Visibility

Many times those who use SEM (Search Engine Marketing) services don’t see much in the way of vendor-provided evidence that proves a distinct return on the investment. This is unfortunate because the lack of evidentiary success factors creates a lack of confidence in the concepts of SEM and the $14.7 billion industry that is growing around it.

This is a disservice that SEM vendors inflict upon themselves because a lack of proof of success (or failure) gives them no supporting information to justify their services or to suggest add-ons to their existing services. A lack of reporting to clients instills fear and doubt in the services that are provided industry wide.

Research supports the critical nature of failing to introduce statistics and produce an ROI statement. 2008 statistics show that ROI rates as one of the top four metrics used to gauge SEM success.

There are good firms out there who track activities and provide clear and concise reports to clients on a regular basis. It is worth the extra effort it requires to research emarketing service providers and identify the good guys.

ROI is, in fact, quite easy to determine when a campaign and services are based on valid factors - not smoke and mirrors. Effective and trackable campaigns are based on research, previous experience, pre-determined expectations and market knowledge. Steer clear of emarketers who leave these elements out.

What is ROI? Quite simply, ROI is the point at which you make back your investment in a particular product or service. The ROI for SEM activities is the time-scale in which you make enough from your campaigns to pay for them.

It is quite easy to calculate your SEM ROI - if you have the proper checks and balances in place.

You must:
•    Know where you stand before your campaign begins. This is your baseline.
•    Identify the results you expect from your campaign. Set your goal.
•    Know how much activity will repay your SEM investment. This is your break-even.
•    Know when your activities become revenue. This means you’ve surpassed your break-even and you’re in the black with your campaign!

If you have this information, you practically have an ROI calculator at your fingertips and you can make sure that you’re spending your money wisely. You can also understand what it takes to drive new business and plan how much growth and revenue you will have from your SEM investments.

Here is a simple example:

-    A medical specialty group averages $3000 per new patient. 
-    Their monthly emarketing investment is $1000.
-    Through their SEM, they have gained an average of 5 new customers per month.
-    Previous to the campaigns, no new customers had found the group via the Internet.
Obviously, this group realized their Return on Investment when one new patient chose to do business with them. Their campaign investment, averages out across the month, will be paid for before the first week has passed - Quite an impressive ROI!

Consider another example with these facts:
-    A home services company averages $2500 per deal.
-    Prior to engaging SEM, they were using an expensive call service for direct marketing that brought in a minimal quantity of leads. The call service campaign actually lost money.
-    After engaging SEM services to leverage their use of the Internet, the company gained no fewer than 260 leads per month – all 260 were generated from their website.

To keep it simple, let’s look at the results in this example in round figures:
-    50% of the Internet 260 leads are reached in follow-up = 130
-    30% of those leads made a purchase = 43
-    Apply the average deal amount ($2500) and this campaign converts $107,500 per month in sales revenue.
-    The campaign cost is $1200 per month.
This company is in the black on its campaign in an average of just one day. This is an amazing ROI!

Hard numbers are very telling of the effectiveness – or ineffectiveness – of SEM campaigns. Learning the hard campaign facts just after kick-off can enable service providers to tweak campaign elements to improve results or to expand the campaign’s goals and expectations.

SEM campaigns provide a distinct advantage in the quality of leads that they produce. Leads coming to your company through Internet search are more “qualified” because these companies have sought you out by specifically searching for your product or service. You can be quite confident that they are looking for products or services that you provide.

It is easy to see how growth can be predicted with ROI figures in hand. You can staff and train to handle new business and then ramp up your growth through your SEM efforts. Or you can stage your campaigns to control your growth so your existing staff can accommodate your activity. The key is: You are in control.

Knowing your emarketing ROI is your right. Every emarketing service provider should provide it. Knowing your emarketing ROI is also vital to your growth. It provides the necessary factors that help you accurately plan your business options, your long-term goals and the resources you will need to get there.