Micro Marketing

Why Attend eMetrics?

My management asked me to justify the expense of attending the eMetrics Optimization Summit in San Francisco this summer. It's a reasonable request. My job at Microsoft is account management for customers of adCenter's search engine advertising. In other words, I work for a search engine. We don't have access to our clients' web analytics data. Where's the return on investment for a web analytics conference?

“At least one long-term goal is the same
for both search engines and advertisers:
return on the client's marketing spend.”

In shaping a response, I realized that my answer spoke as much to the future of search engine advertising as to the eMetrics Summit so I decided to answer publicly, here in my blog.

Let me state my assumptions up front.

1. At least one long-term goal is the same for both search engines and advertisers: return on the client's marketing spend.
2. In an increasingly competitive keyword auction, search advertising campaigns must become increasingly more efficient to remain profitable.
3. Efficiency for search advertising is derived from continually testing and making decisions based on the data.

Shared Goals

Sure every search engine's short term goal is to increase their revenue but choices that drive revenue at the cost of customer satisfaction are self-defeating in the long term. This is one game where the publisher and the advertiser both need to win. The goal of everyone working on a PPC campaign—whether in-house, agency, or search engine—is to increase the campaign's yield, to make it more efficient, to drive greater profit.

“CTR is a measure of cost, conversion a measure
of profit, but web analytics measure how you
move from one to another.”

Early in the game most advertisers optimize for CTR. As they become more sophisticated, they optimize for conversion. CTR is a measure of cost, conversion a measure of profit, but web analytics measure how you move from one to another. You can't get better at moving that needle between cost and profit without continually testing, making decisions based upon the results, then testing some more. Increasing the efficiency of your search advertising campaigns isn't an option, it's the cost of remaining in the game.

Scaling Search

There's a reason why both Google and Microsoft have developed web analytic solutions and offered them for free. (Microsoft hasn't actually offered their solution yet but it is in beta testing.) Neither Google nor Microsoft account managers access their clients' web analytic data to help manage their campaigns. So what's the value proposition? Satisfied customers are likely to remain customers and customers better able to monetize their campaigns are likely to be more satisfied. The search engines are convinced that web analytics work. Surprisingly, that may not be so true of our clients.

“The first step in improving the performance
of search engine advertising is to evangelize
the use of web analytics.”

The folks at Web Analytics Demystified recently determined that over 55% of Fortune 1000 companies don't employ any analytics on their web sites, other than log analysis, perhaps. That's a staggering figure, especially considering those same companies are probably spending handsomely on PPC advertising.

That fact is rapidly changing. Many companies are spending record amounts on web analytic solutions and scrambling to hire or train web analysts. In others, however, the first step in improving the performance of search engine advertising is to evangelize the use of web analytics.

Preaching to the Choir

It might seem that selling the value of web analytics at a search engine company would be like preaching to the choir but the value proposition isn't so simple. After all, account managers at a search engine don't directly access their client's analytic data. Their role is primarily as a consultant but it's difficult consulting about something with which you've had little or no experience. That's probably also true of anyone managing search advertising anywhere analytics isn't ingrained in their company's culture.

“What we need are evangelists, zealots,
missionaries—people championing analytics,
testing, and data-driven decisions with religious
fervor.”

The core competence of a PPC account manager will soon extend to a working knowledge of A/B and multivariate testing methodologies, an understanding of the statistical tools necessary to analyze large data sets, familiarity with the infrastructure of the web such as HTML, scripting languages, and protocols, experience with tools like Omniture, WebTrends, and Google Analytics, and—maybe most importantly—the ability to talk to people on either side of the aisle, both marketing and technology types. It's time to start training now, reading everything you can about web analytics, taking classes, attending conferences. And it's time to start talking about analytics.

What we need are evangelists, zealots, missionaries—people championing analytics, testing, and data-driven decisions with religious fervor, people raising their voices in the metaphoric wilderness. We need people to recognize that advertising becomes effective as it becomes more relevant, that analytics are essential for a deeper understanding of customer intent, and that understanding intent is a precursor to providing relevance.

That's what I need to do for my team. That's why I need to attend the eMetrics Summit.

Technorati Tags: eMetrics Optimization Summit, web analytics, PPC, search engine advertising, Microsoft, Google, AB split testing, multivariate testing, Charles Thrasher