Ahh, annual planning season. Nothing quite like it. You can almost smell it in the air.
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:
- Align SEM goals with company strategy
- Build different scenarios to illustrate tradeoffs
- 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:
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!
Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.