16. Analyzing the Efficiency of the SEM Strategy

There are multiple ways to analyze the efficiency of SEM strategy, depending on which aspect you want to focus on. It is not possible to monitor a single metric, such as the number of website visits, in order to evaluate the efficiency of the strategy, as this will not represent the whole picture. You need to focus your attention on different aspects to learn how and to which extent your strategy has improved your business.

So, instead of knowing whether or not the number of visits has increased, you should focus on how this number affected your business, how many of those visitors were you able to convert into customers, do visitors return to your website, etc.

Analyze the visits

You should start by analyzing the visits. Rather than knowing the exact number of the website visits, you should focus on the details related to those visits, in order to assess their relevance, and their influence on your website.

For example, look at the following graph showing the most important statistics related to visits.

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Besides learning the number of visitors this month, you should also focus on other statistics displayed here as those affect your approach.

Page/Sessions

This is the average number of pages views during one session. According to this graph, one visitor views approximately three pages on the website before he or she leaves.

You should think about this for a while. Is this good for your website? Do you have enough time to convert the visitor during this time? You might also want to compare other data to this statistic, to get the reliable results.

Average session duration

Session duration is connected to the previous metric, as you need to question whether or not the time the visitor spends on your website is enough. The duration necessary to convert the visitor depends on your website and type of business you have, so this metric should be analyzed in comparison to your business. If approximately four minutes is enough for a visitor to make up his mind about becoming your customer, this will be a good average session duration. On the other hand, if you believe that you need to have visitors on your website longer, if you want them to read the full article, to participate in a forum, or to leave a comment, you will need to optimize your website in order to extend the length of a visit. Try engaging the visitors with some of the following:

  • Write interesting, catchy and useful articles that would inspire people to read them
  • Illustrate some points with images, graphs or charts
  • Provide related articles for those interested in learning more about a specific topic
  • Include links to other articles or pages on your website (for example, a product page)
  • Allow users to easily access the rest of the website by providing the link to your home page

Bounce rate

This metric represents the percentage of people who have only visited one page on your website and then they left. It means that the user did not find what he or she was looking for. They clicked on your website and they left immediately. Have in mind that high bounce rate can be an indicator to the search engines that something is wrong with your website because the visitors are leaving so soon. This will have a negative effect on the reputation of your website, so you should try to minimize the percentage of bounce rate.

While it is normal to have certain percentage of single-view visitors, bounce rate above 40% should be addressed to, as something must be causing high bounce rate. Some of the reasons that might be causing high bounce rate are the following:

  • Site design is not optimized
  • Incorrect implementation of the tracking code in analytics
  • The keyword leading to your website is not related to the website content
  • Landing page that is not user friendly (pop-ups, aggressive promotional text, etc.)

Analyze the click through rate

Click through rate represents the number of times the users have clicked on the link, and as such it is an important metric for analyzing and evaluating the success of online advertising. Once you divide the number of clicks by the total number of impressions, you will get the click through rate. This will help you track the number of clicks from search engine advertising, traffic generated from emails and social media.

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You basically need to analyze how many times your link has to be shown to the users in order for them to click on it. Have in mind that not everyone who sees the link will click on it, but what you need to do is to try to increase the number of those who do click. Thus, you need to aim towards increasing the click through rate, as this will have a positive effect on your business. Ultimately, click through rate is one of the major components affecting the quality score in Google AdWords.

If you notice that you have sent a newsletter to a thousand subscribers and only twenty of them clicked on the link in the email, there must be something wrong. The same goes with Google Ads. Low click through rate can be caused by some of the following issues:

  • Keywords are not related to the content
  • You are targeting wrong audience
  • Your email or text ad is of low quality and it looks spammy
  • Link is not user-friendly

Analyze the number of conversions

After you have been able to track and analyze the click through rate, you should focus on conversions. A conversion is completed every time a website visitor does an action you assigned as conversion. Most often, sale is considered to be a conversion, so each time a website visitor becomes your customer, you can say that you have achieved a conversion. Depending on your business, you can choose another action to be a conversion, such as sign up, participation in an online contest, etc.

In any case, you need to be able to track the number of conversions in order to analyze the efficiency of your online marketing. Compare the number of visits with the number of conversions, and you will be able to tell what your conversion rate is, i.e. how many visits you need to generate in order to achieve a certain number of conversions.

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If you happen to notice low conversion rate on your website, like with click through rate, you need to focus on solving this issue. Some problems that might be causing low conversion rate are the following:

  • Landing page does not provide enough information
  • Poorly designed landing page
  • You attract wrong audience
  • Website loads too slowly
  • Website is not mobile-friendly

Analyze the ROI

The final aspect of this analysis is the process of analyzing return on the investment (ROI). This means that you need to compare what you have invested in the online marketing campaign, with the results of the campaign. This way you evaluate your strategy and you will be able to assess whether the strategy was efficient.

Start by calculating the investment. List all of the aspects that were invested in the strategy, not only the actual budget used in advertising. Here are some aspects to consider:

  • Rent for the office
  • Salary for the employees (the person who conducts the strategy)
  • Fees for the contractors (to design images, write articles, etc.)
  • Fees for the tools you use
  • Internet and electricity costs
  • Transportation costs

These are all considered to be your investment, as all of this has to be invested to develop a search engine marketing strategy.

You are now ready to calculate the return. The main aspect of the return is the value of the conversions you have been able to achieve. However, besides the actual number of conversions and their value, you have to consider the following.

You were able to convert the visitor, and achieve one conversion in the value of $100, for example. You calculate this conversion into your analysis of return. However, the same customer may choose to buy again from you next month, and you will again earn $100. So, with one conversion, you have been able to earn $200 in this case, instead of $100 which is considered to be a value of one conversion.

The similar situation is with subscription-based websites, where users may extend their membership over the course of several months, which all results from one conversion.

This is something very important to have in mind when calculating return, as it significantly affects the amount of money you were able to generate through the SEM strategy, and thus it affects the final evaluation of the strategy.

Although it might be complex to calculate ROI, this report is important part of assessment of your goals, and the analysis of the efficiency of your SEM strategy. The report about the campaign’s outcome will also allow you to revise your search engine marketing strategy, by reducing the investment into this endeavor, if you do not see valuable results, or by increasing the budget if you consider your company could benefit even more from search engine marketing.