How
To Measure Search Engine Marketing ROI
By Charles
Preston
According
to the Search Engine Marketing Professional Organization (SEMPO),
advertisers spent $4 billion in 2004 on search marketing programs
and are expected to spend 39% more than that this year.
Search
engine marketing appears to be a great way to advertise but is
it right for you and your business? If you are not already employing
search engine marketing(SEM) for you business is there a way to
forecast the return should you decide to invest in it? Is there
a way to measure the results you are getting if you have already
invested in SEM?
The
answer is mostly yes. By utilizing data discovered in recently
released research surveys and with the help of a few free online
tools you can put begin to take some of the guesswork out of search
engine marketing ROI. By using Overture’s free keyword suggestion
tool (inventory.overture.com) you can get an idea of how many
times a keyword is getting searched each month. Another free tool
to use is called Good Keywords and can be downloaded from www.goodkeywords.com.
Let’s
say for instance that you are a mortgage broker in the Denver
Colorado area and you are interested in getting more leads for
your business. You have a website and are considering search engine
marketing to bring in some new leads. You get a quote from a search
engine marketing provider who can guarantee top 10 positions among
the major search engines for 6 months for your keywords for $1,500.00.
The
question now becomes is it worth it to you to spend the $1,500.00.
To figure this out we need to look at some numbers.
Berrier
& Associates estimate that 65% of all traffic generated by a search
in a search engine will go to the sites listed within the first
10 results (first page) returned for that search. By using Overture’s
keyword suggestion tool you discover that the term “Denver mortgage
broker” gets approximately 540 searches a month.
Using
this criteria a first page position for “Denver mortgage broker”
would bring you approximately 65% of 540 searches a month = 350
visitors to your site each month. Having a compelling title tag
in your website’s pages might even boost this visitor number since
the title tag is what appears as the clickable link in the search
results.
The
formula we just used would then be applied to all the other keywords
you are targeting such as “mortgage Denver” which gets approximately
2,600 searches a month or “mortgage company Denver” with 466 searches
a month. A first page placement for any of those would yield similar
results.
So
let’s say we just use the “Denver mortgage broker” key phrase
as our example with its estimated 350 visitors a month for a first
page position. You would now need to know what your website conversion
rate is. The website conversion rate is the ratio of leads or
sales you get per visitor amount. The average website conversion
rate is about 1-2% or 1-2 leads or sales for every 100 visitors
according to Shop.org.
If
your website conversion rate is average then you would expect
on average 2-3 good leads from your site each month for that one
first page listing. Then depending on your sales conversion rate
which is the number of sales per leads you get on average multiplied
by your average sale price you can begin to calculate what your
return might be.
So
let’s say as a mortgage broker you make roughly $2k on each deal
you broker and your sales conversion rate is 1 sale for every
3 quality leads. In any given month then you could estimate 1
sale at $2k out of the 3 quality leads generated from your website
which came as a result of the 350 visitors you got from being
on the first page of Google, Yahoo or MSN for the term “Denver
mortgage broker”.
You
paid the search engine marketing company $1,500.00 dollars for
6 months of first page listings. From one of those first page
listings you stand to gain $2k x 6 months = $12,000.00. That sounds
like a really good return for money invested.
In
closing the methodology outlined in this article to calculate
search engine marketing ROI is by no means 100% accurate due to
several factors but it is a good way to get a “feel” for what
you might get back for your marketing dollars. Its also a way
to get business owners to start thinking about how to better track
their e-business. I have just finsished building a quick and easy
seo tool that will enable you to do these calculations automatically
available for free at this link SEO
Tool
Copyright
2005 Charles Preston. All rights reserved.
Charles
Preston is an Austin based SEO with 7 years of industry experience.
Charles is the President of Click Response an internet marketing
company focused on teaching small businesses how to get the most
out of their internet marketing. For a free consultation or more
information please visit http://www.clickresponse.net
Article
Source: http://EzineArticles.com/
