Your SEM Profit Mindset
Where are you now with SEM?
In a perfect world, you would approach SEM with complete clairvoyance as to what you need to do to make it successful. You would start with a very clear definition of all your possible conversions types, their marginal income, and a roadmap as to the campaigns and landing pages that will harvest that potential profit. This would lead to clear campaign designs and all that would be left would be to execute the plan and count the money as it rolled in.
Regrettably, this is how many books and articles on SEM tell you to approach it. As if someone just starting out on Google search could possibly know those things, or how to use them in Ads/Editor, or how to engineer them for success. Before even having created and managed a few search campaigns. We like to think we have some more realistic suggestions here.
However: In the real world, most organizations that try marketing on Google search kind of "jump in", get some campaigns and clicks, and then try to figure out how to turn their effort into something that generates a profit. And maybe that's where you find yourself today. It is quite understandable because there is a lot to learn about how your business can use search marketing and a lot to learn about the mechanics of Google Ads/Editor.
So, the question for you now is: What is the first step toward profitability in SEM?
What's your goal for SEM? Revenue, profit, customer value? Whatever? Do you have one? Does anyone know what they are? "We are going to make as much marginal income off conversions in September as we pay for the clicks." That's a profit goal. And a line in the sand. It may not seem like much, but it is.
And now you can start to think about everything you're doing in search marketing and how it will contribute to that goal or move you further from it. Maybe next month (October), your goal will be to make a 10% ROAS (return on ad spend). When it comes to profit, you really do need to set some expectations. Then, when you perform, you have a solid base with which to evaluate your effort.
It's very important that you progress from simply enduring your SEM "results" and start to see the entire effort as something you can control, manage, and ultimately be successful with.
Create a culture of SEM profitability
So let's see what we can do to improve your chances of success just by changing your approach. We don't mind that you might chuckle at some of the "tactics" mentioned here. But before you laugh too loud, TRY THEM. You might be surprised how much some changes in both your science and attitude can contribute to ending your days of spending money on clicks that don't generate income.
- Mindset. If you are losing money on SEM, it is because you tolerate it. Losing money, that is. Stop tolerating it. Stop funding it. Stop talking about it like it's OK. Stop talking to your agency or consultants like it's ok. Stop thinking it's an "investment", but you don't manage it like an investment. Get an attitude. A bad attitude. "Why are we paying so damned much money for clicks when we don't know what we're getting from them?" Start looking for answers. You will start to find some. Put up a counter (sort of like the one they have for our national debt) that shows how much money you're throwing away each day on clicks that don't convert. Make it cumulative.
- Methodology. If you are losing money on SEM, it is because you don't have clear roles and responsibilites laid out for your people and vendors. Who's in charge of campaign design? What does that mean? How do you go about creating, deploying, and measuring campaign performance? What is in your playbook? Who decides what you will accept as success or failure? Are you getting all the great ideas on the table and trying them out? Who's in charge of analyzing the SEM of your competitors? Are you looking at other industries that do things on SEM you should be plagiarizing? Do you have mystery shoppers trying out your campaigns, landing pages, and trying to order from your company? Or do you just assume everything is working correctly.
- Management. If you are losing money on SEM, it is because you aren't managing it like a business. You've had unprofitable business. You've had unproductive employees. You know how to correct those situations. Are you managing your SEM with the same process? Or is it running wild and you only look in on it occasionally? Essentially, management is the implementation of your attitude and methodology. It's a schedule of what should happen and a way of communicating with everyone about everything. Everyone has a job. Those jobs have to work together. And it's all on a schedule. Hint: THIS IS EVERY DAY.