Getting a Jump on the Business Intelligence Imperative

By Matt Spiegel, CEO
Appeared in Search Engine Watch

A recommendation to all you marketing people: learn to love charts, graphs, and data. Search engine marketing is speeding the revolution of all forms of marketing from a purely creative expertise to one that begins and ends with quantitative data analysis, leaving little room for creativity in the middle.

All you search experts can relax a bit; you are already years ahead of the broader advertising community. But don’t relax for too long; the business intelligence bug has penetrated the C-suite, and detailed spreadsheets that report on impressions, clicks, orders, and ROAS aren’t exactly what they have in mind.

With this pending revolution, and I don’t think it is at all hype to call the coming changes revolutionary, I thought I’d share my tips to encourage useful data analysis -- and avoid time and effort analyzing useless information.

Find Meaning in Actions Other Than Sales

If this seems counterintuitive to you, you’re not alone. But sorry, that doesn’t make you right. If, at this point, you are not tracking your ROI from advertising to direct online transactions, stop reading this article and go solve that problem.

For the rest of you, recognize that capturing sales only reports on the bottom of the funnel. Whether or not your site has an ecommerce option, I’m sure you capture information requests, store locator searches, and configurations built, etc. Each and every one of these actions has a value. Your prospect hasn’t taken any of these steps just for fun; these are buying signals that should be understood, analyzed and modeled to predict future sales.

A simple example creates a scoring model based on likely conversion to goal. For instance, you might find that 1 percent of people who “request more information” come back later and purchase a product. You might also witness the fact that 10 percent of people who sign up for your e-newsletter purchase within the next month. Based on these historical percentages, you can assign a score (or dollar value) to each of these actions and move your search (or other media) dollars to keywords (placements) that actually have the biggest impact on sales.

Avoid Paralysis From Over-Analysis

Sometimes, having access to data and the ability to slice and dice it is a bad thing. The key to value-add business intelligence is to understand what problem you are trying to solve. This goal can be as basic as increasing a campaign’s average click-through rate, or as complex as trying to understand the optimal combination of product features, price point, keyword, and creative message.

Without a goal in mind, we are all susceptible to driving past the point of materiality. When you say to yourself, “self, wouldn’t it be nice to know {blank},” pause and ask, “could I do anything material with that information if I had it?" If the answer is no, find a different opportunity.

Penny Wise and Pound Foolish

Too many times, I’ve seen suggestions to reduce bids on a wide set of keywords because the goal is “not to have an average CPC above {x-cents}.” This goal alone adds no value. Instead of trying to limit cost, you should likely be asking if you have the right combination of keywords, creative, and product offer. Limiting cost certainly limits your risk and exposure, but it does nothing to grow your business through meaningful data analysis like creative and landing page testing.

Another pet peeve of mine is the “random” ROI goal. You know you are encountering this dreaded reality when, in asking about why the goal is what it is, you hear, “because that’s what it’s been.” At a certain point, efficiency and volume move in opposite directions. Don’t ignore the opportunity to grow your business because you are focused on delivering an unnecessarily high ROI.

Use Data to Be More Strategic, Not Just More Reactive

Constantly looking at yesterday’s or last week’s data has the tendency to cause reactive changes instead of strategic planning. Applied to search advertising, this reality shows itself in the over-manipulation of keyword bids. Moving bids up and down creates a roller-coaster effect on results without really improving a campaign. Each movement is a temporary optimization to either lower costs or increase transactions.

A better practice is to spot trends from this data that demonstrate the ability to truly shift campaign results by making sustainable improvements. Instead of overreacting to a one-day or one-week trend, try testing new creative that has the opportunity to lift click-through-rate instead of simply adjusting cost factors. This is only one of many potential methods, but I think you get the point.

Like I said, search marketers, I wouldn’t relax for long; there is much work to be done. Just because we are ahead of the curve now, doesn’t mean we’ll stay there. Business intelligence is more than a fad -- it’s the key to competition in the future.


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