26 November 2015
Topics in this article
  • Cost Optimization
  • Marketing

SEM is an increasingly important part of a marketer’s toolkit, and as ad spend and audience figures continue to rise, its importance is only set to increase. But for many marketers staying abreast of SEM and SEO trends and ensuring true value for money presents a number of challenges.

In the first six months of 2015, 52 percent of all digital advertising spend was consumed through paid search services according to IAB, representing a spend of just over £2bn in the UK alone. That’s a significant chunk of marketing budgets, and one that continues to grow.

As the market leader – with 89.2% of the global market share – Google continued to receive the vast majority of this spend; prompting calls from the European parliament for a break-up of Google’s monopoly. For marketers, this statistic is an important one to note, as ultimately any changes that Google makes to its algorithms or products will impact your SEM significantly. And, as a company that strives for continuous improvement, staying on-top of and effectively utilising the Google updates can often be challenge for in-house marketing teams and agencies alike.

For example, the restriction of keyword transparency for organic search that Google imposed in September 2013 – dubbed the “keyword data apocalypse” – created a number of obstacles for marketers and forced a significant shift in strategy. Interestingly though, Google’s Paid Search arm did not block this visibility into keywords; suggesting that transparency is a luxury only available to those who are willing to pay for it.

Why does this matter to you?

Google’s position in the market, and their willingness to exploit that position, can have a dramatic impact on how much you spend on search advertising and how effective this spend is at delivering the desired results.

And, as Google’s responsibility stops at the point at which you have bought an adword, your company could be wasting a significant percentage of advertising budgets on:

  • False click-throughs from bot traffic
  • Your own products inadvertently competing with each other (which artificially raises the price of the adword)
  • Customers clicking on the paid advert rather than the organic result which appears next to it in the list
  • Traffic leaving your website almost immediately after click-through(high bounce rate)

Navigating all of these potential pitfalls requires the correct expertise, and as companies continue to externalise; and specialist knowledge, resource and IP increasingly sits with external suppliers – brands are forced to engage specialist agencies partners to help.

Selecting the right partner

Like dancing a waltz, SEM and SEO requires discipline, a controlled structure and trust to bring the best out of both partners. It’s tricky as well. Your partner needs to know the basic footwork:

  • How do we improve the number of clicks to sale?
  • How do we come further up the organic search list?
  • How can we make the website more user friendly?
  • Is the paid traffic efficient in terms of conversion rate?
  • How do we stop similar products which we sell artificially pushing up the price of the adword?
  • Does the partner have proactive ideas of improving the search advertising?

Strong subject matter knowledge within a partner agency is key to success, and you need to ask these questions prior to bringing the agency on-board. Clearly then, selecting the correct agency partner for your business can be a complex challenge in itself, but the advantages of doing so are plentiful. Running an effective procurement/selection process – will not only ensure that the most appropriate agency for your needs is selected, but can also have some unexpected advantages.

For instance, when working with a major UK telecommunications client, Proxima conducted a full review of agency search methodology that went beyond simple supplier identification. By introducing appropriate partner agencies to the client and challenging the incumbent to work in a more sophisticated way we were able to reduce paid search costs by 11%; identify that there were tracking inconsistencies with 29% of the top 150 keywords; and eliminate misleading, confusing or incorrectly priced ads, leading to a significant saving. This was transformational for the client as not only did they have more control over the traffic coming to their site, but also the outcome of those site visits.

How do I know if I’m getting the best value for money from my agency?

Of course, cost shouldn’t be the primary differentiator when selecting an agency to help with your search marketing, but a full understanding of the cost structures agencies use will go a long way to ensuring that you are receiving true value for money from an agency.

Cost structures include: time and materials, fixed fee, percentage of spend with the search engine; and cost per acquisition. Which one of these you choose is very much dependent upon your company’s circumstances. For instance, if your margin per product sold is low then a cost per acquisition model might result in a loss for that individual acquisition. Similarly, if your overall paid spend with a search engine is low then you would be likely receive very little time from the agency on a percentage of spend model. i.e. it would probably not produce much of an output and would thus be a waste of money. Getting the structure correct from the beginning will ensure that you are getting the most out of your agency. Failure to do so could result in a partner who is failing to deliver the ROI expected of them.

Where can you get advice?

Talking to a sourcing advisor or a procurement team experienced in digital marketing will give you the basic foundations for getting the right partner to meet your specific needs. Be sure to engage procurement from the very beginning of the agency selection process, rather than at the contract (price) negotiation stage. This is where procurement can truly add the most value to the selection process, identifying the correct agencies, tailoring their offering to meet the needs of your business and asking the questions will ensure a truly collaborative relationship that delivers maximum ROI.

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