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7 Key Benefits of CRO to an Effective SEM Budget

By Jon MacDonald
9 minute read | Last Updated: January 5, 2018

Learn how conversion optimization can become a key method for running an healthy and effective SEM budget.

Getting marketing messages seen online is quickly becoming a pay-to-play activity. The chance of reaching a significant number of prospects is directly related to the SEM budget and how much money a company is willing to invest to get the word out.

Facebook is all but demanding ad dollars from any company seeking expanded reach, and Google is slowly tightening the noose on the dream of “free” organic placement.

If you don’t pay, you don’t play.

The pay-to-play reality is driving up the need for qualified search engine marketing (SEM) assistance. Unfortunately, both the ecommerce client in need of help and the SEM company in business to provide that help, often fail to correctly frame the situation and develop an effective strategy for growth.

The pay-to-play reality is driving up the need for a qualified SEM & CRO alliance. Click To Tweet

Approached correctly, the push towards paid search can help an ecommerce website beat out the competition. Understanding that is the first step towards turning the perceived problem (pay-to-play) into a giant opportunity.

Going beyond great keywords and ads to making sure those advertising dollars convert into sales is the second step. Otherwise, the return on ad spend won’t be able to support the effort.

SEM leaders who learn and teach those two principles are positioned to reveal a win-win proposition their prospects and clients can get excited about.

My aim here, is to show you how to get that done.

First Step: Describe the Opportunity

A decade ago, things were much different. Black hat search engine optimization (SEO) tactics could push low-value and scam sites to the top of organic search results.

Legitimate companies were forced to fight back with black hat tactics of their own – things like hidden text, comment spamming, link exchanges, paid links, and doorway pages – but many got caught in the trap along with the bad guys.

Today’s marketers work in a much more stringent SEO environment. Not only do white hat tactics require more work and investment, but a typical Google search engine results page (SERP) will display paid ads in the top four positions, a Google knowledge graph after that, then Wikipedia and other information site results, then more ads at the bottom of the page. Businesses fight for the few organic front-page slots available.

Some still turn to hiring an SEO trickster who promises to get front-page placement for the business. That can work temporarily, but is likely to result in a penalty once Google catches on. Overnight, the company will disappear from search results altogether, and the revenue from organic search will stop.

Therein lies the opportunity

Many ecommerce website managers will keep beating the same old drum, trying to rank organically in search, hiring black hat and semi-black-hat SEO practitioners, and sometimes making big mistakes along the way.

Either way, they won’t be able to compete successfully against companies smart enough to hire a competent SEM agency to manage ad spend.

In essence: the stiffer the competition for organic placement on the SERP, the more opportunity for those willing to invest in SEM.

SEM agencies should be sharing that message with prospective clients at every opportunity. Ecommerce managers need SEM like never before.

Marketing is all about finding and exploiting a ridiculously unfair advantage @larrykim Click To Tweet

Second Step: Fixing the Biggest Mistake SEM Agencies Make

Companies look for SEM help when their internal resources and results from paid ads aren’t sufficient. The SEM company considers the situation, comes up with a plan to send the company more traffic, creates campaigns, and turns on the engine.

Increased traffic, however, does not always mean more sales. The idea that sales is “all in the numbers” has enough truth in it to sound right. The problem is, there’s more to the picture.
The most effective salespeople are usually not those who run the most leads or make the most calls. Real champions know how to turn a high percentage of their prospects into paying customers.

More traffic combined with a lousy conversion system means lousy sales—not more sales. Landing pages should be viewed as digital sales representatives. Rightly done, ads will send traffic to a page specifically designed to greet that traffic. It will be part of a well-thought-out sales path designed to leverage the interest generated by the ad into a sale.

Period.

If an ad campaigns increases traffic tenfold, but can’t generate enough sales to pay for itself, it has failed the client.

Here’s the mistake: SEM teams who develop great ad campaigns, then leave conversions up to the client end up creating strained relationships.

Clients will blame the SEM firm for the poor return on ad spend (ROAS), and the SEM firm will blame the client for the poor conversion rate (CR).

At The Good, we see that scenario over and over. The digital marketing manager badmouths the SEM company and—you know the rest.

Here’s how to fix it.

The Missing Ingredient in Effective Online Advertising

Early on in discussions with new prospects or clients, bring up the topic of conversion rates. Explain how the ability to get the company more traffic doesn’t power the train. Conversions fuel a business. Traffic without sales is wasted.

The responsibility for conversion rate optimization (CRO) must be clearly assigned and that assignment must be accepted by a qualified CRO entity.

Most SEM agencies don’t have the capability to manage CRO.

Those who think they do should take a close look at their CRO results and tactics. If there is no robust data-backed testing protocol integral to the strategy, then you’re not doing real CRO.

Not by a long shot.

On the other side of the coin, most companies believe their conversion rate abilities are keen. Use the same test. Are their conversion rates high for their industry, and are they rigorously testing and experimenting to keep getting better results?

If not, guess who’ll get blamed for low or negative ROAS? Since they’re conversion rate experts, it must be the SEM team’s fault … right?

Not being clear about the necessity for an effective and informed CRO strategy creates a circle of blame that cannot be broken.

You’ll find a list of talking points below. Use them to make the case for CRO. If you need help, call The Good. CRO is our focus. We can often step in to help companies get more sales from the SEM spend. Once sales are significantly greater than costs, everybody breathes a little easier and long-lasting relationships are formed.

7 Key Benefits of CRO to an Effective SEM Budget

  1. CRO gives you a clearer view of the target audience
    Understanding which demographics and channels convert highest gives you a better picture of your target audience. This can inform your other marketing and can help the targeting of your paid advertising.
  2. CRO creates more effective landing pages
    Landing pages must be optimized to identify prospects and turn them into customers. The business home page is seldom, if ever, the best choice. Landing pages are the next logical step from the ad that sent the visitor there. Drop the ball there, and you’ll lose much of the value you’ve created with your advertising campaign.
  3. CRO keeps your traffic costs affordable as advertising costs increase
    As advertising placement gets more competitive, costs will rise. The better conversion rate you have, the less your costs will rise with them.
  4. CRO provides more return on ad spend
    When your landing page works harder for you, you get better returns from your ad spend. We often see CRO tactics pull multiple times better ROAS, and that can save the SEM company’s reputation. Clients need more sales, not just more traffic.
  5. CRO results allow the SEM budget to grow
    CRO makes SEM work. Companies who see multiple dollars come back for every dollar invested in SEM often push up the ad spend to drive even more sales. Those ad spend dollars are created by ad they’re making possible. It’s a self-feeding system that can help you develop a competitive edge over your competition.
  6. CRO provides system-wide benefits
    Good CRO helps optimize the entire funnel, not just your landing page. This means not only increasing conversions on the first page they land on, but helping you increase your average order value, reduce shopping cart abandonment, retain more of these new customers you’ve spent money to bring, and more broadly give consumers a more pleasant online experience with your brand.
  7. CRO moves the SEM manager and the ecommerce manager to the same side of the table
    Once the conversion rate optimization card is put back into the deck, the game makes a whole lot more sense. CRO is the third leg to the stool. Without it, the combine efforts of a rock star SEM team and a company producing world-class products and services will never shine as brightly as they could. Someone must be capable of and responsible for CRO in any SEM strategy. Bar none.
7 Key Benefits of CRO to an Effective #SEM Budget Click To Tweet

Here’s the Good News About the SEM Budget

With conversion rate optimization in the mix to turn traffic into sales, the SEM budget makes total sense. Ad spend is rewarded by product or service sales.

When conversion rate optimization isn’t part of the strategy, return on ad spend is doomed to stay unspectacular or even run negative.

Here at The Good, we hear unfortunate stories all the time from ecommerce managers who are sure pay-per-click is a rigged system designed to suck as much money as possible from unsuspecting businesses.

When that argument comes up, we use the same two-step system just described to illustrate how the push towards pay-to-play can be turned into a competitive advantage and how a sound CRO strategy can make ad spend entirely justifiable.

Now… you can do the same.

Looking for a CRO partner? Call The Good.

Resources:

About the author: Jon MacDonald is founder and President of The Good, a conversion rate optimization firm that has achieved results for some of the largest online brands including Adobe, Nike, Xerox, Verizon, Intel and more. Jon regularly contributes content on conversion optimization to publications like Entrepreneur and Inc. He knows how to get visitors to take action.

1 Comment

  1. Fantastic Article Jon, very well written, I get asked about this subject alot and you nailed it! You obviously have the solutions to the pain!

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