• by mackenzie , Ted Shergalis , December 1, 2009

The SEM pro faces challenges, but opportunity knocks

In a tight market, sem pros need more of an edge than ever to differentiate their brands and deliver results. Therefore, they bid high on keywords to grab as much demand as possible. But assuming this generates traffic, will visitors find cookie-cutter pages, a hit-and-miss scenario in terms of relevance? Or will they find personalized pages, providing measurable conversion lift?

Challenge No. 1: Greater visibility equals greater accountability.  Compared to traditional marketing, SEM results are extremely transparent. Add increased SEM investments and higher keyword and agency costs, and expectations go way up. Thus, SEM pros are as accountable as anyone in marketing, and execs scrutinize every dollar.

Challenge No. 2: Customer expectations have also increased. A few years ago, marketers were satisfied with weekly reports on clicks and site hits. Yet with the analytics in today's SEM software, customers want to know where visitors are coming from, the demographics, referring URLs, etc. They're digging deeper to better understand what they're getting for their spend.

Challenge No. 3: SEM pros themselves are unsatisfied with results. According to a March 2009 survey of SEM pros conducted on behalf of [x+1], only 20 percent rated the expected performance of SEM in 2009 as a 6 or 7 on a scale of 1-7; 57 percent ranked it as a 1 or 2.

These challenges can make a successful SEM program appear daunting. But the potential benefits - increased revenue, lower cost of sales and greater ROI - are the incentive to find solutions that address and overcome all barriers.

Opportunity No. 1: Value-based optimization. SEM pros need to move beyond a conversion mindset and ask, "What am I getting for that $25 acquisition?" If it led to $10 in profit - or worse, sales - they have to consider the lack of value or ROI and be equipped to respond and adjust accordingly.

Value-based optimization assesses not just the number of clicks and conversions, but also how customers got there and who they are. It digs deeper into site-side analytics to provide more actionable data.

Opportunity No. 2: Deeper, richer analytics and predictive results. Today, consumers expect more relevant results tied directly to their intentions. This pushes SEM pros to try innovative ways to consistently deliver a compelling user experience. They must deconstruct programs to understand user intent beyond just linking specific terms to specific products.

This is true across industries. A financial services firm, for example, found customers were searching on terms not necessarily related to a credit card or savings account, but something more akin to the stress of making payments on time. A more robust approach to Web analytics will address these kinds of needs in a meaningful way that builds customer loyalty.

Opportunity No. 3: The best of all three worlds. Some companies may wonder if they should invest in pay-per-click, SEM or display, but all three can be done concurrently - if they plan right and test first.

Marketers must understand how their audience learns about their brand, and determine the best way to deliver the right product at the right time and price.

Start with micro-payment testing. You don't need to take an "either/or" approach to select online marketing vehicles, and you won't bust the budget discovering what works. With a company card, you can buy a specific number of clicks or banners and test repeatedly to see what sticks before starting a full-blown campaign.

SEM will be an especially critical initiative going forward, as the pace of competition and innovation continues. Companies need to differentiate themselves by taking a hard look at online marketing processes, tactics and tools to ensure they're making the most out of each click to their pages.