Search Engine Marketing Goals

SEM goals

Online business has to have goals. Period.

Yet, I guarantee you that the majority of small business owners set up their websites without any goals in mind. The few that did identify their goals at the outset are ahead of the pack.
The essence of search engine marketing (SEM) discipline is ROI and everything you do can be measured and optimized. Since search is almost always the top site traffic generation channel, think of SEM goals in context of your overall website objectives. Websites exist to attract and retain traffic so you need a holistic website monetization strategy that is centered around traffic and customer acquisition.

 SEM Strategy Goals

 
Strategy drives tactics, goals drive performance. Not other way around. It is very important that you are serious about your goals at the outset, and that you align your strategy and tactics to reach them. SEM is not much different from any other successful business venture or marketing program – you need goals!
You should essentially have two major sets of goals:

 

1)  traffic goals, and
2)  conversions goals

Note that it is not an either-or situation, and you need to work towards both goals to maximize your return on investment (ROI). Let’s start with your traffic goals.

Traffic Goal

Website traffic refers to the number of your website visits. To me, traffic refers to the overall number of visits, but I have seen some people only count unique visitors, aka “uniques.”

When you look at your website analytics tool (such as Google Analytics), you will see that the visits are coming from many different sources: Direct Traffic (when somebody types your domain URL directly into the browser), Referring Sites (such as Facebook). Search Engines (organic traffic) and Paid Search (SEM).

You should be realistic with your goals and consider the competitiveness of your industry. Your budget and time you will be devoting to promoting your website online play an important factor as well. For small businesses or new websites, I always suggest to start with 100 site visits a day as a realistic traffic goal. Once you reach a solid 100 visits a day, aim for 500, then a 1,000 as you grow bigger and bigger, constantly raising the bar. The goal is to always grow your site visits. The conversion metrics will give you an idea of the quality of your website traffic, but – simply put – the more website visits, the more sales and business leads you will generate.

How to Set up SEM Goals with a Built-in ROI

Here is my take on your website traffic goal when running SEM campaigns:

 
Your SEM traffic goal is the optimal number of clicks you acquire that will maximize your conversions at an acceptable cost.

Take a movement and read it again.

If you really grasp the concept above, you will be doing search engine marketing better than most. It is a simple principle, but again rarely followed.

For example, if you sell books online at an average of $10 a book, and you need to make at least $4 profit on each book sale to make money, then you should grow your traffic to a point at which you are no longer making an acceptable ROI (of course as long as you have the inventory to satisfy the demand). That is, before you reach the point of diminishing returns.

 


 

The volume of clicks is always positively correlated to cost (in other words, if you want to buy more relevant clicks you need to pay more per click). And as your cost increases, your ROI will decrease. There are always great performing keywords with very low search volume that are inexpensive (low CPC), and there are always more competitive keywords that cost more to buy, but represent great opportunity to expand your reach and customer base. Your goal is create a portfolio of keywords that collectively help you achieve your website monetization objectives and maximize your visibility in search engines at a positive return of investment. If you are only going after a handful of keywords, you may never grow your business big.

The game is played in the area (in gray on the chart below) where it is profitable for you and you should always maximize this opportunity until you are reaching the point of diminishing returns. It is basic economics and you don’t need to be an SEM guru to understand it. Take a look at the chart below to visualize:

On the chart to the left, point A is your optimal traffic volume that you should aim for. Point B is a point beyond which it will not be profitable to you to buy any more clicks (unless you optimized your campaigns but more on it later). C is your SEM budget.

This is not to be taken as a formula that you can easily plug the numbers into and figure out your numeric goals before you start your campaign, but rather as a blueprint to understand how much you should be investing in SEM to maximize your profit opportunity. You need run your SEM campaign for couple weeks or months to obtain enough data to make these assumptions.You will also need to constantly optimize your SEM campaigns so that you push the curve out and get more clicks for the same cost by driving higher efficiency. That is what the optimization of SEM campaigns is all about. See below.

The orange curve represents an optimized campaign. Let’s say that you optimized your keywords, ad copy, and landing pages and as a result you were able to get more clicks and more conversions at a given cost (i.e., you became more efficient).  Have you noticed how the point of diminishing returns (B) and your optimal click volume (A) moved? Now you can grow your business exponentially without incurring additional cost. You optimized it!

I am not suggesting that you need to draw these charts after you started your SEM campaign. You shouldn’t. However, I am trying to illustrate a basic concept behind any SEM campaign that will determine the success of your search marketing program. If you understand it and apply it, you will be able to make much better judgments about the performance of your SEM campaigns.

 

Many of the clients I consulted for were missing out on huge opportunities to get more orders or leads, because they couldn’t identify their point of diminishing returns. They thought they were doing ok, but in fact they were just harvesting the low hanging fruit, without ever realizing that they could double or triple their business.

 

Or, I hear something like:  “My SEM budget is $3K a month. My ROI is $10! I am happy. SEM is great.” Great to hear, but after I learn that your acceptable ROI is $3 and you spend marketing dollars elsewhere at a loss, I can’t help but get frustrated. Why are you leaving business on the table for your competitors to grab? Why aren’t you buying more clicks and getting more conversions until you reach the point of diminishing returns? You can probably spend $10K a month and triple your sales within the range of your acceptable ROI. There is also a question of margins, but that is something you need to decide when you set your ROI goal.

 

Once you start buying keywords, you should always try to determine the level of spend at which you will reach the point of diminishing returns and you will be able to establish your traffic goals effectively.

 
Conversion Goals

Conversions refer to the actions you want your website visitors to perform after they landed on your website. You always want to “convert” your website visitors into customers, sales, leads, donors, or brand enthusiasts.

If there is one thing that I want you to learn from reading this article is that you always need to have conversion goals on your website. If, for whatever reason, you resist tracking conversions on your site, you would only waste your time and money doing SEM. These concepts I am sharing here will work for you only when you measure what is happening on your website so that you can identify what is working and what is not.

You need to, first, identify the conversions, and, second, make sure you are tracking them.

Let’s start with identifying your website conversions. Depending on your business model, you may have just one desired action on your site (such as a sale), or you may have many. I have seen people setting up a lot of conversions, and it was a distraction, so I recommend focusing on 1-3.

Depending on what you do, common site conversions are:

1)   Orders / Sales
2)   Business Leads
3)   Subscriptions
4)  Social Media Engagements
5)  Store Locator Checks

Most businesses either sell or generate leads online, so you will most likely fall into the first two categories. If you don’t sell online and you want to generate traffic for your offline store, you should track how many of your website visitors look up your store(s) location. With the growth of social media, it is also wise to track how many Facebook likes, Twitter Followers or YouTube video views you have generated.

Your SEM conversion goal is the optimal number of conversions that will maximize your business at an acceptable cost.

You should see a link between clicks and conversions now. Clicks are to generate conversions, and conversions are to generate business. If you optimize well and buy the right keywords, there will always be a positive correlation between clicks and conversions (i.e., more clicks will results in more conversions…again, until you reach the point of diminishing returns)

Are things starting to make sense?

The relationship between conversions and cost is the same as the relationship between clicks and cost (we just discussed that clicks lead to conversions). That said, you can apply the same principle to conversions that we applied to website traffic– just replace clicks with conversions.

Unless you have limited product inventory, or provide services but can handle only a limited number of clients, you should aim for as many conversions as you can get at an acceptable cost you – i.e., until you reach a point of diminishing returns.

It is not about the volume (you always want as much as you can get, right?) as it is about how much acquiring the conversions will actually cost you.  If you sell books for $10 and need at least $4 profit, you will not pay more per conversion than $6, right? If you do, you will be selling your books at a loss. There is always that Cost-per-Action (CPA) beyond which it will no longer be profitable to you to do business.

That is why your conversion goal is determined by your acceptable CPA, which is how much you are willing to pay per conversion (conversion is used interchangeably with action – but it is always Cost-per-Action, and never Cost-per-Conversion, because it would be confused with Cost-per-Click, aka CPC). The lower the CPA the more profitable you are, but you need to set your goal, which is the cut-off point beyond which it would not be profitable for you to acquire more leads or orders.

If your goal is to generate business leads, you need to do some calculations to figure out your closing rate – i.e. turning your leads into clients. Let’s say that you close your SEM leads at 10% rate and you get your leads at $3 CPA; then, it will cost you around $30 to acquire a client. Figure out how much you charge on average for your service and set a cut-off point for your acceptable cost to acquire a new client via SEM.

With downloads or Facebook likes, you really measure site engagement but if your goal is to acquire Facebook fans, then just figure out how much you are willing to pay for a FB like.

Insider SEM Tips. By SearchDecoder.com

 

4 replies
  1. Marina Koletis
    Marina Koletis says:

    This is an excellent post and truly investigates how important it is to have goals. It really does start with goals. If you don’t establish any goals for your paid search campaign from the beginning, you won’t know where your business is now in terms of where you want to be. In that case, how will your business grow? This is key in determining ROI in addition to a suitable CPA that best fits your business model.

    Reply
  2. Matthew Capala
    Matthew Capala says:

    Thanks Marina. I always tell my clients: “Strategy Drives Tactics, Goals Drive Performance.” It is where every business – large or small – should start before their spend their first buck on PPC.

    Reply
  3. Search Engine Marketing
    Search Engine Marketing says:

    Nice post. Your information is really good. Thank you for sharing…
    Search engine Marketing is the best way where you can drive all the traffic you wish, for this you must have a quality website but if you don’t have a quality website that converts your prospects, you are wasting time and money.

    Reply

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