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Search Ad Spending: Maximizing ROAS Through Analytics and Conversion Optimization

By: Raquel Hirsch
Date: January 6th, 2009

We all know that the economic downturn is shrinking the growth of all ad spending, including Search. But Search remains the “shining media” it has always been – it is simply not growing as quickly as it has in previous years.

eMarketer estimates that while the rate of search ad spending growth was down in 2008, search still grew 21% over 2007. “In fact, the rate of growth will fall over the next three years—but search ad spending growth will continue to be positive, in double digits every year—until 2012 when it will rise to nearly 14%.”

Search, it seems, is “recession-resistant.”

Smart Marketers will continue to spend increasing budgets on Search – and rightfully so, if they want to continue to make their ROAS (Return on Advertising Spend) accountable.

But are marketers managing and measuring ROAS properly?

Maybe not.

We are consistently seeing situations where two key areas are being overlooked:

1. There is no ongoing measurement of Search campaign performance or visitor behavior

2. Traffic is sent to a generic landing page (or the home page) and not to custom landing pages for segmented traffic

As a result, two bad things happen to smart marketers who are spending money on Search:

1. There is no visibility to the fact that a high percentage of Conversion come from a very small percentage of the Search budget (yes, the old 80-20 rule lives right here)

2. The Conversion Rate on the traffic is lower than it would be had they decided to create custom landing pages for segmented traffic (and this applies to even to ad groups that generate low traffic numbers)

Search marketing is a smart way to drive traffic to the site – but just investing in Search and not monitoring/dissecting the campaign to understand performance of ad groups, and just driving all the traffic to the same generic page is a big missed opportunity.

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Posted in: Search Engine Marketing | best practices | economic downturn

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