Friday, June 19, 2009

New Study Finds the Majority of Managers Unhappy with Search Engine Marketing (SEM) Results

A newly published study by X+1 found that more than half (57%) of corporate marketers surveyed were dissatisfied with their search engine marketing (SEM) results. Surprising? Not really.

From managing online marketing, including search engine marketing (SEM) and search engine optimization (SEO), for nearly 15 years and running best practice global SEM programs at the Fortune 500 that have received praise from Google and Yahoo execs as best practices, my experience is that the problem isn't search engine marketing as a vehicle. The problem lies in the poor management of search engine marketing -- as well as many other areas of interactive marketing, an area I consider to be the most complex area of marketing today.

The specific underlying problem to this dissatisfaction, I believe, is rooted in marketing executives hiring inexperienced marketers to manage search engine marketing (SEM). Companies often stress technical skills over marketing skills. The result is companies commonly hire managers who are poorly equipped to handle this complex area, which requires not only significant direct marketing discipline but other marketing skills as well. I've witnessed it first hand when running global online marketing and SEM and SEO programs at the Fortune 500 level.

It is only through direct marketing and branding discipline that I have been able to led the turnaround of these areas, such as a more than 50% improvement in conversion rate on a nearly $10 million USD annual spend or achieving nearly triple the previous best conversion rate at a Fortune 50. It requires a mixture of direct marketing, branding principles, research and analytical skills blended with online marketing and behavioral principles. It demands a constant test and refine mindset and a control over all elements in the user flow -- not just the text ad at the search engine. It certainly requires hard work, discipline and a talented team, not just management by gut feeling, which is the fatal flaw of many campaigns. There really aren't any shortcuts to great results.

Even if you are not selling online, managing a successful SEM program or SEM campaign very much draws on direct marketing and branding principles. It is a lot like direct mail on steroids. The text ad listing at the search engine is only a part of the story, however, the reality is that the keywords and bidding are the areas SEM managers often focus most of their time on, neglecting other citical areas -- such as the user flow, testing and landing pages.

A short analogy with direct mail marketing and search engine marketing (SEM). The keywords list, in many ways, is like your mailing list. The actual text ad is a lot like the teaser copy on the outside of the envelope. The landing page is a lot like the first insert in the envelope. SEM potentially enables the marketer to understand how many people saw the envelope and how many opened it and how many inserts they went through before converting or leaving.

I developed a balance scorecard based methodology that I presented at AD-Tech a few years ago (with a campaign example from Motorola, where I managed online marketing, including, global SEM, SEO and blogging in addition to numerous online campaigns) that enabled targeting based on the user's point in the purchase funnel. Basically, the score permitted us to understand and focus on how far down the purchse funnel the user went and target according to where the user would commonly end. While most SEM campaigns insight is only as deep as whether users did or did not convert, we tried to understand how far down the funnel those who did not convert went and used that information to target them differently. We also targeted differently based on what we knew about groups most likely to use certain keywords and based on whether the user was likely to be an early adopter, etc. The result on the pilot was an 82% conversion rate, around three times the company's prior best campaigns. All of this flows out of the application of direct marketing principles into SEM campaigns and programs.

Instead of blaming SEM as a vehicle, let's start improving the hiring criteria for managing SEM and start managing this area with the kind of discipline it demands.