The Value Of “Wasted” Search Marketing Dollars

Advertising pioneer John Wanamaker once famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” And as digital marketers/SEO ninjas, you certainly know how this feels. We pay for impressions that result in almost no clicks. We pay for clicks that bounce like rubber balls. We pay for SEO that results in paying for IT, UX, IA, and content efforts that result in traffic that also bounces or doesn’t quite do what we were hoping. Any time we pay for eyeballs, traffic, or a slice of someone’s time, we know that a relatively high percentage of that money is wasted.

Well, that’s according to a crappy definition of “wasted,” in my opinion.

If our definition of “wasted” is that someone didn’t buy something, sign up for our newsletter, or retweet us until all of Twitter crashes, we are living in a fantastical world of purple unicorns and unlimited Belgian waffles. If our definition of “wasted,” on the other hand, means we didn’t get something in return for our spend, we are living in a real world. But wait, aren’t those two definitions the same thing?

A better definition of “wasted” is that we didn’t get anything out of what we spent—as in nothing. And with search, display, social, etc., we can almost never say that. When you are spending money on search, you are not just buying traffic or working toward rankings. You are also buying information. Regardless of whether visitors do something or not (which impacts today’s dollars), we learn something (which impacts tomorrow’s dollars). That’s because search is like having a focus group of people who bring their wallets.

Search is special because of its heavy intent transparency: our ability to understand what a user is trying to accomplish. Search, in essence, is a huge focus group, in addition to a (hopefully) profitable traffic source. Because of this, none of our budget goes to waste: all outcomes teach us how well we are meeting user needs, what users are interested in, what they don’t care about, and where we aren’t connecting. For each KPI, stage, data point, place in the funnel, or whatever you want to call it, we get two things. First, that nasty measure of attrition or “waste,” according to lazy thinking and quantitative measures, and second, a bunch of information that suggests actions we can take to improve the situation, which is qualitative and requires people to use their thinking caps.

The real magic is in segmentation

What’s even cooler about search is that we’re not just bringing a single homogenous focus group to our business. More often, we’re bringing dozens, if not hundreds of different groups. When we start comparing different types of people and the ratios of what they do vs. what they don’t do, we start to learn a lot more. This is called segmentation, and again without “wasted” visits, it wouldn’t have any value; we would all be in our flying hot tubs playing poker with dogs, because we’d be so rich from our 100% conversion rates.

Segmentation is work, though. It requires thought; it’s not a report that can be run. You can’t go into AdWords or Google Analytics or Omniture SiteCatalyst and run a “tell me my segments” report. And that’s why people seldom try, sadly. But the good news is that segmentation is actually not that difficult, and at least for paid search (for a well-run account), a lot of the work may already be done via your account structure. SEOs may have to get a little more crafty, but what we’re trying to do is group similar visits by keyword/theme/intent and see how they interact with our site and our brand differently. We are not doing this to redistribute budget or shift focus (although we may do that), but to understand why we succeed in some places and not in others, and learn our audience. We want to know why.

The first thing we’ll find in this process is a bit of a boat-rocker in the PPC world. In almost all cases, you’ll find there are legitimate (and often preventable) reasons for lower performance in certain segments, and these reasons have nothing to do with the intrinsic value of a given keyword or campaign. Why is that a boat-rocker? Because the way most PPC campaigns are managed, reports are sorted by conversion rate, CPA, ROI or some other single metric, and budget is redistributed to the “performers” and away from the losers. It’s a quick fix, but a silly one because what we’ll find here is that some of those losers may turn into extraordinary performers once site-side issues are fixed, and that’s probably something that should have been discovered a very long time ago.

On the SEO side, we’ll start to find a boatload of ways to improve user experience post-click. In this situation where we can’t just change landing pages or edit search result text, we have to look at the site to see what’s making users bounce or get lost in the woods, and make adjustments on the pages and in the workflows that already rank.

As you dig deeper into the on-site experience, keep those segments rolling so you can see how the different audience types consume the site.

What to walk away with

As I sat down and began to write this, I was fleshing out all of the implications of these ideas, and this post was quickly turning into something rivaling Atlas Shrugged in length. So let me try to wrap this up and make a salient point.

Find a way to get your organization to embrace “waste” as information and learning, and not failure. “Waste” is part of the real world, and it’s a good thing because the ratio of waste to non-waste in different segments is exactly what reveals what is working and what isn’t. It teaches you. Don’t busy yourself dodging waste and making micro-adjustments to mitigate your waste. Instead, start learning from it, which will naturally lead to less waste and smarter thinking. And I can guarantee you, the value of smarter thinking is a hell of a lot higher than the value of the mitigated waste. Understand the implications of your focus groups / segments and you will be making sea changes to your marketing and site experience, rather than piddly bid changes.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Analytics | Search & Analytics


About The Author: is the Director of Client Performance at Search Discovery, an Atlanta-based search marketing and web analytics agency. Evan is a fierce believer in the power of web analytics and the impact it can have on the performance (and lovability) of web sites. Evan also writes a web analytics blog called Atlanta Analytics and can be found as @evanlapointe on twitter.

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  • George Michie

    Great stuff, Evan. There is a great deal to learn by studying failures. A few caveats I’d throw out lest advertisers learn themselves into Chapter 7: 1) Almost any relevant keyword “works” if you can pay the right amount for the traffic — the problem may be that the market prices you off the first page. That may tell you others can afford to be there while you can’t, or it could mean they’re not watching their ROI carefully. If we learn more from the first alternative that leads us to: 2) Much more likely than page design problems: is your selection and pricing of “X” competitive with the other folks on the page; and 3) Is keyword X ambiguous in meaning such that many of the folks clicking on the ad were looking for something else.

    My point is that you’re absolutely right, there is much to learn from the poor performers, but it’s also true that not all poor performers can be “fixed.”

  • Evan LaPointe


    Great points. But here’s what I would say back:

    If someone is capable of managing a campaign so poorly they go into Chapter 7, they shouldn’t be in this industry, so I welcome it. :)

    And I would strongly debate the point you’re making. The site is the engine of conversion. While you’re right, not all bad performers can be “fixed,” it’s enabling caveats like that that make paid search marketers lazy and never look at the site-side issues. In my experience with PPC, only about 5% of paid search marketers ever bother to log into a web analytics tool for anything other than reporting. That’s pitiful.

  • Evan LaPointe

    To illustrate: here’s a link to Tim Ash’s landing page case studies. Nobody in PPC history has ever increased conversion rates 81% by changing bids…unless they eliminated everything except brand terms.

    PPC people need to get this: the media is far less responsible for performance than the site. Period.

    If you bid on silly keywords, you will always do poorly. But if you bid on an acceptable range of terms and drive qualified traffic, the sole determiner of success will be the site: landing page, information architecture, usability, cart process, etc.

  • Evan LaPointe
  • http://bhanks bhanks

    I think this article gets to the heart of the difference between PPC and SEM.

  • George Michie

    I hear you, and I don’t think we disagree that much. There are plenty of lazy marketers out there and driving them out of business is a pleasure we both enjoy.

    Choice of landing pages is hugely important, but it’s a mistake to believe that price and selection aren’t huge factors in conversion rates as are the types of keywords. If you sell motorcycles the keyword “Yamaha” will have a low conversion rate no matter what the page looks like and no matter how much the ad copy screams: “We sell motorcycles not keyboards, or stereos, or drums or…” Moving the buttons around won’t change the fact that many of the people who got to the site were looking for something completely different.

  • Evan LaPointe

    Haha – “a pleasure we both enjoy.” Love that.

    You’re right – focusing on the site doesn’t allow you take your eyes off the ball with your marketing, and I certainly don’t mean that. When you see outliers in conversion rate, bounce rate, ROI, or whatever column(s) you’re sorting by, you need to figure out why, but nobody can dispute that the site itself is usually the last place on earth the average PPC manager looks.

    I do think that many good PPC professionals still don’t understand or fully appreciate the importance of the site, and a statement like, “moving the buttons around,” sort of illustrates that. It’s a big oversimplification, and potentially disrespectful to people like Tim who make a living making a huge difference in people’s businesses.

    You are right: choosing keywords, prices, and creative are huge influencers of success, and I’ve never said otherwise. Those decisions are the fuel. The better the fuel, the better the engine runs. But if the engine sucks, it doesn’t matter how good the fuel is, past a certain point. And that’s the point I’m making. In marketing, we tend to blame the fuel for performance. Meanwhile, we’re racing our competitors with a 4-cylinder engine under the hood. We’d get 2x the performance with a V-8, using the same fuel.

  • George Michie

    Well said, Evan. It’s also worth pointing out that the companies we work with at RKG are primarily eCommerce firms of considerable scale who’ve been working hard at testing and improving their site for 10 years or more. The 81% conversion improvements were made long-ago in that space.


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