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For about six years now, I’ve been pushing the concept of the “Seven Habits of Highly Effective SEM.” For those of you who haven’t yet read our fantastic whitepaper on this topic, the seven habits require choosing the right search engines, keywords, ad text, bids, landing pages, tracking, and targeting.
Today, I want to step back a little from the tactical habits that drive SEM success and introduce a new concept: the three things every SEM campaign must have for success. Here they are.
1. Great SEM
OK, this is a no-brainer. Basically, if you follow all seven best habits, you will create a great SEM campaign. At this point, you might think, “Game over; I’ve won!” Sadly, great SEM is only one-third of the equation. Think of it this way: imagine you create the world’s greatest Super Bowl ad for your store. The ad is so awesome that the next day, thousands of people jam your store’s parking lot and race to the entrance. There’s just one problem: the door to your store is locked, and the windows are boarded up. All that SEM work would be for naught. Which brings us to part two . . .
2. A Great Conversion Funnel
Your conversion funnel includes your ad text, landing page, shopping cart, and any page along the way. The right conversion funnel can help you compete against better-funded competitors. The key to success in conversion funnel optimization is testing, testing, testing. Test one-page landing pages versus two-page landing pages; red versus blue buttons; different shopping carts; long versus short forms. Companies that relentlessly test their conversion funnel will eventually eke out improvements that will drive profit.
3. A Competitive Offer
(Image source: http://blog.iongeo.com/?p=1793)
A great SEM effort with a great conversion funnel will still fail without a great offer. The offer is the “deal” you offer to customers. The amount you charge for your product, whether you offer free shipping, bonus items, a warranty, installation, customer support, a money-back guarantee, and in-store pick-up – these can all define the parameters of the offer.
A great offer accomplishes two things: it compels customers to choose your product or service over competitors, and it gives you enough profit to compete effectively in ad results. It’s important to understand that both of these elements are present in a great offer. For example, if I offered a new Ferrari for $50, I would certainly get a lot of people to buy cars, but I wouldn’t have any profit margin, and I couldn’t afford to buy ads. By contrast, an offer to sell a gallon of milk for $30 would give me a lot of margin but would result in no buyers.
As with SEM and conversion funnels, you arrive at the right (and therefore “great”) offer by testing. What happens if I offer $5 off – will the increase in conversion rate offset the lost margin? Does free shipping matter (usually, the answer is yes)? The more you test, the more you can discover what combination of factors will drive the best returns.
To finish the Super Bowl analogy, if SEM is a great TV ad and conversion funnel is a well-lit entrance to your store, the right offer is like having a store that’s clean, organized, and offers products people want at prices they are willing to pay.
So there you have it – SEM, conversion funnel, and offer – the three factors that combine to produce fantastically successful SEM campaigns. Easy, right?
Well, sadly, no. Many companies have no resources for conversion funnel testing and don’t have flexibility from “management” to test different offers. I get calls from these companies all the time. They’re hoping for an SEM miracle – that there’s some secret sauce we SEM gurus can sprinkle on top of their AdWords campaigns that will suddenly turn their frog of a campaign into a handsome prince. I wish SEM was a dark art and that I did have some magical powers, but I don’t, nor do any other SEM firms. So until we can concoct a magic potion of bats’ ears and newts, the three factors in this article are what you need for SEM success.
– David Rodnitzky, CEO