Dylan wrote, “When you ain’t got nothin’, you got nothing to lose,” but when you’re spending real dollars on search engine marketing you have plenty lose. And yet, according recent survey of 500 marketers, most search marketers still use the most basic metrics in evaluating the performance of their programs.
While marketers picked conversion as their most important metric to optimize search campaigns, click through rate and cost per click, relatively less meaningful metrics, still ranked second and third.
These are certainly important metrics, but what about something slightly less basic, like revenue, leads or CPA? Well, even though 85 percent of our respondents said their primary goal was to sell products or services online, 31 percent cannot measure cost per customer (or sale) nor return on ad spend, and 40 percent do not know how to accurately measure profit per customer (or order).
Far too many search marketers are still making campaign decisions based on superficial metrics, such as click through rates and cost per click, and can optimize campaign effectiveness by increasing focus on deeper revenue-impacting measurements, such as profit per order, cost per unique customer and activity measurements such as time spent on site or click path.
Additionally, the survey indicated the majority of search marketers are manually managing keywords using Excel, limiting their ability to effectively scale search marketing campaigns.
According to the survey:
- Marketers picked cost per click and click through rate as among their top metrics to optimize search campaigns instead of deeper metrics such as return on ad spend, cost per customer (or sale) or profit per order
- 43 percent of e-commerce respondents do not know how to accurately measure profit per customer (or order)
- 67 percent of respondents indicated not having enough time to effectively manage campaigns as their top issue in search marketing, while only 35 percent use an automated bidding solution
Incorporating bid management solutions will enable customers to utilize both the most common metrics they need to optimize their campaigns like cost-per-customer and return on ad spend, and advanced metrics like profit per customer and lifetime value per customer.
Search engine marketing has been around for over 10 years now. Let’s help each other move beyond the basics and propel the industry forward.
The survey was conducted by Omniture as a part of the Omniture Online Marketing Research Report. Because the survey is ongoing, results over time may change. These results are as of April 8, 2009.
Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.