Getting Job Security through PPC…

India (SANEPR.com) July 8, 2008 -- Let's assume you're a search marketing ace at a mortgage company and you're running a PPC campaign for three keywords on Google. Your boss, we'll call him Bruce (but his real name is Eduardo), is trying to figure out whether he can justify his enormous monthly Adwords budget. So he asks you a seemingly simple question: "Which keyword is performing the best in the campaign?"

You recently passed the Google test, and you're eager to show off your new SEM expertise to a civilian. You pull up the following information for Bruce:

Based on the data, you confidently explain that at $48, "30 year mortgage" has the lowest cost per lead. The answer's obvious, and you get that "I'm bored with you now" look on his face. Bruce says, "That's terrific, so how many mortgages have we closed as a result of that keyword?

Bruce asks you politely to pause the campaign, as he tries to remember if he has HR on speed dial. Fast forward a few days. Let's assume that you did a little research (between frequent trips to Monster.com) and discover that the sales information you need resides in your company's CRM system. But you don't know how to combine that information with your PPC data. So you close your eyes and pray to the IT gods. The IT gods sprinkle a little code dust on your system and close the loop between your PPC application and your CRM system. Now when you generate a particular lead from your Web site, you can determine whether the lead eventually turns into an offline sale by looking at the sales stage. You can also identify the source of that sale (search engine, keyword, and ad text).

So with this additional, integrated information, let's revisit the scenario:

You know the cost per lead and now you also know the number of sales generated for each keyword. A little simple math gives you the new answer to Bruce's question: at $2,080, "fixed mortgage" required the fewest number of leads to generate a sale and therefore had the lowest ad cost per sale. So it must be the best performing keyword.

You email Bruce with the answer. A short time later he strolls down to your cube and apologies for giving you a "needs improvement" on your performance review. But as he starts thinking about the data, he points out that while ad cost per sale is a valuable metric, what he really needs to see is the profitability associated with the keyword and sale. He just completed an expensive management seminar where he learned that unprofitable sales are bad.

You vaguely remember reading about profitability on a blog somewhere and, genius that you are, realize that once the IT gods integrated the CRM system into your PPC application, you had all the information you needed to answer the profitability question. You explain to Bruce that if you just apply the actual revenue minus costs (which you know from your CRM data), you can figure out the gross profit of the sale. Then you just have to back out the ad cost and, a la kazam, you have true profitability.

"Now," you say to Bruce, "I can identify exactly which keywords are generating profitable sales." And you show him the following data:

What appeared initially to be the correct answer, "30 year mortgage," actually turns out to be the worst (-$100) when profitability is applied. "Fixed mortgage" is better at $2,020. But when you have the additional revenue and cost data, you can see that it isn't quite as good as "mortgage." When taking profitability into account, it's clear that at $2,400 "mortgage" is the undisputed champ.

Bruce eyes you suspiciously, realizing that the little twit he almost fired will now be asking for a raise.
So as a result of the PPC-CRM integration, you can automatically match sales to leads and calculate profitability.

Each time you close an offline sale and record the sale in your CRM system, the sale gets matched to the lead where the sale originated. With this data, you can identify which ads are responsible for your most profitable sales. Then you'll be able to maximize the profitability of your account by focusing your ad spend only on keywords and search engines that have proven to turn a profit. You can eliminate the rest.
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