How to Communicate the Value of Paid Search to Stakeholders

In a world of shrinking attention spans and growing competition, it's harder than ever to get noticed. Capturing market interest is a major challenge for any business, especially in the arena of online search. In this environment, paid search is a powerful alternative to organic marketing campaigns. When pay-per-click (PPC) ads are combined with keyword research and content optimization, you can reach out and engage people where their attention lies — at the top of relevant search pages.

Regardless of location or industry sector, decision-makers often struggle to realize the full potential of paid search. While these campaigns can significantly improve your visibility and boost your conversions, stakeholders are often unsure about making the initial investment.

If you've ever tried to demonstrate the power of paid search and struggled with corporate buy-in, you're certainly not alone.

Understanding Stakeholder Concerns

Whether you're a marketing manager, a chief marketing officer (CMO), or a company director, it's important to understand and address stakeholder concerns. Senior management have their hands on the purse strings, and they need convincing to spend this money wisely. This is especially true for digital marketing, where promises are often overblown and effective solutions not always obvious. In this challenging environment, there's a real need for clear data and quantifiable evidence.

Key Metrics to Demonstrate Value

When you type something into Google, you see both organic and paid results at the top of the page. When you look closely, however, organic results are largely held by non-commercial organizations and large multinational companies. The landscape can be very different for paid results, which can be held effectively by small and medium-sized enterprises. With smart keyword usage and industry expertise, almost any business can achieve amazing search engine results. 

Return on Investment (ROI)

Stakeholders care most about one thing: return on investment (ROI). In simple terms, this key business metric measures gains against costs. For an accurate ROI calculation, you simply divide the profit earned on an investment by the cost of making that investment. While paid search campaigns can be more expensive than organic search, they can have a more immediate impact. It's much easier to achieve solid rankings with paid search, with gains often dwarfing costs for a healthy ROI. 

Conversion Rate

Conversion rates play an important role in the world of online marketing. They're used to evaluate the performance of website traffic by measuring the ratio between visitors and their actions. Conversion rate reporting is normally about sales, but it can also measure subscriptions, downloads, or other desired actions. Paid search enjoys a high conversion rate, with the relatively low cost of online ads balanced against the targeted nature of each campaign. You’re only charged when someone clicks on your ads, leading to tighter sales funnels and better results. 

Cost Per Acquisition (CPA)

CPA is a marketing metric that measures the total cost of gaining a customer. When a customer completes a specific action, their path is analyzed to determine its real cost. From initial contact to final conversion, CPA indicates how much each sale is really worth. For paid search, this involves a pretty simple formula: just divide your total ad spend by the number of new customers. CPA is generally pretty low with paid search, and you can tweak ads to make it even lower over time.

Customer Lifetime Value (CLV)

The very useful CLV metric is like CPA on a larger scale, but inverted. Instead of measuring the cost of each sale, you're measuring the value of each relationship. CLV is an important metric for any business that wants to stick around for the long haul. It allows you to spend wisely during the initial stages of a relationship in order to reap rewards down the line. With paid search, CLV helps to align advertising content with market segments. You can spend more when the CLV is high, with an eye to growing lifetime profitability.

Impression Share (IS)

Another valuable metric, Impression Share (IS) is the percentage of impressions your ads receive compared to competitors. It's calculated by taking your impressions and dividing them by the total number of impressions you were eligible to receive. Potential or eligible impressions are estimated using many factors, from targets to approvals and quality. With paid search, you can track your IS at many levels, from the search campaign itself to groups and keywords. Understanding IS allows you to measure and improve market visibility.

Click-Through Rate (CTR)

In the world of online marketing, CTR describes the number of clicks you receive per number of impressions. Your CTR affects your ad cost and Quality Score, which is a diagnostic tool comparing ads at the keyword level. The CTR of each ad can be measured to track its performance. This is a major benefit of digital marketing compared to traditional broadcasting. Effectively, you only have to pay for people who are interested in your products and services. What's more, you can refine your ads over time to improve your CTR and lower your CPA.

The Importance of Clear and Concise Reporting

To justify a potential paid search spend, all data collected must be put into context. The best way to show stakeholders the value of paid search is to generate clear and concise reports. Depending on the technical proficiency of decision-makers, there are many ways to present paid search metrics. Effective reports normally combine multiple metrics, turning them into graphs, charts, and tables. Summarizing and contextualizing data makes it easier for decision-makers to buy into paid search campaigns.

Reporting tools from Google

Google's Paid & Organic report is a predefined report viewable from your Google Ads account. It presents clear information on your website's performance, linking user numbers with specific search terms. Measuring organic results improves decision-making with paid search, helping you to identify potentially valuable keywords and gain a holistic view of your online presence.

The Paid & Organic report provides a great overview of your performance. If you want to dig deeper, the following detailed reports are also available through Google Analytics:

• The Interest Segments report groups users who have purchased on your website.
• The Site Search report shows how users are searching based on custom keyword data.
• The Referrals report highlights websites that send you traffic, and whether these users converted.
• The Top Conversions Path report analyzes top-of-funnel (TOF) or brand awareness campaigns.
• The Geolocation report measures performance in terms of geographic location.

When generating reports for stakeholders, it's vital to choose the right data and use the right tone. While each business and campaign are unique, focusing on these best practices is normally a good idea:

• Know your key performance indicators (KPIs).
• Focus on the lowest common denominator — revenue.
• Utilize multichannel data to find relevant trends.
• Use the power of visual language to tell stories.
• Prioritize recent data and make accurate forecasts.
• Speak to your audience using terms they understand.

The Power of Visual Aids and Dashboards

Great reports don't just list data — they also highlight underlying patterns and trends through images. Whether you're using Google Analytics or third-party tools, adopting a strong visual language is vital. Along with underlining key metrics, images help people to visualize relationships across time frames and data sets.

There are many ways to create effective visual presentations using the metrics listed above. For example, you can compare conversion rates for various ads using charts, highlight CPA trends to show costs falling over time, or analyze CTR and CLV metrics to highlight the power of paid search funnels. Dashboards display multiple visuals in one place, allowing you to establish relationships between data. 

Contextualizing Data Is Paramount

Numbers and charts only tell half the story — words are also needed to put information into context. Whether you're delivering a report or making a presentation, all metrics used need to be scrutinized and elaborated. For example, you may wish to compare current performance with past data, or contrast business shortfalls with accepted industry benchmarks. When you provide a narrative around data, you're helping people to make sense of the information presented.

Expertise and Communication: The Power of Influence

At Marcel Digital, we specialize in all aspects of paid search. With strategic expertise and industry experience, we know how to shape minds and influence the decision-making process. We can help you to address stakeholders with language they understand, using key industry metrics to highlight the transformative potential of paid search campaigns.

We have access to a vast collection of tools and resources, which we provide to clients for their ongoing reporting needs. If you're looking for a long-term relationship based on communication, transparency, and mutual respect, we are here to help. We believe in the power of paid search, and we know what it takes to get everyone on the same page.