Implementing Segmented ROI Analysis
By Mark Casali
To succeed in online marketing, an agency must be committed to adaptation, innovation, and, of course, optimization. The industry seems to produce a never ending array of methods to improve and refine account performance, but as search marketers, our very own measure of success remains a stagnant and undeveloped concept. Return on Investment, or “ROI,” is typically applied as a blanket-metric, and only assessed at the account level. This evaluation of ROI is distorting goals and leaving perhaps the most obvious optimization opportunities unexposed. In an industry that survives on advancements, it is essential that we begin assessing value and success with more comprehensive and revealing measures.
The easiest method of improving the ROI measurement is to move away from an account level assessment. Regardless of how the marketer ultimately defines ROI, each product/service category should be tracked with an individual return on investment goal. Consider a sporting goods store that has a mature paid search marketing account to promote baseball, football, and soccer ball sales. The store incurs $1,000 of engine spend on each of the three product categories. Revenue earned by the paid search account is $2,500, $2,000, and $800, for baseball, football, and soccer balls, respectively. The store has identified an ROI goal of 1.5 as their break-even threshold; this goal includes variables such as product cost, growth strategies, and lifetime value. Account level ROI is calculated as $5,300 of total revenue divided by a total $3,000 of engine spend, for a return of 1.8.
Most agencies will look at this data and determine that the account is healthy with an ROI well over their goal of 1.5. Additional optimization techniques could be performed within the account to improve click through rates, strengthen conversion rates, and refine cost per click bids. These strategies may well benefit account performance, however, there is a more immediate problem that will be exposed by refining our ROI calculation. If category level ROI metrics are analyzed, the marketer will determine that returns equal 2.5, 2.0, and 0.8 for baseballs, footballs, and soccer balls, respectively. With an ROI less than 1.5, the client is earning additional incremental revenue in the soccer balls channel, but they are detracting from their overall profitability. In fact, the soccer balls product channel would have to nearly double revenue to reach the desired ROI goal. It is unlikely that traditional optimization techniques bridge this gap, especially in a mature campaign. In reality, traditional optimization in this account is insignificant. Segmented ROI analysis has revealed a far more pressing performance issue, and until the soccer ball campaign is suspended, the account, from a profitability standpoint, will significantly underachieve.
This example is admittedly basic, but the underlying principle of identifying and striving towards multiple ROI goals is a powerful optimization technique. The sporting goods store has a simple product offering of three different types of equipment, but actual companies market countless amounts of products and services. Logically, the marketing campaigns promoting these products and services will achieve various levels of success, and some will even fail. So, with such drastic levels of performance across an account, it seems counterintuitive to optimize around a one-size-fits-all ROI goal. A better approach is to calculate separate ROI objectives for each product/service category. This strategy is very much in line with the way search marketers update bids based on keyword performance. The marketer would never bid on a keyword with a negative contribution margin; why then would they apply budget to an entire product category that loses money? This granular approach of assessing ROI on a category/product level is applicable to companies ranging from full scale e-retailers with numerous product lines to institutions of higher education with multiple programs of study.
Once marketers move towards a more segmented ROI analysis, they should also reconsider how they set performance goals. When establishing an ROI goal, the agency or client should develop customized objectives for each product/service category based on a variety of variables including historical performance, the product costs and gross margins of the related products/services, growth strategies, and the assessed lifetime value of a customer associated with a product/service. For example, a marketer may determine that a particular campaign drives so many recurring purchases that a return on investment goal under 1.0 could, in fact, be appropriate and representative of long-term profitability. When establishing ROI goals, the marketer or client should also acknowledge the motives of the campaign. If the ROI goal is set too high, the profitability of the account will be strong, but the volume and reach of the campaign will be restricted. Conversely, if the ROI goal is too low, the campaign will see stronger volume but lower margins.
Overall, the limitations of an account level return on investment assessment are becoming more and more problematic for marketers. Optimization opportunities are lost, and agencies are left striving towards goals that may or may not be advantageous to the client. To correct this problem, companies should track performance for each product/service category and even identify separate financial goals for each of these categories. If this level of granularity is already available, the data should be shared with the company’s search agency so the paid search campaigns can be managed more accurately. The resulting account will offer a deeper level of visibility into performance and help online marketers quickly and easily improve profitability. This is one of the last pieces of low hanging fruit available to paid search advertisers; don’t let it go to waste.
Synapse SEM Launches New Content Writing Services
Boston—May 14, 2012— Synapse SEM is pleased to announce that it will be offering content writing services to existing and prospective Synapse clients starting June 1st. Synapse SEM, known for its comprehensive SEO audits and consulting services, identified a growing need for writing services among existing and prospective clients. As co-founder Paul Benson stated, “When we first engage with a new client, one of the first steps is conducting a thorough SEO audit to identify gaps between existing content and required content based on the targeted keyword set. The issue is that once we identify multiple pages that need to be created, there typically isn’t a dedicated client resource who can act on our recommendations. Our goal is to remove the content writing burden from our clients’ shoulders, and create compelling, market-appropriate content focused on increasing conversions and improving ROI.”
In addition to writing high quality content for new products and services, Synapse SEM will also be generating content for blog posts, white papers, case studies, email marketing campaigns, press releases, and other materials as needed. “Our goal is to meet the evolving needs of our clients and provide them with as much value as possible” said company co-founder Mark Casali. “Compelling content can be a powerful tool to increase online performance, and we want to make sure our clients are leveraging this opportunity to its fullest potential.”
About Synapse SEM
Synapse SEM is a full service online marketing firm that leverages robust data analysis and statistics to provide its clients with deeper insights and uncover otherwise overlooked opportunities. With core competencies in paid search advertising, search engine optimization, social media marketing, mobile advertising and conversion optimization, the company develops, implements, and executes online marketing strategies focused on maximizing its clients’ ROI. Leveraging proprietary data analysis techniques and experienced subject matter experts, the agency is committed to achieving unparalleled results and providing the highest quality of service to its clients. For more information on Synapse SEM, LLC, call 781-591-0752 or visit www.synapsesem.com.
Synapse SEM Speaks at SES
Boston—January 9, 2012—Paul Benson, Co-founder of online marketing firm Synapse SEM, LLC, has been selected as a featured speaker at the upcoming SES Conference in San Diego. Mr. Benson will be introducing Synapse SEM’s new suite of statistical applications during the Advanced Paid Search Tactics session, which will be held on Thursday, February 9th at 2:30pm PST.
The tools to be introduced help search marketers make better decisions and obtain deeper insights from the data they analyze every day. “Despite more advanced functionality, paid search advertisers are still faced with the challenge of deciding when to act based on the data at hand. With our tools, advertisers can more accurately determine when to pull non-performing keywords and campaigns offline, how long to run A/B tests, and when changes in key metrics exceed normal fluctuations. I look forward to introducing these tools and the underlying methodologies at SES this month,” says Mr. Benson.
About Synapse SEM
Synapse SEM is a full service online marketing firm that leverages robust data analysis and statistics to provide its clients with deeper insights and uncover otherwise overlooked opportunities. With core competencies in paid search advertising, search engine optimization, social media marketing, mobile advertising and conversion optimization, the company develops, implements, and executes online marketing strategies focused on maximizing its clients’ ROI. Leveraging proprietary data analysis techniques and experienced subject matter experts, the agency is committed to achieving unparalleled results and providing the highest quality of service to its clients.
For more information on Synapse SEM, LLC, call 781-591-0752 or visit www.synapsesem.com.
Synapse SEM, LLC Joins Greater Boston Chamber of Commerce
Boston– Dec. 22, 2011– Synapse SEM, a full service online marketing firm, today announced its membership in the Greater Boston Chamber of Commerce. The Greater Boston Chamber of Commerce will help Synapse SEM reach its target industries while solidifying their brand in the Boston business community.
“The Greater Boston Chamber of Commerce will offer Synapse SEM superb value through numerous networking events and partnership opportunities” says Paul Benson, company co-founder. “We look forward to engaging with fellow Boston Chamber of Commerce members soon, and we are excited about the marketing potential this organization brings to our company.”
About Synapse SEM, LLC
Synapse SEM is a full service online marketing firm that leverages robust data analysis and statistics to provide its clients with deeper insights and uncover otherwise overlooked opportunities. With core competencies in paid search advertising, search engine optimization, social media marketing, mobile advertising and conversion optimization, the company develops, implements, and executes online marketing strategies focused on maximizing its clients’ ROI. Leveraging proprietary data analysis techniques and experienced subject matter experts, the agency is committed to achieving unparalleled results and providing the highest quality of service to its clients.
For more information on Synapse SEM, LLC, call 781-591-0752 or visit www.synapsesem.com.
Synapse SEM On-Boards Pharmatron, Inc.
Boston—November 21, 2011– Synapse SEM, a full service online marketing firm, today announced Pharmatron, Inc. as their newest client. Pharmatron, Inc. manufactures manual, semi-automatic, and automatic solid dosage form testing equipment for the pharmaceutical industry. Their testing equipment is used to determine the weight, thickness, width, diameter, and hardness (break force) of tablets.
Synapse SEM will provide search engine marketing services to the manufacturer starting before year end. “We feel strongly about search engine marketing’s ability to succeed in the manufacturing industry,” commented Synapse SEM Co-Founder Paul Benson. “We foresee paid search, specifically, becoming a critical channel to Pharmatron’s overall marketing strategy. There is a real opportunity to reach customers actively seeking Pharmatron’s products.”
About Synapse SEM, LLC
Synapse SEM is a full service online marketing firm that leverages robust data analysis and statistics to provide its clients with deeper insights and uncover otherwise overlooked opportunities. With core competencies in paid search advertising, search engine optimization, social media marketing, mobile advertising and conversion optimization, the company develops, implements, and executes online marketing strategies focused on maximizing its clients’ ROI. Leveraging proprietary data analysis techniques and experienced subject matter experts, the agency is committed to achieving unparalleled results and providing the highest quality of service to its clients.
For more information on Synapse SEM, LLC, call 860-880-0065 or visit www.synapsesem.com.
Synapse SEM On-Boards leading Career College in Connecticut
Glastonbury—September 1, 2011– Synapse SEM, a full service online marketing firm, today announced Stone Academy, a leading career college in the Connecticut market, as their newest client. Stone Academy specializes in offering accelerated LPN, Medical Assisting, Medical Office Administration, and Certified Nursing Assistant degree and certification programs.
Synapse SEM Co-Founder, Mark Casali, CPA, commented that “Stone Academy is an important client for us as it establishes a first step into targeting the higher education industry. We are confident that paid search can drive new qualified leads and reach previously untapped demographics for Stone Academy.”
Stone Academy has campuses in East Hartford, CT, West Haven, CT, and Waterbury, CT. For more information, please visit www.stone.edu.
About Synapse SEM, LLC
Synapse SEM is a full service online marketing firm that leverages robust data analysis and statistics to provide its clients with deeper insights and uncover otherwise overlooked opportunities. With core competencies in paid search advertising, search engine optimization, social media marketing, mobile advertising and conversion optimization, the company develops, implements, and executes online marketing strategies focused on maximizing its clients’ ROI. Leveraging proprietary data analysis techniques and experienced subject matter experts, the agency is committed to achieving unparalleled results and providing the highest quality of service to its clients.
For more information on Synapse SEM, LLC, call 860-880-0065 or visit www.synapsesem.com.
Synapse SEM Officially Launches
Synapse SEM to Provide Comprehensive Online Marketing Services
Boston, MA and Glastonbury, CT—May 06, 2011—Paul Benson and Mark Casali announced today the launch of Synapse SEM, LLC, a full-service online marketing firm focusing on the software, education, and professional services industries.
“Synapse SEM will be a data driven firm. We provide our customers actionable insights into their online marketing efforts,” says Paul Benson, company co-founder. Synapse SEM also considers often undervalued industry metrics. “We strive to take our clients to a new level of account performance by utilizing advanced strategies which include leveraging robust data analysis, assessing statistical significance to allow for empowered decision making, developing and achieving segmented ROI goals, and utilizing attribution analysis” commented Mark Casali, company co-founder.
Synapse SEM client, VisualIQ, affirmed that “With exceptional data analysis skills, coupled with a strong foundation in statistics and extraordinary knowledge of the SEM industry, Synapse SEM has proven to be the right partner for our company. Their insights, attention to detail and rapid response times have made them a pleasure to work with. I highly recommend Synapse SEM to any company interested in taking their online marketing efforts to the next level.”
Synapse SEM will provide best-in-class paid search advertising (PPC), search engine optimization, mobile advertising, social media, and general business consulting services.
About Synapse SEM
Synapse SEM is a full service online marketing firm that leverages robust data analysis and statistics to provide its clients with deeper insights and uncover otherwise overlooked opportunities. With core competencies in paid search advertising, search engine optimization, social media marketing, mobile advertising and conversion optimization, the company develops, implements, and executes online marketing strategies focused on maximizing its clients’ ROI. Leveraging proprietary data analysis techniques and experienced subject matter experts, the agency is committed to achieving unparalleled results and providing the highest quality of service to its clients.
For more information on Synapse SEM, LLC, call 781-591-0752 or visit www.synapsesem.com.
