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.

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.