To stretch search budgets, consider all the data possible

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James Beriker is president-CEO of search engine analysis and advertising services company Efficient Frontier. BtoB Senior Reporter Christopher Hosford recently asked Beriker how marketers can stretch their search marketing budgets in a down economy.

BtoB: What is the best measurement of search performance?

Beriker: It's essential that marketers devote the time to understanding search ROI, however that's defined—to produce, for example, a certain number of impressions on a particular page, or achieve a certain level of sales, or achieve a margin of X, or produce a certain percentage of conversions, which themselves must be defined.

Search users right now are buying fewer things, and that will impact search's ROI. Businesses will respond to this challenge in one of two ways—as a sophisticated advertiser who can turn to analytical, automated tools to understand and maximize ROI, or as an unsophisticated one who doesn't.

BtoB: What should the focus of that automated analysis be?

Beriker: Just like with database marketing, data is imperative for understanding search ROI. The most sophisticated advertisers will look at how their data flows, and make adjustments to their campaigns. For them, data is everything. Every keyword they place is a result of some kind of analysis that predicts an outcome.

Sophisticated marketers consider all the data they can get about conversions: What time did a particular click occur? What was bought? What sales funnel did the purchaser follow? What forms were filled out and in what order? On what page was the conversion completed? From what geographic location did the buyer come from? Was there some query that helped in the conversion? Is the buyer a current customer? What is his value to the company? What margin is achieved through his purchase? And on and on.

BtoB: And the result of this understanding?

Beriker: Marketers need to take all that data, as well as the data from the search engines about number of impressions and the calculated keyword landscape, and from there predict the ROI for every single keyword in their search programs.

Consider [that] every keyword bid is a decision to invest in a click, and that decision must be backed by some data around predicting a conversion. Marketers must look at every keyword discreetly, and try to understand the tradeoff in investing in one keyword versus another keyword.

The principle isn't hard to understand. If you have two keywords in which you're investing, and one gives off better ROI than another, you now have the knowledge to be able to shift money—money that is in short supply these days—to the better performing keyword.

BtoB: It sounds like search marketing is more science than art.

Beriker: I don't want to take away from the creative work that internal teams do, such as mining the psychographics of customers to maximize conversions. But I'm talking about getting from click to conversion from a search perspective.

BtoB: How else can marketers do more with less in this economic environment?

Beriker: Today's economic dynamics are tough, so marketers can make use of the excellent free tools from Google, as well as spreadsheets to understand the basics of their data. There are also lots of third-party vendors who can automate some of this, aiming, for example, for a cost-per-action (CPA) of $10, and hitting "go."

The main thing marketers need to realize is that this isn't 2006 anymore. We've had a heyday driven largely by search marketing, but things have changed significantly. Marketers must look at their business models and optimize them for what's happening today, to actively tie their search campaigns to real ROI metrics, and use as many free tools as they can.

BtoB: What's the most important search marketing take-away here?

Beriker: The search channel is still incredibly viable, but the marketplace has changed and marketers need to change along with it. The most sophisticated will get through this. They just need to be disciplined, creative and focused on all the data they have available.

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