The Challenge of Estimating Paid Search Volume

There’s a good thread at Search Engine Watch Forums that’s been going for a month now about estimating search traffic, specifically paid search traffic. So far, the consensus is that it’s really difficult – some would say even impossible – to do this accurately.

I’ve been struggling with this issue ever since we started in paid search over 5 years ago. Early on, it wasn’t a big deal. I could just say “well, it’s a new program with no history, so we really don’t know what’s going to happen” and that was good enough. Besides, the programs were small enough that they didn’t hit the management radar screen too hard.

Now, however, paid search makes up about 50% of our total acquisition volume. It’s definitely on the radar screen. And I’ve got a problem – albeit a good problem. Our fiscal year began July 1. Google volume has exceeded my forecasts by over 50% for the first 2 months of the fiscal year. And management wants to know why, and whether this will continue.

I know, I know – many of you would just say “take the money and run!” and not worry another second about it. But, realistically, forecasting is important – it affects how we run our business. Company priorities, income, expenses, cash flow – they all depend on reasonably accurate forecasts.

And therein lies the dilemma: How does one estimate search traffic with any amount of accuracy?

Do you look at your own history? We’ve been a Google advertiser for over 5 years, yet clearly history isn’t an accurate predictor. I started with last year’s results when I forecast this year, and it’s not even close.

Do you use traffic estimation tools? Well, such tools might give a more accurate picture of the current search landscape – and then again, as pointed out in the SEW thread, they might be really, really inaccurate. Furthermore, how do you use these tools to forecast impressions, clicks, and conversions on 8,000 keywords? We use Google, Yaho9o, MSN, and Ask. 8,000 keywords on 4 engines is 32,000 different estimates. Unless you have an API with one of the tools, there’s no way to go through and manually estimate traffic at this level of volume.

I’ve toyed with the idea of forecasting by gut feel – you know, look at current trends, close my eyes, and pick a number. I’ve stayed away from this before, because of course management wants to know how I arrived at my forecast numbers. But now that I’m being asked why we’re up so much, maybe it’s time to see how much of a PPC guru I really am!

How do you forecast paid search?

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6 Reasons Why In-House Search Engine Marketing Is Super-Effective

SEMPO has an article in their Learning Center called 6 Reasons Why In-House Search Engine Marketing (SEM) is Ineffective. Gugo at the Search Engine Watch forums posted a rebuttal this morning, and I added my own, which I’d like to share here.

The SEMPO article is an editorial, so take it for what it’s worth. Still, I just couldn’t let it go by without responding. It’s a nice try on the part of the author, but sorry, it’s off the mark.

Here are 6 reasons why outsourced SEM can be ineffective:

1. SEM and SEO Campaigns are time intensive. When your SEM agency is managing multiple clients, time spent on your account can suffer, causing irreparable damage to your campaign. An in-house SEM’s sole job, day in and day out, is to monitor your company’s SEM efforts, keeping a constant eye on performance.

2. SEM requires dedication. That’s why you should hire someone whose sole job is SEM for your firm. Their dedication is what they’re getting paid for, plain and simple.

3. SEM is very competitive and the market drives costs up. Why risk your hard-earned dollars on an agency that doesn’t know diddly about your business? An in-house SEM understands your business economics and how they fit with SEM strategy and tactics, allowing you to compete smart.

4. Successful SEM campaigns demand accurate tracking and analysis of effectiveness. An in-house SEM understands your internal business tracking methods and metrics, and how they fit with the organization’s overall marketing mix. Rather than relying on out-of-the-box analytics solutions, your in-house SEM can look at internal measurements to gauge the effectiveness of your campaigns vis-a-vis your other marketing efforts. Furthermore, as an expert not only in SEM but in your specific vertical, your in-house SEM understands the nuances of marketing in your space and can interpret the metrics accordingly – rather than just looking at figures on a page from a canned analytics solution.

5. SEM agency reps often are unaware of search engine policies. Especially if you’re speaking to a junior rep who just hired in last week.

6. SEM agencies often do not have support. Having support at the search engines is great, and usually agencies do fine with this. But does your agency have support within your organization? Do they know which guy in IT to go to when your landing page URL suddenly breaks? Do they know which marketing director to approach when they need additional budget for a PPC test? Do they regularly sit down with your CEO to talk about overall organizational goals and strategies?

Don’t get me wrong – SEM agencies exist for a reason. Many small to medium size businesses cannot afford to hire a full-time in-house SEM, and for these folks, a good agency is a godsend. But don’t diss in-house SEMs. I’ve been doing this a lot longer than many agency folks, and I find I often know just as much if not more about SEM than they do. We’re all in this together, you know!

I wonder what SEMPO’s In-House committee thinks of this article??

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