Telephony leader doubles return on ad spend

The leading developer and direct marketer of desktop telephony products since 1987 relies heavily on paid search advertising to drive traffic to its site. Since paid search is a high-performing channel for most online businesses, paid search often consumes a big portion of the online marketing budget. But without the right insights on click attribution metrics, the budget could be misallocated or cut with detrimental or unintended results.

The challenges
The turbulent economic environment has put intense pressure on the telecommunications solutions vendor to ensure that every marketing program delivers superior results. Consequently, its staff sought to increase the efficiency of its search programs with the goal of reducing spend without a proportional drop in revenue.

As in many organizations, marketers were gauging success using metrics from search engine vendors and inferences to the impact on top line revenues. Unfortunately, the staff did not have insight into vital after-the-click metrics, not the least of which was return on advertisement spend (ROAS). To get this information, they turned to IBM® Search Marketing, an innovative solution that provides a comprehensive view of key metrics from multiple sources, including:

• Click-through rates, keyword costs, and position from search engine vendors

• Website behavior, conversion, and visitor keyword searches over time from the IBM Coremetrics Digital Marketing Optimization Suite
• Product margins and other data from business intelligence systems
By consolidating enterprise-wide business analytics data in a single interface, IBM Search Marketing helps the company manage keyword inventories more effectively, make better purchase decisions, and, ultimately, increase ROAS.

The solution
When the economy softened, the company slashed paid search spending. Without solid performance data, however, there was no way to target the cuts. Analysis showed that the across-the-board cuts seriously impacted the business—eliminating revenue at a higher rate than cost.

IBM Search Marketing gave the staff clear visibility into which keywords were influencing and closing sales. An analysis of performance, for example, showed that 350 of the company’s 86,000 keywords were extraordinary performers. They also determined that a large number of terms were not meeting even bare minimum goals for ROAS. The staff began shifting spend away from the under-performing terms to the “superstars.”

Additionally, marketers found that while keywords for some of their high-end products drove major revenue, the cost of advertising was too high relative to the margins on these products. Moreover, by using a combination of first and last click attribution, they proved that several high-cost generic keywords that were previously considered essential were not, in fact, contributing significantly to acquiring or converting visitors. Again, the staff shifted spend to keywords that demonstrated better returns and margins.

The new strategy is delivering gratifying results. Despite another severe cut of 47 percent, search ROAS rose dramatically over the previous quarter, from 157 percent to 263 percent.

The results

The staff attributes the improved ROAS to the rich insight into performance that IBM Search Marketing provides, allowing more targeted spending. Marketers are just beginning to scratch the surface of data-driven optimization. Future plans include landing page optimization and keyword discovery, both of which are facilitated by IBM Search Marketing. By continuing to increase the efficiency of their search programs, the staff is positioning the company to increase revenues significantly when budgets start to increase.

Graphical views provide clear insight IBM Search Marketing is paying for itself in many ways. In particular, the ability to present data in a variety of graphical formats helps management immediately understand how paid search ties into other programs. For example, managers now have data that helps them identify customers who are good candidates to receive catalogs or targeted email. Managers can also easily compare the impact of various offers such as free shipping versus a discount.

Consolidation boosts productivity Marketers also report that they now spend much less time collecting and analyzing data about keywords because IBM Search Marketing consolidates data from Google, Yahoo!, and Bing. For example, creating the weekly revenue forecast and report is significantly faster because the staff no longer has to log into three different search engines, download reports, and rationalize data across disparate formats. In addition, bulk editing features enable the staff to make changes across multiple search engines in a single operation. As a result of these capabilities, marketers have more time to devote to analysis and refinement of programs.

For more information

To learn more about IBM Coremetrics please contact your IBM marketing representative or IBM Business Partner, or visit the following website: ibm.com/software/marketing-solutions