Marketing Digital Report: Search - A measured approach

spend was rarely a priority.

Indeed, Andreas Pouros, managing director, search engine optimisation
(SEO) at Greenlight, says that at the time of hiring his agency, 50% of
its current clients did not have adequate search measurement through web
analytics in place. By 'adequate', he means tools that were capable of
comprehensively measuring paid and natural search separately, down to
the search term, and marrying that up with revenue delivery.

'The remaining 50% were not measuring search at all,' admits Pouros. In
some instances this was because they had no real web analytics in place.
When they did, the software often had not been set up to track search at
all, thereby requiring more money from the client to create reports to
get the information they wanted.

Even after the agency had advised them of the situation, Pouros says
that 30% of existing clients still did not measure search six months
later. It is clear, then, that it will take some time to help brands
appreciate the importance of measuring their search performance on an
ongoing basis.

According to a UK search engine marketing report by E-consultancy, 43%
of company search marketers did not know what their return on investment
from paid search was, while 61% did not know what the figure was from
SEO.

'While advertisers are allocating close to a third of their online
advertising budgets to search, including commercial and organic
listings, very few have a clear and unified measurement methodology for
the channel,' says Alain Portmann, founding partner at digital agency
Web Liquid.

A third of budgets might be a conservative figure; according to the
Internet Advertising Bureau, paid search accounted for 57% of online
search during the first half of 2007.

As the market becomes more sophisticated, and keyword prices rise,
brands are beginning to grasp the importance of such metrics. Accurate
tracking of search engine activity is vital to a website's ongoing
development - when a brand tracks its search engine paths, how long
customers stay on its site, and the content they find most interesting,
it can be used to stimulate more targeted communications.

Targeted tracking

More specifically, Lucy Allen, managing director of natural search and
online brand-positioning agency LBi Netrank, advises marketers to
consider metrics such as Google PageRank, site-traffic figures and
conversions (see essentials). She says that if a page has heavy traffic
but a high bounce rate (when consumers enter a site and fail to click on
any additional pages within it in a specified time period), an SEO
agency would look at the campaign's priorities and encourage the client
to change the page to increase conversions, rather than trying to
increase rankings in natural search results.

Measuring bounce rates on landing pages is one of the easiest ways of
spotting unsuccessful targeting of campaigns, or design and content
flaws within a website. 'One client's pay-per-click campaign was
delivering traffic to a page with a bounce rate of more than 80%,'
reveals Jenni Lloyd, online marketing consultant at social media agency
Nixon McInnes. 'Each of those clicks represented a wasted £5
cost.'

Neil Morgan, vice-president, marketing, at web analytics company
Omniture, identifies four types of online business, each with an
interest in specific types of statistics. An ecommerce site, he says,
will look at products sold, revenue, conversions per keyword, and
revenue per keyword. A media site is interested in visitors' time on
site, which ads they look at, and subscriptions sign-ups. For a B2B
site, the focus is lead metrics. Self-service sites, meanwhile, such as
online banking, need to examine the number of log-ins to customer
accounts driven by search.

Morgan believes that many brands are simply measuring the wrong areas.
'If you look at something like car insurance, people will search on that
term at the beginning of a sales cycle, then come back later in the
sales process and search on more specific terms,' he explains. 'The
keyword that produces the most click-throughs is not the one that drives
the most conversions; and most companies are optimising their spend on
click-throughs, rather than conversions.'

A surprisingly small number of companies, he believes, are tracking the
business outcome to the search campaign, but the figure is rising.
'Companies like Centerparcs and Lastminute.com are doing this now,' says
Morgan. 'We tell our clients: "Here is what is driving conversions so
that's what you should be spending more money on".'

Practical considerations

This 'last-click' issue is one of several obstacles that make the
business of measuring the success of search a tricky one. According to
Ryan Murdoch, analytics director at Mediaedge:cia, it means that
non-brand terms, used early on in the sales process, do not receive the
credit they deserve for their role in the purchase, since consumers are
disproportionately likely to convert through searches on brand
terms.

'Understanding this process is critical in order to plan
search-marketing budgets in the most cost-efficient manner,' says
Murdoch. 'By studying this at cookie level, we are able to examine how
consumers behave when searching for products.'

There are other stumbling blocks, too. Today's consumer operates in a
multichannel world - they may go online to get a quote for car
insurance, for example, but complete the sales process by making a
telephone call.

'You need the web analytics system to tie up with the CRM system. This
will join the dots, but is often where it falls down,' says Richard
Gregory, chief operating officer at Latitude. 'The web does not always
integrate with the back office as smoothly as one would like.'

The problem is exacerbated by the fact that companies routinely have
thousands of keywords under management at any one time.

With keyword inflation showing no sign of slowing, and companies having
to justify their spend on search, as on all other forms of marketing,
companies in such situations need to improve their lines of
communication - and fast.

- 'There are four types of online business, each with an interest in
specific statistics types: banking, ecommerce, media, B2B' - Neil
Morgan, Vice-president, marketing Omniture

- 'Marketers should consider metrics such as Google PageRank,
site-traffic figures and conversions' - Lucy Allen, Managing director
LBi Netrank

- 'When hired, 50% of Greenlight's current clients did not have adequate
search measurement in place' - Andreas Pouros, Managing director, SEO
Greenlight

CASE STUDY - FLYTHOMASCOOK

Flythomascook's digital agency, BLM Quantum, was dissatisfied with the
third-party bid management systems it used.

These all worked on the basis of 'click x conversion = target cost per
acquisition (CPA)'. However, conversion alters from week to week. In the
travel category, it is affected by factors such as the changing
importance of specific destinations, seat availability, seasonality and
price.

Last year, the agency developed its own system, which is designed to
accurately calculate: 'click x expected conversion = target CPA.' While
this difference may seem small, the agency says it has been
significant.

The tool allows for all the factors influencing conversion rates, and
enables BLM Quantum to find the expected conversion, based on the
previous week's figures along with availability, price and seasonality
(based on figures from the past few years) by destination.

Each week, together with Thomas Cook's yield management team, BLM
Quantum inputs by destination: last week's conversion figures,
availability, price and a seasonality factor. The amalgamation of these
numbers forms an expected conversion figure for the following week.

Knowing the target CPA and the expected conversion, it can calculate the
total average bid price across all keywords for that week. And with two
years-worth of conversion data by keyword, it can factor the expected
conversion and bid price down to a keyword level.

The tool has led to a dramatic improvement in results. Thomas Cook ran
two reports to measure the difference in sales between the same two
periods in 2006 and 2007 on Google.

While spend increased by 12%, the volume of sales increased by 71%, and
the CPA decreased by 35%. As for ROI, in 2006, every £1 spent
delivered £17 in revenue, while in 2007, the same delivered £27.

ESSENTIALS - WHAT TO MEASURE

- Google PageRank

- Site-traffic figures (including total visits, unique visits and page
views)

- Conversions

- Referring URLs

- Cost per acquisition

- Bounce rate.