Paid Search and the Value of Site Visits

March 20, 2008

Digital Marketing ChannelAdvisor By ChannelAdvisor

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The vast majority of all online retail paid search campaigns are judged on a few key success factors – orders and revenue and investment return.  There are many tactics used in order to drive conversions, increase average order value and ultimately increase the bottom line.

There are, however, some verticals that pose more of a challenge when it comes to closing the sale.  Are you offering free shipping? Are you the cheapest shop on the web?  Is your landing page crowded or confusing? – these are but a few of the obstacles that stand in the way of turning searchers into customers.

Should you jump ship?  Throw in the towel?  Cut your budget?  Rely more heavily on SEO?  Absolutely not.

Have you considered the fact that clicks = site visits = increased brand name awareness = customer lifetime value.

Let’s compare with an offline, broadcast campaign (TV, Print, Radio, etc.).  If a car dealership needs to increase revenue, sales, reduce inventory, etc., many hire an agency to develop messaging to spread the word.  The agency does its job by advertising all the messages needed to get people in the door, and in the door they come.

The word is out, people are visiting the dealer, they’re asking questions, they look around……but they’re not buying.

It’s a total loss!  All of those advertising dollars are wasted!

No, they’re not.  Even though revenue / sales numbers may not have hit the target, there was a substantial increase in foot traffic to the dealer.  Those that didn’t purchase now have the name of the dealership in their heads.  When they DO plan on making a purchase, your chances of winning that sale are much greater than if they were have never visited before – establishing a lifetime value.  Lifetime value is the total net benefit that a customer, or group of customers will provide a company over their total relationship with a company

That same reward can be seen in the realm of paid search.  So your last attempt at campaign optimization didn’t raise sales or orders.  Did impressions, clicks and click through rate increase?  If yes, you had an increased number of eyes on your site.  Was there an increase in newsletter signups?  Were there an increased number of emailed questions?

James Lamberti, SVP, Search and Media of ComScore drew attention to this subject in a recent interview: “Just because search is measured as a direct response and a cost per click, doesn’t mean that’s it’s full value. I think if brands would understand that actually the contribution to my overall sales or the lifetime value contribution is fifty times what I currently measure, you would certainly get their attention. To me it’s about understanding the value.”

Try to put a dollar value on a site visit, a newsletter signup, an emailed question, etc.  Then, you will realise that there IS value in a click, even if it doesn’t lead to an immediate sale.

written by Dennis Hayes — dennis.hayes at channeladvisor.com