At our company’s informal book club, we recently had a nice discussion of David Hand’s The Improbability Principle: Why Coincidences, Miracles, and Rare Events Happen Every Day.
Belief in causation where there is only correlation, faulty assumptions about how “randomness” works and similar errors are shockingly common, even among the educated. Superstition can be a nightmare for the marketing practitioner, who can be praised or blamed for factors that fall outside of her control.
Better measurement helps, of course — but so does understanding how different channels work and interact with one another.
Rational people with years of digital marketing experience are supposed to know that paid and organic search are separate channels requiring separate budgets and different forms of optimization.
Sure, we understand that the buyer’s journey might involve research phases and multiple influences from different searches, exposures to display ads, email, the brand and more. In that sense, we should be aware that digital marketing programs are integrated.
Yet it often seems as though it’s not kosher to talk as if the paid results influence the organic results, since there really is a Chinese wall there (right?). It’s also unusual to attribute performance losses in one channel (paid or organic) to activities in the other.
The thinking is that “PPC results” should be analyzed unto themselves, and “organic traffic” should be looked at in its own right. Who could disagree? To believe otherwise would akin to planning your day based on the daily horoscope.
At least, that’s what we tell people. Have we been getting it wrong?
We’ve been working with Sadie, owner of a small but high-spending online consumer business, driving results for the past eight years. (Client name has been changed to the name of a neighbor’s cat.)
Entrepreneurs like Sadie generally don’t have dedicated staff to go over multiple KPIs from marketing channels in painstaking detail each week. They do want to know the basic bottom-line results. Unlike some more sophisticated large businesses, SMBs can be uncannily savvy in using certain simple KPIs as a basic survival mechanism.
Recently, I apprised Sadie of the fact that the PPC channel is thriving this year under our direction. Despite the maturity and competitiveness of her vertical, we’d managed a 40.7-percent increase in year-over-year PPC conversions in the four-month period leading up to October 31 (her busiest season). Not only that, we whittled the CPA down by 16.1 percent. Stunning!
“What are you talking about?” she retorted. “We’re down from last year, not up.”
Sadie does not have a metric like “CPA from PPC” in her vocabulary. All she cares about is “total revenues from digital minus total spend on digital.” Sadie speaks profit and loss.
Turns out, over the past couple of years, our wizardry on the organic side had made her a small fortune. We’d helped her business out of a few scrapes over the years — disavowing shady backlinks, building a real content strategy and more.
Inevitably, after a couple of years ranking #1 on some truly competitive terms, some of her plum organic rankings had fallen to page 2 of the SERPs. So when you added it all together, conversions were down slightly year over year (due to the decline in manna-from-heaven organic conversions).
What’s more, because of the heightened (and profitable) PPC activity this year, in recent months, her total PPC cost is actually up 18.1 percent. That’s why she’s always making those strangling noises about the high cost of her “Google bill.”
Now I get it!
And it’s fine. Knowing what we know now, we can work with it. Growth in the PPC channel, while good, needs to come at an even better ROI so those increased “Google charges” moderate a bit. It’s sheer optics.
And that’s exactly what we’ve done. In the past 30 days, CPA is down 26.4 percent year over year. Those pesky “Google charges” are still substantially higher than last year, ironically due to the success of the PPC channel, but they’re coming under control.
Why did I tell her all this in the first place? As a means of justifying a fee increase, of course. The fee increase went through. Sadie may have her quirks, but she isn’t crazy.
Search marketers have been slow to adopt integrated thinking around the paid and organic contributions to company bottom lines, in part because PPC grew up as an “anomaly” that was resisted for too many years by an SEO-dominant breed of marketers who felt that PPC lacked the “purity” of the “real” search results.
In newer channels like Facebook, the pattern was greatly accelerated. Facebook and others have been juggernauts in their own right, delighting users to be sure, but have been structured early on as Wall Street vehicles that won’t be messing around too long before ratcheting up the business end of things.
Indeed, Facebook ultimately threw everything it had at developing its advertising products. This led to a highly successful (in Wall Street’s eyes) curbing of organic reach. In a very short space of time, companies have shifted their attitude towards Facebook, now taking a blended view of paid and organic exposure.
Business owners are now starting to assume that their social-facing team or agency partner can develop hybrid skills to handle all aspects of Facebook. That’s how the business owner thinks; that’s how the service provider must think.
The same often goes for mission-critical channels like TripAdvisor and Yelp. The business owner is being reviewed on these channels. He or she is being cold-called by third-party “reputation experts” who shadily offer to “help” with their review profile (bad idea). They’re also receiving sales calls directly from the channel where all this organic content is being posted.
You know and I know there is no direct connection between these sites’ ranking/rating algorithms and whether or not you pay them — that’s been confirmed after exhaustive investigations by the FTC — but you’ll be hard-pressed to talk all those SMBs off that particular ledge. I doubt we’re ever going to put to bed business owners’ “superstitious” belief that their dealings with these companies are as parts of a larger whole.
In some sense, it can be useful that the business owner comes to the realization that to achieve greater levels of exposure, you have to work both channels effectively, and you pretty much have to pay.
The days of cherry-picking off organic reach alone are past. Google, Facebook and TripAdvisor (combined stock market valuation: $852 billion as of this writing) weren’t created as charitable contributions to the bottom lines of business owners. They’re advertising vehicles that happen to house organic content that is incredibly compelling for users.
Like her namesake, Sadie may go scurrying under the bed a little too often and sometimes hiss at the wrong target. But the two of them are wise enough to know that arms and legs are part of a larger whole, one that can either feed you or kill you.
Whatever the key source of traffic for any given SMB — Google, Facebook, TripAdvisor — all of them do indeed have a paid and organic component, and all of them are powerful enough indeed to either feed your business or crush it.
As is so often the case, the entrepreneur knows something that those without “skin in the game” don’t. Sadie didn’t care that we’d rocked her world specifically in the PPC channel this year. She does care about digital media profitability — whether the whole effort put together is paying off.
We should lean in and listen a little more to these entrepreneurs. When we do — no matter which of the formal channels we’re responsible for driving — we’re going to become just a little more engaged with how traffic sources work for them as a whole. We’ll also become more aware of about how well we’re allocating the effort across all channels; and maybe see a little more urgency to ensuring that there are no serious gaps in marketing execution, regardless of the specialization required.
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