How much value do companies really gain from Google advertising? Is it providing the value for money that is expected in terms of sales, or is it impossible to tell because the management team has no way of measuring campaign effectiveness?
Google can offer a great ‘ad to lead to sale’ tracking process. It is online, it is visible and provides a clear ROI. With the added ability to track calls using custom phone numbers on the advert, it is very useful for brands operating purely online and selling to a consumer marketplace.
But for B2B organisations with complex, drawn-out sales models that demand repeated interaction with prospects via email, phone and face-to-face, Google clearly cannot provide the answer. Organisations need to be measuring the results of advertising spend in relation to actual sales closed and orders placed, not click rates or cost per click.
The only way to determine an accurate ROI is to track the leads throughout the sales process. By using an effective CRM system, a business can follow the progress of the unqualified leads that arrive at the web site:
- The first stage is typically Marketing Qualified Leads (MQLs) - those that meet the basic qualification criteria, such as geographic region or size of company.
- The second stage is usually Sales Accepted Leads (SALs) or Sales Qualified Leads (SQLs), those leads that meet most of the normal BANT qualification rules - Budget, Authority, Need and Timescale.
Most businesses will then convert the lead into an opportunity for the sales team when all four criteria are met. Finally, and most decisively, when the opportunity is marked ‘closed/won’, the finance team gets to generate an invoice – the ultimate proof of lead value!
The shocking fact is that many B2B organisations that have measured the value of the Google Adwords leads have discovered little value. In 2011 a survey conducted online by YouGov revealed that less than a fifth (18 per cent) of SMEs using Google Adwords were recouping the cost of their investment. The remaining 82% were either not recouping costs or simply did not know.
One company found that every £1 it was spending on Google Adwords generated a mere 18 pence in sales; while just 10% of survey respondents said that Google Adwords had led directly to sales and new clients in the last 12 months.
Three years on and advertising with Google has become more expensive due to the increasing competition. For any organisation operating in a popular sector – such as CRM – the costs are prohibitive. Yet despite the near ubiquitous use of Google Adwords there is little sign that organisations are measuring any more today than they were in 2011.
Google Adwords is one of the world’s leading advertising methods and it is a real shame that many firms are still struggling to quantify the benefits. Getting lead generation right is a fundamental component of the marketing activity. But lead generation is not sales. And unless Google Adwords are generating any sales, whether the ads are optimised or not is totally irrelevant.
Given the limited marketing budgets available to smaller firms, it is essential to maximise the return of every single investment. Isn’t it time to find out just how much value the Google Adwords investment is delivering - or whether that investment could be better placed elsewhere?
By John Cheney, CEO, Workbooks