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.

2 comments
Chris Mayes
Chris Mayes

I dont think any of what you say is rocket science. the problem is that the tools to measure cost money, take time to learn and are sometimes scattered in places that are difficult to influence. So in corporates with Eu doing CRM but not analytics, US doing analytics but not sharing, websites not notsed for lead generation WW..... there are some who know whats required and can run the analysis, but arent getting access to the right tools

Maria Pergolino
Maria Pergolino

I agree that these metrics aren't enough to accurately measure a campaign, but I believe part of the results come from B2B marketers, who struggle to with this data, not because they are ignoring these metrics, but because long sales cycles and multiple decision makers make it difficult to actually calculate. As marketers become better at using marketing automation and CRM systems, and can find ways to accurately integrate data from web analytics tools, we will see a shift in this analytic disconnect.