Using Share of Search as a budget setting KPI

For marketers, the budget setting is often unnecessarily complicated. This comes as a result of having no consensus regarding the key metrics that should be used and how they correlate to business results.

Marketers, performance analysts, operators, and business professionals alike deal with a myriad of ambiguous performance metrics on a daily basis. Such metrics are often so nuanced and widespread that the big picture gets lost in translation. To this, we argue there is one stellar metric that’s easy to understand and backed up by hard data: Share of Search.

Share of Search is simplistic and effective. Analyzing the metric is black and white – if it increases, you are operating effectively; if it decreases, it’s probably time to take a deeper look at your marketing and branding strategies.

Considering how easy it is to understand and apply, Share of Search is quickly becoming the brand-building metric to trump all others.

Current market research suggests that Share of Search correlates with the direction of market shares and sales an average of 83% of the time. This means that underperformance in this key search data metric not only suggests a marketing inefficiency but a business-critical problem – one that should be urgently dealt with before it affects the entire business.

To translate a Share of Search analysis into an actionable marketing strategy within an organization, three metrics are required:

·      Share of Search

·      Search Volume

·      Search Trends

Green Light – Metrics show Effective Marketing

Effective marketing is showcased by clear positive trends within each of the above-mentioned metrics. The positive metrics serve as a sign that the current marketing plan is working well in current market conditions.

In such a case, it’s a good idea to not only continue with whichever strategy is working, but to add more fuel to the fire and increase ad spend. This will increase Share of Search growth and further boost market share.

Yellow Light – Metrics show Further Analysis is Required

When Share of Search, Search Volume, and Search Trends are flat or volatile, marketers should consider a ‘wait and see period.

The metrics bouncing up and down or following a flat trendline don’t necessarily signify that something is wrong. They may signify certain issues within the marketing strategy need improvement, but that doesn’t mean the strategy as a whole should be considered ineffective.

In this stage, it’s necessary for marketers to assess the peaks and valleys of metric trends so as to gain an understanding of what the underlying causes may be.

These metrics may expose opportunities where it’s possible to differentiate yourself from your competitors. From here, it will be possible to craft a budget that allows for a fast-failing trial run of iterative marketing strategies to see what takes and doesn’t.

Red Light – Metrics show Stop and Evaluate the Marketing Strategy

When all three metrics have a clear negative trend for a sizable time period (e.g., 6 months), there is likely a problem at hand.

At this point, it’s necessary to spend a generous amount of time with board-level buy-in and analyze what is halting the Share of Search growth. To gain a thorough understanding of the issue, it’s essential to determine whether it’s caused by an internal or external factor. If your competitors show positive growth in the same metrics over the same time period, then it’s an internal problem. On the other hand, the issue may have spread from a broader-scale, industry-wide problem.

It should be noted that the Share of Search metric has been correlated with the Share of Voice metric (media spend). A deeper analysis of the two might explain a negative trend occurring as a result of more investment in growth and media than brand or product.

A Share of Search Recap

A thorough analysis of all KPI’s within a marketing strategy can sometimes give unclear data on whether or not the strategy is working effectively. As Share of Search gives a simplistic outlook on equally complex unknowns, it should be used as the chief metric.

Companies that use Share of Search as their headlining KPI will gain a clear understanding of the state of their marketing strategies. Furthermore, the metric gives companies the data necessary to evaluate what the problem is and where they might find the solution.