SEM and the Small Biz: Desperately Seeking Success, Part 2

Part 1 of this two-part series on search engine marketing for small businesses explains how low or no-cost technology tools are breaking down barriers to a strong Internet presence.

Small businesses have been reluctant to spend precious resources on a marketing medium that traditionally has not delivered — at least to them — on its promise. That medium is search engine marketing.

However, they will find it worthwhile to take another look at this particular tactic. A lot of low-cost or even free tools have arrived on the scene — such as Google Analytics, AWStats, CrazyEgg, HitTail and Mint — to help them track and tweak their campaigns. Also, as the space has matured, larger companies have adopted new approaches — ranging from establishing a baseline to deciding which metric generates the most return for that particular business — and small businesses can borrow from their experiences.

Where You Are Now

While some decision-making will be subjective — there is credible debate on which metric is best for a small business, for example — establishing a baseline for a firm’s current performance is essential, Niki Fielding, president of Digital Brand Expressions, told the E-Commerce Times.

Do this by comparing the performance of the site in the natural search results with those of the direct competitors, she said. “[Use] keywords that you know your prospective customers would use to find the solutions you provide. Once you know how you are showing up compared with the competition, you can research the search frequency of those keywords and make projections for the amount of traffic having top-ranking listings would bring.”

As a general rule of thumb, the top-performing natural listings generate 40 percent to 60 percent of the clicks from the first page of search results, Fielding noted.

“Armed with that information,” she continued, “you can study how much traffic those keywords are delivering now and optimize your site to draw more of the people looking for solutions from the search engines.”

After the site optimization process begins, the company should see a sharp increase in visits for the keywords it is targeting followed by steady increases month over month of new visitors finding the site in the natural listings.

“From this point, you should be able to set quantifiable targets for conversions,” said Fielding. “If you are an e-commerce site, you should be tracking closed sales generated by the natural listings produced by your [search engine optimization] efforts. If you are a [business-to-business] marketer trying to generate sales leads, you should be able to track these too. For brand marketers looking to track increased awareness and offline sales, the results will be harder to tie directly to SEO, but you should be able to draw strong inferences from increased success in offline channels as well.”

Formula for Success

If this sounds formulaic, that’s because it is. “There is definitely a science behind this that [small and mid-sized businesses] would do well to leverage,” Lorrie Thomas, principal of Lorrie Thomas Web Market, told the E-Commerce Times.

However, it is equally important to factor in other considerations when charting a campaign, she said.

For instance, “credibility — branding or awareness or prime visibility — is also a factor in search marketing success,” she said. “Not every campaign has to be ROI-focused. Some companies want to be the No. 1 ad — or at least above the fold — on search result pages, and measuring that requires ongoing tracking of a different sort, but it is still quantifiable.

What to Assess

Indeed, deciding what measure or benchmark to track will likely be the biggest decision a small business has to make in this progress. There are a number of metrics to follow, all of which are accompanied by persuasive arguments for their use.

A common measurement of effectiveness for a small business is the increase in the number of unique site visitors resulting from a campaign, which can easily be tracked with a free tool like Google Analytics, said Sarah Butler, marketing consultant for e4e Business Solutions.

“However, I think the more valuable measurement is the conversion rate of those visitors into new potential customers that give you their contact information as a result of the campaign,” she told the E-Commerce Times.

“SEM is only as effective as the program you have in place once your customer reaches your Web site,” Butler continued. “A potential customer should have a number of ways they can interact with you and compelling enough content that they’ll want to interact with you.”

“Conversions” is probably the single most important metric for small businesses, as they’re typically most concerned with the number of leads and sales driven by each campaign, Cavan Moon, an Internet marketing specialist at Dickinson Group, told the E-Commerce Times.

“Larger companies can write off some search engine marketing as “brand” spends, but few small and medium sized businesses are in a position to pay simply for traffic,” he said.

Every campaign will have different goals and use a different performance metric, said blogger Brian Carter, director of social media at Fuel Interactive.

For lead-generation campaigns, cost per lead is the most effective metric, he told the E-Commerce Times, and it can be applied to any keyword and ad. To track revenue-oriented search marketing campaigns, he likes a metric called “return on ad spend,” or ROAS. “This measures which campaign gets the most amount of money back based on the initial outlay.”

For instance, if a company has spent US$100 to make $500, the ROAS is 500 percent. Small businesses like this metric, because it spells out just what they are getting for their ad dollars — a concern that, no matter how good the tracking tools become — they will always have.

SEM and the Small Biz: Desperately Seeking Success, Part 1

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