Survey: Search Marketers Underutilizing Sophisticated Metrics

The fol­low­ing is a post I wrote for SearchEngineLand.

Dylan wrote, “When you ain’t got nothin’, you got noth­ing to lose,” but when you’re spend­ing real dol­lars on search engine mar­ket­ing you have plenty lose. And yet, accord­ing recent sur­vey of 500 mar­keters, most search mar­keters still use the most basic met­rics in eval­u­at­ing the per­for­mance of their programs.

How basic?

While mar­keters picked con­ver­sion as their most impor­tant met­ric to opti­mize search cam­paigns, click through rate and cost per click, rel­a­tively less mean­ing­ful met­rics, still ranked sec­ond and third.

These are cer­tainly impor­tant met­rics, but what about some­thing slightly less basic, like rev­enue, leads or CPA? Well, even though 85 per­cent of our respon­dents said their pri­mary goal was to sell prod­ucts or ser­vices online, 31 per­cent can­not mea­sure cost per cus­tomer (or sale) nor return on ad spend, and 40 per­cent do not know how to accu­rately mea­sure profit per cus­tomer (or order).

Far too many search mar­keters are still mak­ing cam­paign deci­sions based on super­fi­cial met­rics, such as click through rates and cost per click, and can opti­mize cam­paign effec­tive­ness by increas­ing focus on deeper revenue-impacting mea­sure­ments, such as profit per order, cost per unique cus­tomer and activ­ity mea­sure­ments such as time spent on site or click path.

Addi­tion­ally, the sur­vey indi­cated the major­ity of search mar­keters are man­u­ally man­ag­ing key­words using Excel, lim­it­ing their abil­ity to effec­tively scale search mar­ket­ing cam­paigns.

Accord­ing to the survey:

• Mar­keters picked cost per click and click through rate as among their top met­rics to opti­mize search cam­paigns instead of deeper met­rics such as return on ad spend, cost per cus­tomer (or sale) or profit per order

• 43 per­cent of e-commerce respon­dents do not know how to accu­rately mea­sure profit per cus­tomer (or order)

• 67 per­cent of respon­dents indi­cated not hav­ing enough time to effec­tively man­age cam­paigns as their top issue in search mar­ket­ing, while only 35 per­cent use an auto­mated bid­ding solution

Incor­po­rat­ing bid man­age­ment solu­tions will enable cus­tomers to uti­lize both the most com­mon met­rics they need to opti­mize their cam­paigns like cost-per-customer and return on ad spend, and advanced met­rics like profit per cus­tomer and life­time value per customer.

Search engine mar­ket­ing has been around for over 10 years now. Let’s help each other move beyond the basics and pro­pel the indus­try forward.

The sur­vey was con­ducted by Omni­ture as a part of the Omni­ture Online Mar­ket­ing Research Report. Because the sur­vey is ongo­ing, results over time may change. These results are as of April 8, 2009.