The 80/20 Rule Of Paid Search

There is a new concept being talked about in the web marketing industry. This new paradigm, dubbed the 80/20 rule of search, has sprung out of the realization that many of the earlier beliefs about search engine marketing are no longer true, or perhaps were never true in the first place.

When they were first introduced to search engine marketing (SEM), many marketers believed that with this innovative new concept, web marketing could be handled solely through the use of technology, and that human interaction wasn’t necessary in producing successful online campaigns. However, after results fell short time and again, these marketers were forced to take a second look at their original ideas.

Marketers are now learning that words like “autopilot” and “set it and forget it” are no more than advertising ploys used by companies that simply don’t understand what it takes to manage search effectively.

The new belief is that for SEM to live up to its promise, it is time for a completely new model – the 80/20 rule of search. The idea behind this rule is that:

20% of the success of a paid search program is rooted in technology; and

80% of the success of a paid search program is derived from a human component.

20% - Technology’s Role in the Process

There are three areas where technology is crucial in search engine marketing:

Gathering and sorting huge amounts of data from numerous engines. This includes information on impressions, clicks, number of conversions, and dollar value of conversions. All of this gives us the ability to capture information for every keyword/search engine combination.

Calculating important ROI metrics based on the data collected such as ROAS (Return On Advertising Spend); CTA (Cost To Acquire); CPL (Cost Per Lead); and CPO (Cost Per Order).

Producing a wide range of reports, including top-level summary reports, detailed trend analysis, grouped keyword analysis, and individual keywords.

The Other 80% - The Role of Human Intelligence

The 80% human component in the equation consists of marketers who interpret data and market conditions to make the best possible bidding decisions. These qualitative contributions involve developing expansive and relevant keyword sets as well as call-to-action marketing communications. They also include creating succinct landing pages that meet the expectations of search engine users and set consumers on the conversion path.

Keyword Development

Automated tools can certainly offer ideas for keyword development, but intuitive thinking is an essential factor in developing a robust keyword list. Just a few of the various issues to consider are product and brand names, synonyms, misspellings, singular and plural forms, features, benefits, and competitors.

Search Term Copywriting

Writing ads for search engines involves a combination of art and science that cannot be emulated by technology. One must adhere to the strict rules enforced by search engines while still drawing the reader in with a tempting promotion. Successful ads accomplish two goals: 1) encourage customers to click on your ad rather than your competitors’ ads, and 2) discourage non-qualified consumers who are not interested in your product or service. This task is not easy given that it must be achieved with three lines of text and no graphics.

When the proper marketing communication strategy is applied, the highest quality site traffic is delivered to your website with the greatest likelihood of conversion.

Destination Page Analysis

One of the biggest and most frequent errors made by companies in paid search engine marketing is consistently sending all searches to their home page or to pages that are totally irrelevant to the search term. Today’s web-users expect relevant information when they click on an ad, and when they do not receive it they quickly move on to their next option, which is usually your competition.

Review of Multiple Variables When Making Bidding Decisions

Each company must establish its own complex set of rules in making bid and position decisions. It is important to remember that being #1 isn’t always the right choice; often times dropping down in position makes more sense. Bid setting is not just about price, it’s more about relevant position. There are multiple variables that must be reviewed prior to making bidding decisions. Marketers must analyze the types of competitors listed above and below them on a search engine, the various marketing messages of competitors, the ROI effects of raising bids and conversely, of lowering bids, they must perform a historical position analysis, and they must consider the impact of affiliates, resellers and other third parties.

Conclusion

While the all-technology solution for paid search is clearly enticing because it involves less work and seems more cost-effective, the reality is that today’s technology is only capable of covering 20% of the requirement for an effective campaign. Technology is limited because it relies solely on quantitative factors and is unable to consider qualitative factors such as consumer search intentions, marketing copy triggers, and irrelevant landing page content.

That’s why it is imperative that the other 80% of a successful SEM program includes the human element. The result is a powerful combination of the complex intelligence of the human brain and cutting-edge technology. Apply this rule in your online marketing endeavors and you’ll soon benefit from the truly extraordinary power of the web.