Cut through “Agency Speak.” Conversions, leads, or visitors … what are you really getting?
Whenever we take on a new client, we ask them to share information about their current search engine marketing (SEM) efforts. One thing that seems to stand out: regardless of how a campaign is really doing, traditional SEM agencies have their own way of “spinning” the numbers.
For example: One of our clients was spending $35,000 per month on Google alone. Their agency was taking another 15% ($5,250). When we told them that their conversion rate was low, they reminded us that the last update from their agency reported very high “click-throughs” and a 10% increase in the number of visitors. Here’s a quick refresher on terms that agencies will use:
- CTR (click-through or click-through rate) – if your ad shows up 100 times on Google, and 1 person clicks, that’s a 1-percent CTR.
- CPC (cost per click) – every time someone clicks one of your ads, it costs you money (that’s your cost per click). Some keywords are much more popular than others, so you have to pay more for those clicks/keywords.
- Visitor – if someone, anyone, comes to your site, they are a visitor – not a lead, not a conversion, not a prospect … simply a visitor.
- Conversion – there are two main kinds of conversions in the industry: 1. someone who clicks your ad AND takes the desired action on your site (like requesting contact or downloading a white paper); 2. any visitor to your site who takes the desired action. Thus, there are ad conversions and site conversions.
- Cost per conversion – When ClearLead talks about cost per conversion, we mean “total money spent divided by number of conversions.”
Taking all of the above into consideration, what did our client’s $40,250 ($35,000 + $5,250) really get them? They got 300 people to fill out their request for contact – in other words, 300 leads. Their agency told them that their cost per conversion was $117. The agency convinced our client that the increased CTR’s and increased number of visitors was an indication that they were moving in the right direction, and that they should maintain their budget while the agency worked on getting more conversions.
What’s the problem with this scenario? First of all, after you factor in the agency’s $5,250 management fee (which they avoided mentioning in their report), the true cost per conversion was $134. Secondly, though it sounds good, higher click-throughs and more visitors are not valid indicators of campaign success. You could have 1 million visitors, but if they don’t follow through on your call to action (in other words, if they don’t “convert”), then the numbers don’t mean anything – except that you spent a lot of money on getting visitors. (Granted, if you’re YouTube, MySpace, or AOL, and you’re going after Bank of America or Toyota for advertising dollars, then the number of visitors is important – but that’s a different animal altogether and not a relevant business model for most of our clients.)
Finally, what if the agency doesn’t get more conversions for your money? You’re still going to pay them their management fees (as our client did). They might even suggest that you spend more money next month, so they can “cast a wider net.”
The moral of the story: Be very specific about the language you use for determining the success of your programs. If you’re not getting precise results that are easy to understand, then you might be a victim of “Agency Speak.” Use our ROI Calculator to find out what you’re really spending on your SEM. If you need help or answers to your questions, please fill out our free SEM analysis request or give us a call at 866.976.4669.
To find out if your company qualifies for the ClearLead customer acquisition solution, request a FREE consultation or call us at 866.976.4669.
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