions? Do you have a service which you hope that paid search visitors will call and order? Is it just a branding approach where the most impressions for the least cost are what you are looking for? Often, it could be a combination of these goals and other types of conversions.
How will you know if you’re doing well or poorly? Is it when your boss says “great job” or the budget keeps flowing? Usually, there’s a number to hit. Wouldn’t it be best to know what that number is so you can optimize towards it? Regardless of your ideal ultimate outcome, paid search seems to work best when you have a clear goal and clear set of metrics to evaluate your success. I know that some SEMers out there will cringe when I say this; some people may take a non-metric approach to their paid search efforts. However, over time, I believe the SEM community has embraced quantifiable goals; ones that can be tracked, measured, and used to benchmark success.
Here are some of the common goals used in PPC management:
Traffic goal. This is the simplest goal to manage. The advertiser has $X and they want as much traffic as they can get to their site for that budget. The optimizations will work to achieve the lowest cost per click charges for the keyword set.
Metric goal. Some advertisers may focus on a specific metric such as click thru rate, cost per click, or even average position to gauge the health and success of their account.
Count goal. The advertiser wants to achieve X number of whatevers. Whether it’s downloads, sales, lead gen forms, etc, usually the budget given is in a particular range to account for the unknown spend it will take to fulfill the goal.
Return on investment (ROI) goal. For every $1 the advertiser spends on paid search, they expect $X in return. For sites that sell things, this is a very easy calculation: we spent $1000 in paid search and we generated $3000 in sales so our ROI was $2000. Many times, the cost of the goods sold will be factored into the calculation: we spent $1000, we generated $3000, but the products cost us $500 so the ROI was actually $1500. Agency fees and other costs associated with the campaign may also be factored in to get a true net ROI figure.
Return on ad spend (ROAS) goal. This is like ROI, but instead of the total sales minus total budget, it is a ratio of the two. So in our example above, we spent $1000 and made $3000, the ROAS would be $3. ROAS has become a popular type of goal because it’s very scalable. Most PPC accounts are “always on” and not flighted out like television or banner campaigns. So, whereas an ROI of $2000 could have been from $3000 spent or $300,000 spent, an ROAS of $3 ensures that whatever you’re spending on PPC is generating you three times as much in sales. Remember, in an ROAS formula, anything under $1 is actually a negative return.
“Cost-per-” goal. It could be cost per action, cost per sale, cost per lead, etc. The advertiser sets a maximum cost that they are willing to pay for each goal and the average cost of each conversion is figured out over a certain date range. So, let’s say your client has set a cost per lead (usually a form that is filled out) at $30. For the month of March the budget spent was $10,000 and the PPC traffic was able to generate 1000 leads. That’s a CPL of $10 which is well below the advertiser’s threshold and thus is a successful campaign.
Sometimes it’s very hard to create a quantifiable goal on your website. For example, many companies have a PPC budget set aside for recruiting job applicants. Who’s really to say how much each resume submittal is worth? However, SEMers have learned over the years how think outside of the box. “So, what percentage of these resumes actually turns into hires? Okay, how much is a fair cost if you used a recruiter? If that’s $1000 and you think 1% of online applicants turn into hires, then a $10 cost per lead might be acceptable.”
If you can walk the advertiser through this mindset, eventually you may be able to settle upon a certain dollar figure or even a range. Even if that can’t really be substantiated on paper, as long as both you and the company feel it’s a real-world number, you can use that to help answers those critical questions such as how much each keyword is worth to the campaign, what kind of creative generates the most recruits, etc.
Knowing your goals is a not only a great place to start, it’s absolutely essential for long-term success with a paid search campaign.
This week’s question: “What are your goals for your paid search program?”
Some opinions expressed in this article may be those of a guest author and not necessarily Search Engine Land. Staff authors are listed here.