When it comes to marketing expenses, conventional wisdom holds that half of all dollars are wasted -- but it's not possible to determine which half. The online marketing world challenges this adage. "With online marketing, you know what's a waste and what's not," says Bruce Clay, head of Internet marketing firm Bruce Clay Inc.
And that brings the CFO in the picture -- or should.
With the proper tools, every visitor to a website, as well as his or her actions, can be tracked, says Bradley Joe, marketing manager with the firm Webmarketing123. "You can tie website conversions (from visitors to customers) directly to dollars." That allows companies to determine, for instance, which search terms tend to attract more visitors that actually make purchases, as opposed to those who simply browse the site and leave empty-handed.
Of course, before a company can track visitors on its website, it first needs to get them there. That's where search engine optimization, or SEO, comes in. This term refers to the tactics a company can use to boost its rankings within the results produced by the major search engines, like Google and Yahoo. That's key, since few consumers bother searching beyond the first page of results. In fact, 60% of searches are contained to the top three search results, and 90% remain within the top 10, according to a 2011 study by Optify, a provider of marketing software.
"If you're not on the first page of Google, you really don't exist," says Jared Roy, search and social service director with WebTrends, a provider of digital marketing analysis tools.
Not surprisingly, achieving a top ranking within the search engines requires effort, Roy adds. "You need to have great content and provide reasons for consumers to come to your page," he says. That may mean incorporating whitepapers, promotions or videos of product demonstrations within your site. "You have to do the math, and ask what you're willing to pay for the cost of acquisition (of customers)."
CFOs, working with marketers, can choose from a variety of tools developed to calculate how effectively their online marketing initiatives are attracting visitors, and then converting those visitors to consumers. The systems range from those available for nothing, such as Google Analytics, to enterprise level solutions, Clay says.
The solutions can provide such information as the number of visitors to a website, and which marketing campaigns or search engines drove them there; the number of people that clicked on a search result, and the percentage of those that actually made a purchase. The more sophisticated systems can track consumers' initial and repeat visits, as well as purchases that occur even months after an initial visit to a site, Joe says.
They do this by placing what's known as a "cookie" on the computer that visits the site, Roy says. The cookie --- actually, a small file --- can track the visitor, during both his or her initial and subsequent visits, and see which pages he or she visited.
Some web analysis solutions are available for free; Google Analytics is one. A small- to medium-sized firm might spend five figures annually to get a more robust, customized solution, Clay says. For very large, multinational enterprises, the costs can go even higher.
Still, many companies of all sizes begin by working with free solutions, Joe says. In fact, Google Analytics is used by more than half of all websites, reports W3Techs, a supplier of information on the use of different web technologies.
The Search Terms that Work
Robert Fetterman, chief financial officer for the Oneida Indian Nation and its business enterprises, has been involved in analyzing the return on online marketing initiatives, with both Oneida and with his previous employer, a manufacturer of home and commercial safes, among other products. "We would partner with IT and marketing, and work together to determine what was working and what wasn't," he says.
For instance, in his previous position, Fetterman and his colleagues found that while they were getting visitors to their site who had searched on just the word "safe," few bought anything. More specific terms, such as "waterproof safe," tended to attract customers who were more likely to make a purchase. "It was a lot of trial and error in optimizing the page."
Such experimentation is critical, given that most searches are completed through what's known as "organic search." That is, while companies can pay to appear in the results when people search on specific key words --- type the words "paper towels" into Google, and Scott Brand appears at the top, in a lightly colored area --- potential customers are much more likely to click through to websites that are not part of the paid search. A 2011 study by UserCentric found that the percentage of users who looked at paid results ranged from 21% to 90%, depending on where on the page the results appeared. In contrast, 100% looked at the organic search results.
Optimizing a company's website so that it lands at the top of the search engine rankings is a critical long-term investment, Clay says. "If you don't make the investment, it's like being in a race and standing still."
And, finance can help with the analysis. "It's definitely something that CFOs should be aware of and work with their marketing teams on," says Fetterman.
This story, "Calculating Online Marketing's ROI: Why CFOs Must Get Involved in SEO" was originally published by cfoworld.com.