The Psychic Mailman

Imagine how much more powerful catalog distribution would be if you could employ a psychic mailman to wait outside the doors of your best customers’ homes with more than 100 offers, poised to ring the doorbell only at the moment buyers started thinking about a specific product or need. If a customer began thinking about a new down ski jacket, for instance, the psychic mailman would tear out the appropriate page from your catalog and hand it over.

Search engine marketing (SEM) can be your psychic mailman, delivering the perfect offer, tuned to the specific needs expressed by searchers. Every time a Website user types a term into a search engine, he is entering a “hunt mode” — looking for information, a solution to a problem, or perhaps something to buy. The good news is that you can adapt to SEM many of the catalog marketing practices you have used throughout the years to drive profit and revenue.

By applying proven direct marketing principles and instituting feedback loops in tracking the effectiveness of their marketing efforts, most catalogers understand what drives their business. This experience and knowledge will give them — and you — an advantage in understanding how to best execute an efficient SEM campaign. We can apply many of the best practices from the direct marketing of catalogs to the planning and execution of SEM.

There are several modes of SEM. Organic search, for instance, involves structuring your Website so as to garner a high position on search engines without paying for it outright. For this article, let’s focus primarily on the paid placement, which exists in an auction marketplace where you bid on keywords in Google, Overture (a Yahoo! company), FindWhat, Kanoodle, and other pay-per-click (PPC) engines against your competitors.

THE FOUNDATION OF SEM

Just as the list of names — both rented and house file — is the foundation of a direct mail campaign, the keyword list is the foundation of SEM. The number of qualified, high-conversion names on any list is finite; similarly the number of searches for every keyword in any campaign is also finite. When a direct mail list performs, you wish an additional 500,000 equally responsive names were available. Generally they’re not, though, so you have to explore other lists that may share some characteristics with your winning list.

In SEM, there is a limited supply of targeted, relevant keywords for any campaign. Similarly, the number of searches on any keyword performed every day or every month is limited. To make matters more challenging, the majority of search keyword traffic is sold in an auction marketplace. Unlike most other media, the auction marketplace creates a zero-sum game. If you don’t bid high enough for keywords, your competition gets the visibility, the traffic, and the opportunity to gain a customer.

It is critical that you have a system in place to determine the bid price that is appropriate for every keyword, at every point in time, based on the conversion attributes of that keyword and your return-on-investment objectives. When keywords have a high conversion rate, not only can you afford to bid more, but you can also expand your keyword list strategically by looking for similar keywords. In many cases, this keyword expansion process will uncover golden gems of keywords that may not have high search volume individually but nonetheless have high conversion and ROI. Finding new keywords with high ROI is similar to discovering smaller postal lists you can rent. When you add the hundreds or thousands of high-ROI keywords you have discovered over time, the lift in revenue and profit can be dramatic.

GETTING CREATIVE

A good keyword list doesn’t work in a vacuum, just as a good rented mailing list needs the right creative and offer. In SEM, you have two opportunities to tune creative. The first is the listing, or ad, itself. Think of the listing as the cover of the catalog you’d provide to the psychic mailman. The first thing a searcher will see after typing “cashmere sweater,” “air purifier,” or “Panasonic plasma HDTV” into the engine are the search listings that consist of a title (ranging in length from 25 characters to more than 40) and a description (ranging in length from 70 to 190 characters).

The ad is subject to certain editorial guidelines, just as there are guidelines as to what is acceptable on a catalog cover. It is critical that you find the right balance of compelling offer and clarity in your search ads. And because Google and Overture use different editorial guidelines and operate their auctions differently, the creative for each engine should be written appropriately.

Google copy should be as compelling as possible to take advantage of the click-through rate position bonus that Google factors in when determining ad position. On the other hand, because Overture allows for more characters than Google and doesn’t take click-through rates into consideration when assigning positions, you should craft your Overture ads to provide more explanation and description, as a means of prequalifying prospects.

And just as you would test cover creative, test the effectiveness of your ad creative. With SEM, you’ll have your results very fast — with a high-volume keyword you should be able to draw a conclusion regarding effectiveness within a week.

An even more critical aspect of your creative is the landing page on your site, where the searcher arrives after clicking on your ad. Think of the landing pages as the inside of the catalog delivered by your psychic mailman. Resist the temptation to use your home page as the landing page for your campaign — you wouldn’t have your psychic mailman hand the customer your master catalog without pointing out the right page, would you? Instead, deposit the online searcher on the best page of your site given the search terms he entered.

What is the best page? Use creativity and test this question. While you can’t test 10 catalogs cost-effectively, you can test 10 landing pages with a modicum of effort, particularly if you engage the services of the right firm to manage your paid search marketing campaign. A/B Darwinian testing, not to mention more-complex factorial analysis that takes into account the interaction effects of ad creative and landing page, can add a huge boost to overall efficiency, giving you a killer advantage in the auction marketplace.

Even if you don’t have the resources to generate custom landing pages so that you can test creative variables such as images, copy, price, and offers, chances are your site already has several potential landing pages that might deliver dramatically improved conversion at no additional development cost. For example, which landing page on a tool catalog site will convert best for the search term “cordless drill”: the home page, a search results page listing all the cordless drills with descriptions, a landing page listing only the four best-selling drills, or the most popular drill product page modified with cross-sells to the alternative choices? Only testing will determine the answer.

TESTING HELPS

Do you mail the same catalog year-round? If not, then empower your psychic mailman with updated keyword lists, ad creative, and landing pages — all tested and proven using the direct marketing principles you live and breathe. You may even want to have your team, agency, or search campaign management firm test predictive bid modeling that tunes listings based on the day of the week or the time of day, all based on your specific data.

SEM enables you to implement a real-time feedback loop in which the campaign is adjusted based on the specific results of every keyword in every engine. When launching campaigns, keyword lists, or landing pages, be sure to allocate media dollars to a testing phase so that you can assess which keywords, engines, prices, positions, creative, and landing pages will meet your ROI goals.

As a seasoned cataloger, you have a huge advantage in SEM. By adapting and applying to this relatively new medium the kinds of strategies that have worked for years, you can make a smooth transition into the world of search engine marketing.


Kevin Lee is CEO of Did-it.com, a search engine campaign management firm based in Rockville Centre, NY.

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