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Justify search budgets with a business case

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Mike Moran is chief strategist with digital marketing agency Converseon (www.converseon.com) in New York and the co-author, with Bill Hunt, of “Search Engine Marketing Inc.” (IBM Press, 2005). Hands On: Search recently asked Moran about how best to justify search marketing budgets to the C-suite.

HOS: Marketers always have to justify their budgets. What's the biggest challenge for search marketers?

Moran: If marketers are having trouble getting CEOs interested in search, there's a good reason for it. And that is CEOs don't care about search marketing. In fact, it's a combination of two subjects they care the least about: marketing and technology. The trouble is, few marketers explain how search can affect the goals CEOs have for their companies.

When the boss talks to manufacturing, or sales or whoever's in charge of R&D, it's clear what happens if money isn't spent there—that there will be no products to sell or sales will drop. But marketing talks about fuzzy things. When marketers walk into the CEO's office and talk about brand awareness, search ranking and keywords, they might as well come in and say, “Why don't you fire me now?”

HOS: What other approaches do you recommend?

Moran: You have to explain how search marketing brings in revenue at a low cost. If your goal is to get the attention of your CEO, you have to explain how what you're doing meets with his goals.

Marketers have to remember that CEOs aren't terribly religious about anything except money. If they can see how search can increase shareholder value and make money, they become very religious about that. It's important, therefore, for marketers to convert CEOs to their religion.

HOS: How might this conversion take place?

Moran: First, search marketers have to make their peace with direct marketing. Those who come from a direct marketing background totally understand that their relationship is with sales. And people either don't know or won't admit that the Web is the biggest direct-marketing opportunity of all time, where everything is trackable and measurable.

If you work in an e-commerce company, you're already doing this. You know exactly what it's worth to have somebody look at your ad and click on it. You know the value of every new visitor, the conversion rates, the percentage of return visitors. You have it all nailed. But most companies aren't e-commerce companies. There, the idea of marketing is to print a brochure or go to a trade show.

If you go into the C-suite with this approach, you'll have all the same problems justifying your existance as brand marketers do. But if you go in with the approach of a direct marketer and make it your business to show how every person interacts on your Web site, where they went next and how they bought from you, then you'll have a powerful tool to justify every marketing expenditure.

HOS: Many marketers are champions of simplified dashboards to help the C-suite understand performance metrics? Are you one?

Moran: It all depends on the dashboard. You have to make sure what's on the dashboard is what the executive wants to see, which is sales, leads, the leads that are expected to close and projected revenue. But if all it is is just brand awareness, positive sentiment, Web site traffic or your ranking from search results, I think the CEO will nod off to sleep.

What we're really talking about is not whether search is effective or not, but whether you can persuade people to allocate funds for it. If marketers focus on making sure they can attribute sales to particular touches they've made to a customer, eventually they'll see which one is more valuable. This also allows you to put your budget at the right level. My belief is, if we were to connect the dots in this way, search's share of the marketing pie wouldn't be so small.

HOS: What specific metrics might you recommend for search marketers?

Moran: I spoke with the CMO at E-Loan Inc., the online lender, and one of the things they do to allocate credit is through attribution. For example, if somebody searches for the keywords “mortgage loans” and E-Loan eventually writes them a loan, search marketing gets the credit. But if they search for “E-Loan” and the company writes them a loan, TV gets the credit because the brand was brought into play. That makes a lot of sense to me.

There are many technologies for measuring the customer's journey. There are Web metrics systems, from the free Google Analytics to expensive things, all of which help you understand how products are sold and where customers are coming from. That's what is emerging now, and smart companies are going there.

Search marketing is a lot more about marketing than search. Knowing about the technology and understanding which level to pull and dial to turn, doesn't matter if you don't understand the marketing basis for what you're doing, and can't show how effective your campaign is.

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