Regaining Control of Your SEM Budget

By Matt Spiegel, CEO
Appeared in Media Connection

Chances are that if you're actively managing and optimizing your search marketing (SEM) campaigns then you are seeing positive results. The fact is that many trusted sources have published articles and reports that speak to how well search marketing works, how efficient it is compared to other channels, and how you can achieve multiple goals like branding, lead generation and direct sales all through search. But even if you are one of search marketing's more satisfied customers, you can probably be doing even better.

The self-service model of paid search advertising has been a tremendous success story both for the search engines and for the countless companies that can, in minutes, set up their account on Google, Yahoo!, and others. Many advertisers needs never extend beyond these tools, and the mutual benefit of eliminating middlemen creates efficiencies for both the advertiser and the search engine. However, as ROI is demonstrated and budgets increase in attempts to increase volume, campaigns grow in complexity. In order to achieve this scale and maintain efficiency, both the search engines and the marketers realize that additional support is needed. It is at this point, when human support resources are now being offered by the search engines, that many marketers make the wrong strategic decision.

At first look, the decision to enable each of the search engines to plan and execute your search strategy, as it relates to their property, does indeed make sense. Why hire a team when the media provider has offered to plan, execute, report on and optimize to your specific goals? However, a deeper dive and insight into the opportunity costs of this approach paints a substantially different picture. At the end of the day, while the engines are a great source of information, execution resources, and guidance, unbiased experts are needed to take your overall campaign to the next level and ensure that your goals are not only being met, but in the most efficient manner.

Here is an example to highlight this assertion: ABC Company is spending $200,000 plus a month on search marketing and spending a large portion of that budget with one particular search engine. This engine also provides support to manage all aspects of this campaign on behalf of the company, and the campaign is hitting ABC Company's goals with positive growth trends quarter over quarter. (This certainly doesn't sound problematic so far.) When it comes time to plan budgets for next year, the company asks the search engine, "how much more can we spend?" Armed with the knowledge of the potential for significant growth, ABC Company increases their search budget without reviewing alternative search placements. However, with some deeper, unbiased analysis ABC Company would find that if they reallocated some of that budget to one, two or even three other engines, they'd be able to drive higher volume at an even better ROI.

So why is this the case? It's the 80/20 rule. In other words, there comes a point when campaign expansion (within one particular source) is not as effective as expansion across multiple sources. Put another way, why expand your entire campaign on one source when 20 percent of it drives 80 percent of the results? Instead, achieve more profitable growth by placing some of the wasted, non-results producing part of the current campaign on additional sources.

Everyone will agree that it is in the search engines' best interest to ensure their clients' success; so why would a search property continue to spend their client's money even after the point of diminishing returns? The same reason your mortgage broker might steer you toward a certain lender, or a technology consultant might guide you toward a specific CRM package. As long as they are meeting your overall goals, the service provider is usually going to make the decision that makes them and their company the most money. This isn't wrong, but it is the reality.

If these same dollars are instead put through a strategic and holistic planning process (either through an agency or knowledgeable internal staff) there is no allegiance to a particular source. The most aggressive sales and support team will not automatically dominate your budget. Rather, overall efficiency will dictate strategic allocation to various distribution outlets.

Marketers do not turn over the reigns of their media budgets in any other media outlet the way they have started to with search marketing. Ask yourself, do magazine publishers dictate how many print ads you buy? Do the TV networks choose which programs you buy and what the message will be in your commercial? Or course not. So why allow yourself to rely solely on the engines for this type of strategic direction?

At the end of the day, the importance of working with the search providers and tapping their expertise and resources should not be overlooked, but the strategic development and management of your search marketing should be directed by those that you have specifically selected and entrusted with this responsibility.