How to Bag Budget for Search
At SMX West this month, I sat on a panel about how large advertisers are budgeting for 2011 and beyond. Here are three of the questions asked during the panel which can help you bag more budget for search marketing.
1. What’s your approach to budgeting and planning?
Prioritize According to Business Objectives – Figure out what countries, markets and product categories are most important and portion out the budget accordingly in your plans.
Play to the Strengths of PPC and SEO – Ask yourself whether your PPC and SEO objectives the same, or different. I’ve found that SEO delivers much higher quality visitors compared to PPC. Yet, as we all know, SEO takes a lot of time and resource and drives more long-term results. On the other hand, PPC has that advantage of instant reach, particularly when entering new markets where you may be less well-known and you are trying to better establish yourself.
Plan Ahead – When you do put your plans together, always think one step ahead and highlight funded vs. unfunded activities (with investment and projected metrics included) so that management know up front about opportunities that require additional investment for increased performance. There will be opportunities throughout the year where additional budget becomes available, so make sure you’re in line first.
2. How do you communicate performance to management and executives?
Communicate Often — Where management is concerned, it is always important to plan ahead, set clear metrics up front, and communicate regularly in order to keep search front of mind. They have a lot of things going on all the time, so it’s important not to operate within a bubble.
Speak Business Metrics — When you report out, keep it simple. There will always be a lot of detail behind the data, but it’s important to focus just on those high-level metrics that matter most to them. Depending upon your organization, soft metrics like awareness and engagement don’t always speak well to management and executives. What executives understand are business metrics, like revenue and return on investment, so this is often the best way to communicate performance to them.
Show Missed Opportunity – Gap Analysis is a great way to not only show performance from investment, but also to try and secure additional funding by looking at gaps in spending and gaps in performance as a result. In essence, it’s an easy, visual way to let management know what they are missing out on as a result of not spending a certain “ideal” amount.
3. Many companies devise quantifiable ways to set budgets. What solutions and process would you recommend?
You can’t justify what you can’t measure, so the key to justifying budgets is making sure you have strong web analytics in place.
To justify your budgets you want to get your post-click data linked as closely as possible to revenue because no one wants to put budget into something that has negative return. If you have an e-commerce operation in place then this is quite straight forward as your main measure will be online sales from search (from which you can easily calculate ROI). But sometimes, particularly in B2B environments with longer buy-cycles and big price-tags, your campaigns may be focused earlier on in the sales funnel; you need to fill the funnel and identify certain quality indicators of your visitors.
One way to do this is to identify a set of key events that demonstrate good quality engagement; events that are most likely to lead to a conversion or a sales lead. This could be anything from downloading a premium piece of literature, to locating a sales office, to requesting a quote or a demo. From this you can then start to track conversions and calculate business metrics such as cost per conversion.