Beware of Search Engine Marketing

Search Engine Marketing, sometimes called PPC,  is one of the most prevalent forms of digital marketing. Traditionally, this is where most large e-commerce brands spend the bulk of their dollars. While this makes sense for many companies there are still a lot of pitfalls in this form that most aren’t aware they are falling into them.

After reviewing hundreds of brands’ marketing strategies and data over the last year and half, I have come across 4 common mistakes:

1. Branded Keywords

We have done some extensive A/B testing with several brands and found that unless you have a competitor that is strongly targeting your keywords, the amount of traffic you are getting from your branded PPC will become identical in organic traffic if you turn off the spend. In other words, you are wasting your money. The only small argument for this is that by changing the messaging to an advertisement, you can drive higher conversions. However, this method still generally does not prove worthy.

2. Misrepresented ROI

The mother of all problems here. Here is an example, rounding for simplicity, of a recent brands search breakdown I saw:

1. $60,000 spent per month on SEM
2. $150,000 in revenue driven from this
3. $5,000 of this spent on branded keywords
4. $55,000 spent on non-branded terms.
5. $145,000 of the revenue was created by branded
6. $5,000 of revenue created by non-branded.
7. This means, for the $55,000 spent on non-branded keywords, the company is making $5,000. That is not good.

The problem here is that on the surface, they are spending $60,000 and making $150,000. That is generally totally acceptable in a marketing effort. To the untrained eye they are getting customers at a great rate. What they don’t know is almost 97% of that revenue is coming from customers that were already looking for their company. This will never grow their brand.

3. Broad Terms

It is not uncommon to see a women’s fashion company bid on the term “women’s fashion” or a shoe company bid on “shoes” as a keyword. The issue is: if a person is searching for the term “shoes” what’s the chances they are looking for the type of shoes you carry, or even looking to purchase? People tend to be more specific when there is intent to purchase. Someone searching for shoes is much more likely to just be browsing for whatever reason. Seeing that you pay per click, and these people are going to just click out of curiosity, these broad terms can become very expensive, very quickly.

4. Brand Building

With SEM it is negligible. Make sure you are putting in the work to build an actual brand and identity if you want to build anything more than a house of cards the moment you stop doing SEM.

Long story short: the focus needs to be on understanding what a customer will be looking for. Specifically, that indicates that they will want to buy your product. You can grab this need, which is definitely beneficial, but be careful of how much of your marketing mix you dedicate to search.

About: Hawke Media is full service outsourced CMO and digital advertising agency with clients in Santa Monica, Los Angeles, San Jose, San Francisco, Chicago and New York.

 

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