Search Marketing Is Direct Marketing

September/October 2007 Issue: Page 28

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What catalogs and direct mail can teach search marketers.

When I say the word "marketing," what do you think of? Probably some kind of advertising – maybe a TV commercial for Coke. That's brand marketing, and it's gotten the lion's share of attention from marketers for decades.

Far fewer people are direct marketers – the folks behind the catalogs and mail solicitations that fill our mailboxes. If you know any direct marketers, you may want to hire them to run your search marketing campaigns. Let's look at the basics of direct marketing to find out why.

The Name of the Game Is Response

Direct marketing is truly measurable marketing. Unlike most TV commercials, every direct marketing message is designed to evoke a response, such as "call this number now" or "mail your order form today." The return on direct marketing investment is based on how many customers respond to those messages. A very successful direct marketing campaign might sport a 4 percent response rate; a failure, less than one-half of 1 percent. Direct marketers make their money by increasing response rates.

Think about it. It doesn't cost any more to mail a catalog that drives 4 percent response as one that drives 2 percent. The creative costs, paper costs, printing costs and mailing costs are about the same for each mailing, so smart direct marketers focus on raising response to bring more return from the same investment. Direct marketers spend their time figuring out just what causes more people to respond. A different offer on the outside of the envelope might get more people to open it. A different picture and product description in a catalog might cause more people to order. A yellow sticky that says, "Before you pass on our offer, read this" might cause a few people to do just that.

But how do direct marketers know what worked? They measure the response. They measure changes in response to every small variant of their sales pitch. And they keep the changes that work and throw the rest away.

When credit card marketers send out a million pieces of mail to sign up new customers, they don't just write a letter and mail it out. Instead they write 10 or 20 different letters and mail them to 1,000 people each. Then they mail the version of the letter that generated the best response to the rest of that million-person list.

Direct marketers constantly tweak their messages to become more persuasive. They continuously experiment with new ideas. It may seem picayune to focus on raising response rates from 2.2 percent to 2.6 percent, but just such increases mark breakthrough direct marketing campaigns.

Another way to increase return is to cull your mailing list. If you know that certain customers never seem to buy, you can eliminate those addresses from the list and add new ones that might prove more profitable. Your mailing costs are the same, but your responses will go up.

You can see that the basics of direct marketing revolve around experimenting with your messages and your mailing list to drive more and more sales for the same cost. You can apply those basics to Web marketing, too.

Web marketing, done well, is the biggest direct marketing opportunity ever, because the Web is infinitely more measurable than off-line direct marketing. Off-line direct marketers can measure only the final response – the mail order or the phone call, for example. They can't tell the difference between those who threw the envelope away without opening it and those who read the entire message but still did not respond. If they could, they'd know whether to change the message on the outside of the envelope or change the letter itself.

The kind of measurement the Web offers is the stuff of direct marketers' dreams.

Direct Hit

Apply direct marketing principles to your search marketing to provide a big hit to your campaigns. Search marketers can measure every step of the buying experience:

• Searches: Which search keywords are you targeting? You can use keyword tools to determine how many searchers use them. If you want to increase response, you can add more search keywords to your campaign.
• Impressions: You can get reports from Google AdWords and every other search engine that shows how often your paid search ads are shown. For organic search, search rankings reports tell you where your pages appear, allowing you to deduce how many searchers see your listings. To improve response, you can raise your paid search bids or your organic search rankings.
• Clicks: How many people click on your paid search ad? How many referrals do you get from organic search? These measurements tell you how many people "open your envelope." To raise response rates, tweak your paid ad copy and your organic page titles and snippets.

Conversions

Does your Web metrics program tell you how many people responded? That response might be an online order at an e-commerce site, but it could also be a contact form submitted, a newsletter sign-up, a Web coupon presented at your retail store or any other action that you can measure and link back to your website. To increase response, analyze the Web conversion path of pages and activities from the moment the searchers hit your site to their final response, and improve each point where they abandon your site. Keep changing things until some of the experiments start to work.

While improved measurement is important, search marketing beats direct marketing in an even bigger way. Even the best direct mail campaign garners a small minority of responses, because most recipients are not interested in that product at that time – explaining why a great campaign might get only 4 percent response. But with search marketing, only those 4 percent even search for those keywords in the first place – you've already eliminated the other 96 percent of wasted money reaching the wrong people.

That's why search marketing costs less than fifty cents per qualified lead, while off-line direct marketing tactics require almost $10 to garner that same lead. But that's not all. You can use the direct marketing technique of culling your mailing list with search, too.

The search equivalent to the mailing list is your campaign's search keyword list. By carefully inspecting each keyword for its return on your investment, you can decide to drop keywords that fail to convert (or lower your investment in them). By focusing your paid search spending (and your organic search attention) on the best-performing keywords, you'll increase your return on search investment.

Experienced direct marketers can quickly pick up search marketing skills – many have already made the switch from the off-line world. If you're having trouble finding skilled personnel to run your campaigns, consider cross-training a veteran direct marketer who already has more background in response-based marketing than many search marketing professionals.

Mike Moran is an IBM Distinguished Engineer and Product Manager for IBM's OmniFind search product. Mike's books include Search Engine Marketing, Inc. and Do It Wrong Quickly. He can be reached through his website (mikemoran.com).

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