eHealth Articles & White Papers

Understanding Online Metrics and Crafting an SEM Business Case

Ben Dillon - Vice President & eHealth Evangelist

One of the greatest benefits of search engine marketing (SEM) and other online advertising programs is the ability to track a number of different success metrics. Unfortunately, knowing which performance indicators to monitor, and what insights they're telling you, isn't always clear cut.

From click through rates to conversation rates, you'll have plenty of data to monitor. This article will help you make sense of the data, what it's measuring, and the importance of that measurement to your overarching goal. It will also help you understand the best metrics to use to build your case to management and secure more online advertising dollars.

Types of metrics

Most online measurement programs capture two types of metrics:

• Operational metrics, such as impressions and click-through rates (CTR), measure how many health consumers choose to engage (or not engage) with your online campaign.
• Conversion metrics provide the foundation you need to build a solid business case for online advertising.

Dissecting an SEM interaction

Let's start by understanding the range of performance indicators that come into play when tracking an SEM campaign. To do that, we look at the lifecycle of an SEM interaction:

Step 1: The consumer visits the page on which the ad is presented

• Metric used to measure effectiveness: Impressions ( the number of times the ad is presented)
• Impacting factors: Keyword selection (the page on which the ad is presented)

Step 2: The consumer clicks the ad and is taken to a landing page

• Metrics used to measure effectiveness: Number of clicks (the number of times that consumers click on your ads), and click-through rate (the number of clicks divided by the impressions)
• Impacting factors: Keyword selection (the page on which the ad is presented), and message or ad text ("the pitch")

Step 3: The consumer takes a desired conversion action

• Metrics used to measure effectiveness: Number of conversions (the number of people that complete a designated conversion action on your site), and conversion rate (the number of conversions divided by the number of clicks)
• Impacting factors: Keyword selection (the page on which the ad is presented); message or ad text ("the pitch"); and effectiveness of the landing page relative to the audience that you've attracted

Step 4: The conversion generates value to the organization

• Selection of target service offerings to promote based, in part, on conversion value

Conversions are the key metric for measuring the success of your SEM campaign. They are impacted by the effectiveness of your impressions and clicks. In order to maximize conversions, however, accurate targeting and messaging in your ads are more important than the sheer volume of your impressions and hits.

Establishing the case for SEM

Online health information inquiries begin in search engines. According to the Pew Internet and American Life Project, 80 percent of adult Internet users in America have searched for healthcare information in the past year. Of those health searchers, 66 percent began at a search engine. In other words, half of all American adult Internet users have used a search engine to look for health information!

Your ability to attract traffic through a search engine is critically important to the success of your online site. Organic search engine optimization is an important part of that equation (as we discussed last month). Organic SEO, however, gives you less control over attracting targeted consumers to your messages and fewer conversion opportunities than paid search opportunities.

SEM allows you to reach the right audience at the time in which they are interested. The effectiveness of your SEM campaign is highly dependent on your ability to target your messages to the appropriate segment. Fortunately, both SEM and pay-per-click campaigns offer you the ability to target audiences with the correct message.

Give them a place to convert

It is difficult to establish a true business case for SEM without incorporating conversion opportunities directly into the campaign. Too often we see SEM campaigns that result in site visitors calling in to make an appointment or learn more about a service. Even with the best intentions, calls don't end up getting tracked and true ROI cannot be established.

To stop this from happening, try delivering consumers to a microsite or landing page that includes a form to fill out. Providing forms, or even including a specific 800-number on your landing pages allows you to track the visitors from clicking on the ad to actual conversation. Measuring conversions allows you to evaluate the effectiveness of each ad placement based on its ability to deliver value.

Business case metrics

Now it's time to create the business case for your SEM campaign. We've introduced you to impressions, click through rates and conversion rates. But, how do you put it all together to create a business case? There are a number of business case metrics that will help you prove the value of your campaign.

Measure total number of conversions

Use the formula: Impressions x CTR x Conversion Rate = Number of Conversions.

A few key points:

• Maximizing the Number of Conversions is a matter of finding the ideal mix of the three factors rather than maximizing any single factor. A low CTR or Conversion Rate may be the result of poor ad copy or ineffective landing page, but they're equally likely to be the result of poor targeting leading to the poor quality Impressions.
• Impressions can be estimated from your keyword research.
• According to MarketingSherpa, CTR estimates are 3.84 percent for in-house managed campaigns and 5.40 percent for outsourced campaigns.
• Conversion rates vary greatly based on the service area being promoted and the types of conversion that are available. You should make an estimate based on experience. Allowing users to complete a conversion activity online typically provides twice the conversion rate that you will receive if you require the consumer to complete that activity by phone.

Measure the cost per converted lead

Use this formula: Number of Conversions/Total Campaign Cost = Cost Per Converted Lead

A few key points:

• Calculating Cost per Converted Lead requires accurate capturing of costs, which most organizations fail to do when executing these initiatives in-house. This is a key metric for the SEM business case and is analogous to customer acquisition cost metrics through traditional channels.
• If you are managing your campaign in-house, make a budget of resources to allocate to the campaign, including time from designated staff members.

Measure the total value

Use this formula: Value per Conversion x Number of Conversions = Total Value

A few key points:

• The effectiveness of the SEM campaign drives the Number of Conversions, but the Total Value is also a factor of the services that you've elected to promote. As in any marketing selection, you should ensure the services you are promoting are profitable, have the ability to respond to a greater volume of leads and have available capacity to grow (assuming service line growth is your goal). An actual value for each individual conversion is ideal, but is unrealistic for many environments. In those situations, an aggregate or average conversion value is used as a proxy.
• Value per conversion is a number that you should have from the service selection process. If that has not been part of the process, work with your finance staff to determine typical margins for the services and work with your clinical staff to determine what portion of consumer inquiries result in a patient receiving services.

Measure your return on investment

Use this formula: (Total Value - Total Campaign Cost)/ Total Campaign Cost = Return On Investment

A few key points:

• These factors should get you to a proposed ROI value. In the end, this is the factor that drives the choice to invest limited resources into these initiatives rather than into some other opportunity.
• Once you get to this point, you should have all of the numbers you need to generate ROI!

Take the information and run!

This provides a good general approach for constructing your business case for SEM. Take this as a starting point and make adjustments based on your unique organization, the services to be promoted and the goals of your campaign.