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Calculating online marketing's ROI: Why CFOs must get involved in SEO

Karen M. Kroll | Jan. 20, 2012
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.

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.


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