Five steps to plan paid search expenditures and prove their effectiveness

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Readers often ask me questions like, "How do I determine how much money to invest in paid search marketing?" or "How can I prove that my paid search activity is valid?" Today I will provide some solutions to these two issues in my column.

There are five key steps you can take to anticipate and prove the effectiveness of paid search advertising:

1. Classification of industry and audience behavior

The first step in confirming paid search expenses should be to ensure that your users tend to search your products or services on the web. Of course, we will find that any industry you can think of will be searched, but it is clear that search engines can play a bigger role in some businesses and industries. For example, people often search the Internet for health-related problems. In fact, people often seek answers to questions through the Internet, especially search. So the pharmacy and the non?? The prescription drug brand can achieve better results through online marketing.

On the other hand, for some business-to-business businesses, such as industrial equipment, the search engine does not have the traditional "personal sales" role to play. The establishment and expansion of brand awareness may be more likely to be generated through various trade fairs or supplier meetings.

Therefore, you should allocate your investment in search marketing according to the importance of the search engine to the target audience.

2. Competitiveness analysis and evaluation benchmarks

The next step is to understand the competitive environment. Senior executives are concerned about what their competitors are doing, and sometimes the easiest way to determine their own spending is to highlight potential competition threats.

You can do some research to understand your competitor's behavior because it involves search marketing. You can use some free tools such as Spyfu to understand how competitors are selling and paying. At the very least you can do some useful, old-fashioned manual research--type your target keywords into search engines, see what brands or sites appear in your search results, and see how often your competitors appear in front of the search page for the most popular words. If no matter how many times you refresh, the competitor's site always appears on the front end of the page, they may have been maximizing paid search.

Finally, compare your brand's search rankings with your competitors, and see if your site will always be on the front page, even if you are constantly refreshing. Do you have a limited budget to make your brand less visible to your competitors? If so, you can use this as a reason to ask for additional investment.

3. Market Size

Once you have enough money to support it, then it's up to you to look at specific business and data. If you have a target audience of only 50 people, 1 million of the search marketing budget may not make any sense.

Look at the number of search terms in the target list and see how much business opportunities are in the real sense. How many people actually search for your product? For example, you are managing a local gym marketing work, and you want to know how many people are searching the web and want to be a member of the gym. Then you choose a keyword research tool (Google keyword tool is great, and is free), enter the relevant keywords, look at your city or region of the average monthly search volume. This way you know how many potential users are actively seeking the services you offer.

4.Traffic and CPC estimates

Of course, even if you find that 2000 of users in your area are looking for gym membership or other relevant information, it's very unlikely that you will attract all of these users to search for ads through your sponsors. You can estimate the percentage of traffic that can be accounted for by the average click-through rate. Generally we estimate that this ratio will be between 2% and 5%. So if you have 20000 people looking for information about a gym member every month, we can really attract 5% of our searchers and 1000 hits to our site.

The next thing you need to do is evaluate the average cost per click of your industry's keywords. Similarly, Google Keyword estimation tool can help you understand the search for the top three per click cost of the pay range. (It is worth mentioning that these estimates are often exaggerated.) If your activities are of high quality, it is recommended that you cut down the 20% on the basis of this estimate. So it costs about 2 dollars per click. This will mean that if you want to make sure these hits, you probably spend about 2000 dollars a month.

5. ROI Forecast

So, now that you've set the budget, the rest is to find your boss and ask for it, right? What any grass-roots manager wants to see is an analysis of what it can do for me, which is what is usually called the return on investment. In essence, if you plan to invest 2000 yuan a month in search marketing, how many new fitness members does it bring?

If you haven't done a paid search campaign for the company before, it's hard to predict conversion rates. But you can choose a variety of options (such as conservative, possible, positive) to help cushion your predictions. For illustrative purposes, you can do a quick ROI calculation similar to the following example: (1) 2000 U.S. dollars per month to attract 1000 visits to the website; (2) 5% of the users are expected to visit the gym: 50 (3) of those expected to visit 30% will sign the Membership Agreement: 15 (4) Total annual membership Cost: USD 300 (5) Total revenue generated by 20 new members per month: 6000 USD (6) Estimated return on investment: 3.0 Imagine a businessman who would refuse such a thoughtful and well planned return on investment?

Hopefully these five simple steps will help you plan and prove your search engine expenses.

(Original: March 28, 2011, compiled: Zeng Cui)