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.