BEYOND SEARCH ENGINE MARKETING - INCREASING POST-CLICK CONVERSION RATES WITH INTELLIGENT SEARCH

Customer Inter@ction Solutions, Feb 2005 by Hekl, Jason

Every marketer who stays current with marketing tactics knows that SEM (search engine marketing) has very quickly become a critical part of the marketing mix. According to a MarketingSherpa survey of over 3,000 marketers, SEM accounts for 15 percent of total budgeted marketing expenditures, a percentage that has increased from virtually nothing a few years ago. Market dynamics ensure that SEM will continue to expand in coming years. Nearly 60 percent of consumers believe advertising has little relevance to them (Yankelovich, 2004), and a new report from the Stanford Institute for the Quantitative Study of Society reported that Internet users spend 50 percent more time online than they do watching television. SEM enables marketers to reach advertisingresistant online shoppers by targeting marketing messages to only those customers who have expressed interest in a keyword phrase of mutual significance. Marketers have embraced SEM because it represents one of the best mechanisms for reaching a targeted audience in a manner that is easily measurable, efficient and low in cost.

Problem: SEM Is Not A Silver Bullet

Appealing though it may be, SEM is not a panacea for demand generation problems. Accepted best practices to increase clickthrough rates and post-click conversion rates recommend that marketers create oneto-one-to-one relationships between keywords, ads and landing pages. In other words, if the marketer bids on the keyword "Roth IRA," the marketer should feature "Roth IRA" in both the ad and the landing page. In practice, few marketers have rhe time or resources to create individual ads and landing pages for every keyword a company tracks. Customer abandonment rates increase when the expected keyword is not included in the ad or landing page copy. Even when marketers follow best practice guidelines, two percent to three percent click-through rates and six percent to eight percent post-click conversion rates are considered exceptional. A campaign is performing well if you get one or two conversions (newsletter subscriptions, download registrations, completed sales, etc.) from every 1,000 ad impressions. Compared with traditional mass media advertising, SEM is arguably more effective and much lower in cost. However, considering the interactive potential of the Internet medium, and that most visitors initiated a search on a term relevant to the marketer's product or service, you could argue that the click-through and conversion numbers are disappointing. The reason: There is leakage in the SEM process. Potential customers, for unknown reasons, are not converting.

Those leaks are getting more costly all the time. Spending on paid searches will top $3.9 billion in 2004, according to eMarketer, and is expected to grow to $6.7 billion by 2009. Though still relatively inexpensive compared with other marketing tactics, the days when the average cost per click (CPC) was only pennies are long gone. MarketingSherpa estimates that the average CPC for complex b-to-b products and services ranges from $1.67 to $1.92. As more companies compete For top listings, average CPC for all categories will trend higher. The key to long-term SEM success, then, is to focus on the one variable over which the marketer has the most control - the post-click conversion rate.

Consumers Control Online Transactions

According to a report from MarketingSherpa.com, fears of adware and spyware prompt 38 percent of U.S. consumers to wipe cookies from their computers at least once per week, limiting the measurement of cookies-based post-click conversion tracking. A May 2004 study by BURST Media found that only 23 percent of survey respondents were amenable to providing non-personally identifiable information on a Web site to deliver more relevant ads. Consumers prefer to remain anonymous when online. The message is clear: Companies cannot dictate an online sales process; consumers are in control. Effective marketing recognizes this central truth, and it endeavors to influence customer behavior to accelerate a customer's movement through a personal buying process (hopefully to purchase your product or service). Tactics that essentially push a product or service, or outline features and benefits, or hope customers will respond, are proving increasingly ineffective. A more successful technique is to engage the customer in a dialog to understand his or her needs and then to deliver the product or service that most effectively satisfies those needs.

Use Landing Pages To Influence A Customer's Personal Buying Process

In an SEM environment, the marketer has a tremendous opportunity to influence buyer behavior through interactions on the landing page, even when the customer is completely unknown (save for the referring search phrase). Most specialized landing pages come in one of two flavors - either they are targeted to an immediate purchase transaction, or they feature multiple offers. Marketers have no way of knowing where their potential customers are in their personal buying process when they click through a paid search ad. The only clue is the selected keyword. Many landing pages, then, are biased toward the final stage in a customers buying process - the transaction.