january 2012.

tapping white spaces in search engine marketing.

NetElixirTM SEM

Ideabook

www.netelixir.com

Dear Search Engine Marketer,

I have great pleasure in presenting to you our 2012 SEM Handbook – Tapping White Spaces in Search Engine Marketing. Over the past couple of years, at various retail marketing forum, I have heard marketers complain about the declining efficiency of search engine marketing (SEM) and how it has become difficult to run profitable SEM campaigns.

We beg to differ. SEM is by far the most effective online customer acquisition channel.

NetElixir manages search advertising programs exclusively for retail industry. Since 2005, we have helped over 200 retailers run profitable SEM campaigns. We agree that SEM has become hyper-competitive and CPC’s have nearly doubled for many categories over the last 24 months. However, we also know that smart search marketers can still successfully grow their online business through SEM. They just need to tap the white spaces.

This handbook introduces the concept of white spaces in SEM and offers concrete ideas to tap these.

Wishing you a happy, healthy and successful 2012!

UDAYAN BOSE Founder & CEO NetElixir,Inc.

message from our CEO

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white spaces in SEM - definition:

A place where the search engine marketer may have room to maneuver in a crowded playing field.

White space is an opportunity – external as well as internal. As search advertising has become increasingly competitive, it has become imperative for a marketer to seize these opportunities.

The marketers who have been able to identify and tap the white spaces have seen their SEM revenues and profits soar.

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ability to tap white spaces can propel SEM revenuesto an entirely different level.

Ability to tap white spaces can propel SEM revenuesAbility to tap white spaces can propel SEM revenues

to an en3rely different levelto an en3rely different level

Revenue growthRevenue growth

Due to campaignDue to campaign

Management efficiencyManagement efficiency

Revenue growth dueRevenue growth due

To an ability to iden3fyTo an ability to iden3fy

And tap white space.And tap white space.

Source: NetElixir Retail Intelligence Research. Actual SEM Revenue data for a leading gourmet food client whose SEM campaign

NetElixir started managing from January 2011.

Revenue growth due to an ability to identify and

tap white space.

Revenue growth due to campaign management

efficiency.

Source: NetElixir Retail Intelligence Research. Actual SEM Revenue data for a leading gourmet food client whose SEM campaign NetElixir started managing in January 2011.

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how to identify white spaces in SEM?

External Factor Analysis: - What are the key industry trends that have the potential to impact your SEM

program? - Who are the key players in your industry? Who is the leader and who are the

followers? - What factors (new entrants, new channels, etc.) can disrupt your customer

acquisition model?

Internal Factor Analysis (Identifying Internal Sign Posts): - How strong is your SEM plan? Is your plan as relevant today as it was when you

developed it? - How strong is your execution process? What are the critical drivers? - How are you measuring success and progress? How relevant are the metrics?

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3 places where NetElixir has been able to identify and tap SEM white space.

SEM Plan(strategy)

Execution

Measuring Performance

White Spaces in SEM

- 5 -

• How robust is your SEM plan?

• Using the GOSTA format to build your SEM plan.

SEM plan

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SEM plan

Are your SEM goals in line with overall marketing goals?

Do you have a concrete – shared plan of achieving your SEM goals?

What are the key strategic initiatives for your SEM program for 2012?

Who owns the strategic initiatives?

Is there a Plan-Do-Check-Act model in place to ensure your SEM program is progressing in the right direction?

how robust is your SEM plan?

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• The GOSTA (Goals/Objectives – Strategic Initiatives – Tactics – Analysis) model helps you connect your SEM goals to results in a planned way.

• The model can be (and should be) built collectively with various stakeholders within the Company.

• The model is progressive in nature and offers complete transparency and ac-countability for the total SEM program management.

using the GOSTA model to build your SEM plan.

SEM plan

SEM plan

the GOSTA model

• $10,000,000

revenue from new

online customers

• ROAS = 400%

• PPC Share of

Voice > 80%

Business Goals/

Objec3ves

Promote STAR

and ASPIRANT

categories

through PPC, CSE

and SMM

Out‐flank

compe3tors in

categories X,Y and Z

through strategic

promo3ons

5‐10% PPC SOV gain

for categories X,Y,Z

Strategic Ini3a3ves

• Category level

channel efficiency

analysis and budget

re‐alloca3on

• Use Compe3tor

Offering, Promo3on

and Messaging Grid

to iden3fy

opportunity gaps

• Track PPC SOV on a

monthly basis at

category level

Tac3cs

$X$X

$Y

$Z

Budget allocated 

& ROMI

10

The GOSTA ModelThe GOSTA Model SEM PlanSEM Plan

Business Goals/Objectives Strategic Initiatives Tactics Budget Allocated & ROMI

- 8 -

• the SEM program execution model.

• 3 “fresh ideas” to identify white spaces.

execution

- 9 -

- 10 -

execution

SEM program execution model: basicStrategic Initiatives

People

Idea Forum SEM Execution Processes

Technology

execution

Execu3onExecu3on

Execu3onExecu3on

SEM Program Execu3onSEM Program Execu3on

Model: AdvancedModel: Advanced

Execu3onExecu3on

Execu3onExecu3on

SEM Program Execu3onSEM Program Execu3on

Model: AdvancedModel: Advanced- 11 -

SEM Program Execution Model:Advanced

Testing

Observation

Knowledge

Experience

3 “fresh ideas” to identify white spaces.

execution

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Execu3onExecu3onUsing Real Time Tweets to Build Smart Using Real Time Tweets to Build Smart 

Search CampaignsSearch Campaigns

Extract Keywords from liveExtract Keywords from live

tweets using tweets using LXRRetailLXRRetail™™

Create ad groups with

these keywords

Analyze Performance and

Use Insights to drive results.

Real TimeReal Time

TweetsTweets

using real time tweets to build smart search campaigns.

execution

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- 14 -

Using the dual power of SEO+SEM to drive results

Idea Checklist Why is it Important Example

Create a list of keywords for

which you want to op9mize

search adver9sing (SEO+SEM)

ROAS (Total Search

Revenue/Total SEM Spend).

Track the ROAS for different

combina9ons of search lis9ng

posi9ons.

Improved SEM spend efficiency.

It is possible to gain an idea of

op9mal organic and PPC lis9ng

posi9ons.

12

SEM Spend

Optimal Listing Position for

Organic and Paid Ads

SEO/SEM Dashboard

using the dual power of SEO+SEM to drive results.

Using the dual power of SEO+SEM to drive results

Idea Checklist Why is it important Example

Create a list of keywords for

which you want to op3mize

search adver3sing (SEO+SEM)

ROAS (Total Search

Revenue/Total SEM Spend). Track

the ROAS for different

combina3ons of search lis3ng

posi3ons.

Improved SEM spend efficiency.

It is possible to gain an idea of

op3mal organic and PPC lis3ng

posi3ons.

17

SEM Spend

Op3mal Lis3ng posi3on for organic and paid ads

SEO/SEM Dashboard

Execu3onExecu3on

SEO/SEM dashboard.

execution

Execu3onExecu3on

Consumer Markets Compe9tors Occasion

Keyword Strategy

Ad Copy Strategy

Bidding Strategy

Landing Page

Strategy

External Business Factors

Use the Opportunity Matrix toUse the Opportunity Matrix to

iden3fy white spacesiden3fy white spacesuse the opportunity matrix to identify white spaces.

execution

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- 16 -

• the importance of building KPI’s that are relevant for your business.

• 3 powerful SEM KPI’s and why they are important.

measuring performance

measuring performance

KPI’s should be in line with your SEM goals and strategic initiatives.

KPI’s should offer you actionable insights.

Your business goals keep evolving. So should your KPI’s.

the importance of building KPI’s that are relevant for your business.

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measuring performance

3 powerful SEM KPI’s and why they are important.MeasuringMeasuring

PerformancePerformance

3 powerful SEM KPI3 powerful SEM KPI’’s and whys and why

they are important.they are important.

SEM KPI How is it calculated Why the KPI is

important

Comments

Profit Per Click

(Also called Value/Click)

(Revenue – Cost)/ Number

of Clicks

Helps you measure the

contribu3on from overall

account level down to

individual keyword level.

We recommend using this

KPI separately for brand

(trademark) and non‐brand

keywords.

New Customer Acquisi3on

Poten3al

Number of new customers

acquired through SEM/ All

customers acquired

through SEM

Helps in gauging the

efficacy of SEM as new

customer acquisi3on

channel.

We recommend using this

KPI for all the customer

acquisi3on channels. This

metric is useful in

comparing new customer

acquisi3on poten3al of

different channels.

New Customer Value Average First Time SEM

Order Value / New SEM

Customer

Helps in quan3fying the

true value of a new SEM

customer. This

marginalizes the impact of

various other factors (site

related and external) that

may influence subsequent

order composi3on.

This is a tough metric.

However, this metric

forces the search marketer

to think beyond the

obvious – to iden3fy white

spaces.

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key concepts: summary

• The Search Engine Marketing world has become hyper-competitive. However, it is still possible for a smart marketer to run exceptionally profitable SEM campaigns by identifying “white spaces”.

• We have presented questions that will help you identify white spaces for your SEM program.

• We have shared proven ideas at three levels – SEM Planning, Execution and Measuring Performance – for finding white spaces.

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NetElixir, Inc. is an online customer acquisition management firm headquartered in Princeton, NJ, with offices in London, UK; Hyderabad, India; Freiburg, Germany; and Copenhagen, Denmark. The company advises clients worldwide on achieving online marketing performance maximization using its proprietary technology, the LXR core platform, and employing a global service delivery model.

NetElixir’s suite of services includes paid search advertising management, search engine optimization, comparison shopping engine management, social media marketing management and search engine marketing analytics. Since 2005, NetElixir has helped more than 200 US online retailers run highly profitable search and shopping engine campaigns.

About NetElixir

Disclaimer

© 2012 NetElixir, Inc. All rights reserved.

This NetElixir report is intended for general information and is based on publicly available data available on the Internet at a particular point in time. NetElixir gives no guarantee regarding this information and accepts no liability for any inconvenience, or any direct or consequential loss, arising from reliance upon this information.

No part of this report may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying or otherwise without the permission of NetElixir, Inc.

NetElixir Global Offices

Global Headquarters 475 Wall StreetPrinceton, NJ 08540USAPhone: 609.356.5112

Europe Offices NetElixir LimitedCentral House1 Ballards LaneLondon, EnglandN3 1LQPhone: 020 8349 040

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Website: www.NetElixir.comPhone: 609.356.5112Email: info@netelixir.comBlog: http://netelixir.typepad.comTwitter: http://twitter.com/udayanboseTwitter: http://twitter.com/netelixir

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products & servicesOutsourced Service Solutions • Search Engine Marketing • Comparison Shopping Engine • Search Engine Optimization • Facebook Marketing

Technology Solutions • LXRRetail™: Integrated multi-channel campaign management platform for online retailers. • LXR100: Integrated multi-channel campaign management platform for interactive agencies. • LXRMarketplace™: Online Marketing Web Applications for Retailers.

Consulting Solutions • Web analytics consulting services. • Online Marketing Strategy consulting services.

For more information on the above solutions please email usat info@netelixir.com or call us at 609.356.5112.