Any marketer that has been involved in search engine marketing and search engine optimization understands the never-ending quest to attract customers at a reasonable cost. With acquisition costs that can rise to $60 to $100 per customer or more, there is a constant demand for better word lists, better bidding, and better ad copy to compel click-throughs on the meatiest words.
The reality is that there often simply is not enough highly affordable traffic to sustain business growth unless the marketer optimizes the landing page offer as well as the search terms and makes them work as a team!
Search Engine Marketing works -- provided you are
selling a product that has some demand, that is priced reasonably, and that you are able to satisfy the basics of security and fulfillment. We can buy product names, brand names, and other hot terms that are very specific to a product we specialize in, and qualified customers will find us.
The Vicious Cycle of SEM
The problem with search engine marketing is when you need to increase revenue and profitability. I cannot count the number of times I have heard of marketers who have developed a list of 2,000 to 20,000 words and phrases to garner traffic. This number is inevitably reduced, sometimes to 100-150 high-performing terms, when the cost per customer acquired soars beyond profitability.
Growing a list definitely grows traffic, but it can often be “bad traffic.” This traffic consists of words that are cheap, but have a .01 or even lower conversion rate during visits as well as words that have a 3% or more conversion rate, but end up costing $80-100 per acquired customer because of competition from other sellers.
For example, “ecommerce” is a high-traffic term, and results in a lot of clicks for online advertisers because the searchers are usually looking for at least information if not an actual product or service. Unfortunately, this traffic is so unqualified that actually converting a visitor into a buyer of a commerce platform, consulting service, or marketing service is very unlikely.
Alternatively, the names of brand name electronics equipment like Olympus C-460 can be high-conversion search terms, but even when they result in a purchase the yield on the sale does not merit the cost paid for the click. In our experience, you have to buy both product terms and category terms like these to maximize the volume of traffic of your online segment.
Optimize your Landing Pages
To make such a traffic purchase affordable, you need to optimize your “Landing Page” or the page that the PPC search term ad links to, on your site. Effective landing page optimization strategies include:
Assortment Optimization - Develop the ability to continually optimize assortment to make certain that you find the right offer for “category” words. A key/supporting product scheme can work, provided you have the technology to rotate and test what product to present as the leading offer and what other products to provide in the assortment.
Accessory Optimization - Deploy an aggressive accessory strategy to maximize AOV (average order value, or the total dollar value of mer
Substitution Optimization – With high-cost, highly specific terms, it can be advantageous to recommend higher-margin substitutes on your landing page. A slight increase in average margin can make better search positioning affordable.
Promotion Optimization - Test and optimize promotions including free shipping to encourage increased purchases during a qualified visit without needlessly sacrificing profit margin.
New software tools like Offermatica are focused on providing merchants or direct marketers with these types of optimizations.
For example, one company sold games for children and adults online and generated traffic around search terms largely selected by the brand names of the games they sold. This strategy was effective, but the words were competitive and they wanted more revenue per purchase. Using Offermatica, they providing an automated list of top-selling products on the pages where the target products were displayed, the company increased their AOV by 20% against a control group.
In another case, a company represents travel products that have radically different gross margins. The company should continue to drive traffic from external and internal search to the low-margin properties, but could also begin to purposefully display higher-margin alternatives in the same region and price range to increase the profitability of their acquired customers.
Finally, a consumer products retailer that generated much of their traffic around a limited range of brand-name products tested a gift-with-purchase strategy to try to increase conversion rates on expensive brand-based terms.
None of these marketing approaches are earth-shattering. They reflect well-trodden paths lain down by traditional retailers, catalog retailers, and even the late-night infomercials. They are also very effective.
Any retailer can drive traffic if they pay enough, and anyone can refine the traffic to pay relatively little for relatively low traffic. The search engine future, however, belongs to those who can sell enough to pay enough for a large, growing base of online customers.