Apr 162008

Where is YOUR data? In SEM the answer matters.

Some concepts are so fundamental, you assume everyone gets them right. Never assume anything when it comes to online advertising.

Bidding and the analysis that goes into fine tuning a flexible bidding system are critically important to a PPC program and are often neglected. Folks tend to spend too much time flipping copy, and not enough time studying the numbers. There is much more money to be made with the latter than with the former. I used to think the issue was simply not knowing what to with the numbers, but now I realize that some systems don't really give folks access to the raw numbers needed for meaningful analysis.

In any analysis, step 1 is "Gather the raw data". What happens if that data is hard to access, takes time and requires lots of manual manipulation to bring together in a useful format? The answer is obvious: not much analysis is going to take place.

Yet a number of professional SEM firms are in exactly this boat. Many SEM systems don't use the atomic (ad level) cost and click data from the engines. They use estimates, and periodically do data pulls from the engines for reports back to the client.

This came as a total shock to me. How could it be that big companies -- much much larger than us, who've been in this game longer than us -- not get this right?

If the sales data is on one server and the cost and click data is on another server doing the analyses that are critical to success becomes impossible. Pulling the data together should take moments, but will take hours if numbers have to come from different servers.

An important technical question to ask any prospective SEM agency is: Do you have an API connection with each engine, and if so, do you store the daily ad level costs on your server? If their answer is "no" and you're looking for first class results, you'll need to look elsewhere.


4 Responses to "Where is YOUR data? In SEM the answer matters."
Stephen says:
George, It is astonishing how little analysis is done by some large companies and agencies. One would think that they would have the money and resources to implement the most advanced tools and best practices. This is yet another indicator of the infancy of our industry segment. The next 10 years are going to exciting!
Thanks for your comment, Stephen, we certainly hope that expectations of agencies rise. The rising tide will sink those big ships that are anchored to the bottom. That will be a benefit to their clients and to the responsible firms that come to their clients' rescue.
Stephen says:
Cheers! I am in complete agreement with you. The anchor metaphor is spot on. :-)
Adam says:
Great article, good advice. Here are a few other questions, in no particular order, that you should ask if you are looking for first-class results: 1. Do you have your own proprietary technology or are you using third-party solutions; 2. Do you have the ability to track phone orders; 3. If your website is designed to generate leads, do you have the ability to see how much revenue and profit each lead generates, or can you only judge the number of leads per ad and cost per lead? Ideally, you want a solution that will integrate with your back office so that as you move the lead to a sale you can tie the revenue back to the ads that were responsible; and 4. Do you give credit to conversions to the very last ad that was clicked or do you have the ability to see the team of ads that were clicked in gaining the conversion, so that you can allocate the revenue and profit credit across all of the ads that were involved? This is known in the industry as Purchase Path or Attribution Management.

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