Count Your Money


Earlier in this chapter, we spent a lot of time analyzing the behavior model for visitors to your Web site and determining the business value of what they do. You can use that analysis to make the case for investing in search engine marketing. If you are running a political campaign, this section does not apply to you because you cannot justify your spending based on higher revenue. For everyone else, however, this is the section that will get your search marketing campaign funded. Businesses invest money because they can count the revenue that comes in after that investment.

The simplest business case for search engine marketing for any business is this: If they can't find it, they can't buy it. But that will not convince too many green-eyeshade types like your Chief Financial Officer. And, like anything else, a search marketing program requires investment.

So, how do you convince accountants to open the checkbook? Start with the Web Conversion Cycle. Go back to the model you developed earlier in this chapterthe one that best fits your business. No matter what the model, you have chosen what to count as your Web conversions. Maybe yours are simple, because you sell direct on the Web and you just need to count Web orders. Or maybe they are more complicated to track, such as leads or offline sales. But no matter what your conversions are, you can use the formulas presented earlier to place a dollar value on each Web conversion. Check out Table 6-8 for a summary.

Table 6-8. Calculating the Value of Web Conversions (You can calculate the average worth of each Web conversion for any Web site goal.)

Web Site Goal

Formula

Web sales

Total sales ÷ Total orders

Offline sales

Total sales from Web ÷ Total Web conversions

Leads

Total sales from Web ÷ Total leads


Table 6-8 can be simplified even further, because the formula listed for offline sales actually works for any goal. No matter what your goal, if you can count the total sales that came from the Web and you can divide that dollar figure by the total number of Web conversions, you will find the value of each conversion.

Although that is interesting, and useful for showing the value of your Web site, it does not yet justify spending money on search marketing. To make that case, we need to take the model one step further. We need to identify the value of each visitor to the site.

The formula for the value of each visitor is also simple: Divide the total sales from the Web by the total number of visitors. Table 6-7 provides an example of this calculation, where 100,000 visitors come to the site and each visitor was worth about $20. This calculation is the basis of your search engine marketing business case, because the purpose of search engine marketing is to increase the number of visitors to your site. Table 6-9 shows a simple example of how the calculation could work for the site modeled in Table 6-7the 10 percent rise in traffic yields 10,000 new visitors worth $20 each for a $200,000 increase in revenue, for example.

Table 6-9. Calculating the Value of Increased Traffic (You can calculate the sales impact of additional traffic to your site.)

If Traffic Increases By

Revenue Increases By

5%

$100,000

10%

$200,000

15%

$300,000


If the flinty-eyed accounting types at your business do not need any more than what is shown in Table 6-9, consider yourself lucky and go get the money to start your search marketing campaign. Most businesses, however, need more than this. They need to know exactly how much you are projecting to increase site traffic, and they want to know what it will cost. These are reasonable questions, but we are not yet able to answer them. We will save them for Chapter 7, "Measure Your Search Marketing Success."



    Search Engine Marketing, Inc. Driving Search Traffic to Your Company's Web Site
    Search Engine Marketing, Inc.: Driving Search Traffic to Your Companys Web Site (2nd Edition)
    ISBN: 0136068685
    EAN: 2147483647
    Year: 2005
    Pages: 138

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