Making Your Search Campaigns Work Harder During The Economic Downturn

Even in this challenging economy, paid search will continue to be one of the best-performing marketing methods out there. Search marketing has weathered economic storms of the past. In fact, Google and the entire industry was born out of necessity, during the dot-com bust. When times are tough, marketing needs to work hard and prove its value—and that’s what search does. While other forms of advertising (TV, print, display) are facing cuts, search is surviving because it’s extremely measurable and enables advertisers to easily tie revenue and ROI back to the ad level.

But as paid search becomes ever more crucial, it’s also becoming more complex—and the stakes to wring every last dollar out of your search marketing spend are higher. As a serious search marketer, you need the right tools and applications to run your campaigns efficiently and effectively. Just as you wouldn’t set out to landscape your garden with a plastic shovel, you shouldn’t try to manage your crucial, revenue-driving search campaigns with a hodgepodge of spreadsheets and online tools. To help you get the most out of your search programs—especially in these challenging economic times—I’ve put together some meaty tactical tips that serious search marketers can use to help generate the highest returns out of their search dollars.

Using day of week and seasonality data to increase campaign performance

Check to see if certain days of the week have better conversion rates than others. If you are generating a significant number of conversions per day, take advantage of “day-of-week” bidding. The prime example of day-of-week bidding is the marketer selling leads to the auto industry. He knows that on Thursday, Friday, and Saturday his conversion rates go up, and his cost-per-conversion goes down. He is willing to bid more those days because he can stay within his CPL goal due to the increase in leads generated. When engaging in day-of-week bidding, for every 10% increase in conversion rate, you can increase your bids by 10% on those days.

Similarly, if you are headed into a period of higher overall conversion rates, such as the holidays, you should increase your bids now in anticipation of those higher rates. Below is a chart from a leading retailer with the recommended bid increases they follow during the holidays. On the X-axis you can see date as we run through the holiday season. On the Y-axis you can see indexed conversion rate, with 1 being the conversion rate baseline during non-holiday periods. As we move through the holiday season, keywords experience increased conversion rates and increased revenue per conversion. Increases in these metrics increase your revenue-per-click, allowing you to spend more on each click and still hit your margin goals.

Source: Hitwise 2008

For the details in the matrix below, we just focus on revenue-per-click. The increase in revenue-per-click could come from improving conversion rates, improving order sizes, or most likely from both metrics acting together.

Each row on the matrix above matches one of the four holiday periods highlighted in red in the graph. As we watch our revenue-per-click number move up, we can increase our bids by the same percentage. The only thing not reflected in this strategy is the changing competitive dynamics in the auction. In general, auctions get more competitive as the holiday season progresses. Keeping the same average position will be more expensive in December than in September. This means that, all other things being equal, to maintain your place in the auction you will need to sacrifice margin in the holiday season. The art and science of SEM meets with the marketer’s determination to change competitiveness in the auction and blend that data with the hard science of revenue per click.

I hope this strategy serves you well during the competitive holiday season. This year, especially, marketers need to use every weapon possible to increase sales. Next time I’ll examine New Year’s Resolutions for ad copy creation, including ways to save you time & money by recycling top performing creative elements into your lower performing creatives.

Chris Wine is Director, Product Marketing for Marin Software, responsible for driving market positioning and strategy.