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What mistakes to avoid when marketing online.
The exciting part of online marketing is that it allows marketers considerable leeway to experiment, make mistakes and learn from them; an unaffordable luxury in the world of offline marketing. In an excellent article titled “Ten Online Marketing Blunders to Avoid” in iMediaConnection,Tom Hespos hits the nail on the head and points out some of the common mistakes that marketers tend to make from time to time. These blunders cut across the type of marketing used, with some of them being related to display advertising or direct response marketing; so I’ve picked up three out of the ten most relevant mistakes that would apply to paid search engine advertising.

Over-targeting
Make no mistake- targeting is undeniably one of the most valuable features of search engine marketing and I’m all for it. In fact, I’ve work very closely with clients to explore and exploit all the targeting options that are available: for example, Google Adwords offers site targeting, position targeting, location targeting, hour-of-the-day targeting etc. In time, the targeting options will only get better (“narrower”) as the search engines get to know their users better and features such as personalized search gain ground.

The challenge with targeting though is that it is based on an assumption that we have defined our target audience perfectly and we know our target audience really well. The truth is that very often we don’t; and using too precise a targeting option can exclude potential customers. This is a judgment call that marketers will have to make- whether the incremental cost of broadening the target audience is worth the returns. I believe it may well be.

Manual management of campaigns
This is a tricky issue, simply because in many aspects of marketing—a cerebral science that thrives on human intelligence and understanding of human behavior—doing things manually is considered a positive differentiator. The virtues of manual activity probably don’t get highlighted anywhere more than in the area of search engine marketing.

Again, I appreciate why many things are better done manually and understand when it is not only inefficient to do things manually, but harmful to the business to do it thus. In the article referenced above, the writer talks about how a company is better off automating paid search advertising campaigns beyond a certain size, both in terms of the number of keywords and the spend (the author gives a cut off of $1000 per month, which is pretty low in my mind.) Imagine a campaign with thousands and thousands of keywords with varying bid amounts and costs, and it could take a non-experienced person weeks to put together all of the data available, crunch the numbers and come up with some actionable inferences — by which time, the campaign may have well changed course. 

In this case, using a bid management tool is perhaps the way to go. However, if you are experienced and working off CPA instead of CPC; I’m yet to find a bid managment package that is up to par… Even when you let the cerebral talent come through in defining the logic and the conditions that let the system “take care” of the optimization.

Failure to test
This is simply a cardinal sin in online marketing, simply because of the opportunities available to a marketer to test before and during a campaign. Testing before the campaign may include things like checking if the landing page is working, whether the links on the landing page (particularly the call to action) work fine, whether there are typos or incorrect phone numbers or contact details that could either make you look unprofessional or lose a prospect (or both), etc.

Testing during a campaign would mainly entail things like A/B split testing or keeping track of the results and acting on it and then continue the “monitor and modify” process till one is certain that a campaign is optimized (though if we look hard enough, we may still find areas for improvement, but it is prudent to be aware of the law of diminishing returns).

The failure to test all the elements of a campaign before it starts is probably the worse of the two, as it could straightaway drain a lot of precious time and money. Pre-launch testing is about preparation and prevention; while testing during the campaign is about maximizing the potential of the campaign. Smart marketers take care of both.

Are you being flexible with your online marketing budgets?
As we are well into the final quarter of the year and with the impending holiday season, companies are frantically working out their marketing budgets for next year. While there is no question about the need for well-planned budgets, one of the main issues with many companies, particularly those that may not strictly fit into the category of a small business, is the rigidity of those budgets once they have been firmed up. These companies insist that their marketing budgets are set in stone and cannot be adjusted, without realizing that they would be shooting themselves in the foot with such inflexibility.

Kevin Lee, a Clickz columnist, has covered this issue at some length in one of his recent columns, and makes a strong case for why media plans should be a lot more flexible. (http://www.clickz.com/showPage.html?page=3623603).  We touch upon some of the aspects highlighted by Kevin in this article.

Dynamic nature of online advertising/ marketing demands a flexible budget
Online advertising and marketing is evolving at a pace that makes forecasting anywhere beyond 3-6 months a serious professional hazard. New marketing channels with immense promise are mushrooming by the day while existing channels get even better with a continuous stream of features and functionality aimed primarily at targeting the right users. In such a scenario, there can be no bigger folly than being rendered immobile with too rigid a budget.

Seasonality: There are several factors that can necessitate an immediate change in the media/ marketing plan of a company. Seasonality is certainly something that marketers have to contend with; to some extent, one can plan for expected seasonal trends based on past history. However, every season inevitably throws up some new variables that one can only react to and it is the ability to respond to these variables that companies will certainly need to factor into their search marketing budgets. For example, keyword prices for some of the most important keywords might hit the roof during a particular season—does one just ignore the unexpected increase or make some allowances to accommodate those?

Competitor strategies: As Kevin points out in his article, competitor strategies can also have an impact on your online marketing efforts. Interestingly, the effects may not only be a result of what is done online but also what happens in the offline world. For example, a competitor might embark on a big viral marketing or word-of-mouth marketing campaign, which will undoubtedly trigger more searches related to the competitor. As a marketer, this is an ideal chance to “bask in reflected glory” and take advantage of the increased search volume with a few deft moves of your own. Question is, will your budget or media plan allow you to make those moves or will you be left a passive spectator?

Innovations and new options: This is probably the biggest variable- the pace of innovation and the roll out of new tools or features from various marketing channels. For example, say Google Adwords makes enhancements to the “site targeting” option that it currently offers, which makes this option a lot more attractive. Traditionally, site targeting has been more expensive than the regular bidding on the Google search network (or for that matter, even its content network) and therefore, it may not have figured in your search marketing strategy. However, you realize that the new enhancement(s) make “site targeting” a very good option that is at least worth trying out. As a marketer, you could re-allocate some of the spend from your existing channels to do a site targeted campaign, but you could be risking your current results by doing that. Does your marketing plan give you the leeway to get some additional funding to capitalize on these developments?

A better example may be the new opportunities presented by the emergence of new players or tie-ups between existing players. For example, take the recent advertising distribution deals between Google & MySpace (or MSN & Facebook) or Google & eBay. These tie-ups expand the potential of your advertising reach phenomenally and if the audiences are relevant, then why wouldn’t you take advantage of them? Or, consider the fact that there are rumors of Google taking over YouTube, which could throw open a world of online video advertising for online marketers. How will you leverage the new opportunity when it turns up?

It’s about being prepared
Of course, we realize the importance of thorough planning and the need for budgeting, as an organization cannot base its strategy execution on the unknown and unpredictable variables. However, organizations will need to build in the room to maneuver to take action based on what they see through the windscreen or the rear view mirror. So, when you sit down with your marketing planners or media planning agency, ensure that “dynamism” is taken care of, and will be continuously accounted for during the duration for which the plan is drawn out.

Finding the balance between organic search marketing and paid search marketing
The web analytics firm WebSideStory recently conducted a study of conversion patterns amongst visitors to business-to-consumer (B2C) e-commerce websites. The study (http://www.websidestory.com/company/news-events/press-releases/2006-09-22.html), which had a sample size of 57 million search engine visits over a period of 8 months this year, measured order conversions during the same visitor session. The finding: visits from paid search advertising converted only marginally better than visits from natural search results. While the former converted into an order at a conversion rate of 3.4%, visits originating from organic search results converted at 3.13%.

Before we delve into the implications of the above results, it is important to emphasize that these results should not be viewed in absolute terms. There are numerous variables and unknowns that can switch the “balance of power” either way. Moreover, it also needs to be clearly understood that the study does not translate to a reflection of ROI of the two types of search marketing either. (In fact, as the latest MarketingSherpa Search Engine Marketing Benchmark Report suggests, SEO efforts tend to yield a better ROI than paid search marketing—based on what marketers themselves have said).

The main implication of the WebSideStory study, according to us, is fairly simple: search marketers cannot ignore any one of these two forms of search marketing at the cost of the other. Prioritize by all means, but don’t ignore. If you are a marketer, you will have to use a combination of organic search engine traffic and pay per click advertising and optimize the allocation of spend depending on your objectives from time to time. This is a view that is gaining considerable momentum now as search marketing matures and we have the benefit of much better web analytics.

Strategizing SEO & PPC spend: balancing the opportunities and risks
Since search engine marketing is becoming an integral part of the marketing budgets of organizations, though admittedly there is a still quite some way to go before it gets a much larger share of the pie, the challenge is definitely to allocate the spend strategically, taking into account the short term and long term objectives.

Very often though, search marketing gets viewed only from the immediate short-term perspective— the need to meet sales targets for a quarter, for example. That may explain why paid search marketing gets allocated significantly more monetary resources by companies and SEO gets much lower priority.

However, what tends to be ignored is that visibility in the first few results can make a significant difference to a company’s marketing efforts—it has almost become indispensable. Yet, it is a process that takes sustained effort and considerable amount of time. 

A well-executed paid search advertising campaign will generate immediate results; however, the results are a function of the amount of money that can be put into the campaign. As soon as the funding stops, the sales or leads stop coming in.

To put it in broader business terms, PPC makes a difference to the immediate cash flow of companies, in terms of both inflow and outflow; the effects of an organic SEO campaign take much longer to make a perceptible difference to a company’s financials. However, with SEO, the law of decreasing investments generally applies ie. the investment required to continue to get the same level of results becomes lower after a certain level of optimization is achieved.

Of course, one is vulnerable to the changing search engine algorithms when solely dependent on organic search engine traffic. On the other hand, paid search marketing is immune (at least to a very large extent) to these changes, which means there is a greater predictability to the results one can obtain.

Therefore, investing in SEO and PPC is effectively about balancing the opportunities and the risks associated with both of these approaches. The most prudent choice is to take a long term view of the marketing goals and then breaking down those goals into various interim milestones, and allocating search engine spend accordingly to meet those interim goals optimally. The ultimate goal must be to maximize returns while reducing the acquisition cost.