OPINION: Creating sustained demand vs cost per conversion

Recently, I came across a well known client marketer ranting and raving about the cost per conversion levels that were achieved using paid search marketing and how one should constantly look at pushing down the CPA (cost per action, an equivalent for cost per conversion).

As the quietly peeved subject matter experts watched on, he went on to conclude the oratory with the declaration that rock bottom CPA levels and increasing the conversions are the factors based on which search marketing agencies should be judged.

In this suddenly complicated world of content proliferation compounded by the non-stop chatter in social media, should a smart marketer be obsessed with CPA or create a sustained demand model with CPA zones (when it comes to lead generation using search marketing programmes)?

Through our experience in executing search marketing-based demand generation programmes across marketers and markets that involve millions of keywords, we have come to the conclusion that today’'s consumer decision-making journey pushes user to make repeated cycles and loops through influence touch points, including review sites, blogs, social network chatter, vertical content sites, community answers sites, connected via search engines. 

Some decision makers arrive at a conversion decision via a ‘brand’ keyword search while others convert via more generic search phrases of which the ‘last search phrase’ before conversion is determined by a host of factors, including product category, brand equity and audience sophistication. Brand based conversions attract a much lower CPA compared to the generic category conversions for most product categories.

Now, let me say that the client marketer in our example was turning a blind eye to the fact that his declaration was purely based on a search marketing programme that was running almost totally on brand term based keywords alone. This brings us back to the above question - look good for now with brand only SEM programmes or look a little less good by investing in highly relevant product-category based keywords as well.

Looking good today

For any new incumbent agency, given the intense pressure to perform, the lowest hanging fruit is to prolong investment in brand search keywords as it not only earns them brownie-points, but it also makes the client marketer feel that he has a great search marketing programme.

But a critical factor being overlooked is the importance of influencing the ‘early journey’ research keywords which have a huge impact in the last-mile conversions as they form the basis of the ‘future conversions’ for the marketer.

Investing in those ‘early funnel research’ keywords is effectively creating an inroad to future conversion funnels for the brand. 

For example, a search for ‘'noise reduction sensor DSLR'’ is as important as '‘Canon D500 best rate online'’ –- while the former creates an ‘acceleration from info collection to active consideration’, the latter creates a quick trigger to purchase, provided the landing pages have outstanding content relevant to the search phrases in question.

Looking magnificent tomorrow

We recommend looking a little less good today to looking magnificent tomorrow, and here is how a smart marketer would approach the programme:

1. Deploy an always-on brand based’ SEM programme with the aim of maximising the exposure across all searched brand terms. This programme will have aggressive CPA targets and a steady conversion road map volume targets.                                   

2. Deploy an always-on high quality ‘category/ need/ product’ based SEM programme with the aim of maximising exposure across searches that have a critical influence on moving the brand in to the active consideration set (and future purchase). This programme does not focus on CPA targets and also have little focus on direct conversions. Budgets for this program are derived from ‘branding budgets’ that are normally invested in much poorly tracked (and poorly accountable) OOH programmes and other media.                                                                                                                                                             

3. Deploy a ‘burst’-based’ tactical promotion SEM programme which will addresses the ‘product searches’ through periodic intense, short bursts aimed at quick conversions. This programme will have a separate CPA target with focus on direct conversion volumes as well.

Well-defined search marketing (and other media based) demand generation programme plans that consider the todays as well as tomorrows are the programmes that have the best chance of attaining sustainable long term volume scale as well as the most efficient cost per conversion targets.