SEM & Analytics - The Love vs. Hate Relationship Continues
I figured a little personal anecdote would be best for this post. At my wedding, my brother-in-law gave a speech in which he said to 250 guests. "In this world, most people see either a glass of water that is (1) Half Empty or (2) Half Full. And then there's Greg who sees Chocolate Milk." Well, if your wondering where I am going with this, I am trying to make the point that analytics is playing a major part in the decreasing interest of outsourcing paid search. Think about it, Search Marketers, Directors and VP's of marketing are now realizing that they are limited in what they can afford except for their brand or trademarked names. Everything else that is non-brand is now identified as unprofitable for them based on the KPIs (ROAS%, CPO, CPA, etc..) So now, paid search which evolved from a traffic PWYG (Pay what you get) model, to a quality score and metric based model where web analytics is (for the most part) is revealing more wounds than band-aids of what is profitable.
From my experience, I have seen a trend in almost every client where their Brand Name is one of only a few campaigns that are actually turning into a profit based upon their margins or set ROAS%. Furthermore, it is this exact scenario that is forcing most companies to focus more on full blown SEO (Social Media, Blogs, Universal Search) to drive qualified traffic at no cost (except for the search agency fees if applicable) rather than SEM.
But is it really just a cost/performance problem? Nope, it gets much deeper than that. Its more of a "SEM worthiness" business model problem. It really depends on the industry they are in, competition, affiliates, resellers, and most importantly product margins. Unless you have killer margins in an opportunistic niche market, SEM & Analytics can be a double edged sword (I prefer Lightsaber) and it's a battle that needs to be fought.
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Posted by: Christopher | Monday, July 23, 2007 at 04:46 PM