There’s no shortage of brands lacking a defined search marketing strategy. It’s common for a marketing manager to be handed a budget for this “new-fangled” search marketing thing, without any clearly defined ROI goals. And, when in doubt, most people say, “Show me the traffic!”

Here’s why traffic is a bad success metric for PPC:

1. Ad Costs Increase Annually

If you’re in a competitive market, bidding for placement will continually increase as each brand tries to displace the others. Unless your PPC budget increases annually, this will lead to fewer clicks per year. You may be honing your ads and keywords to the point of driving only the most targeted users to your site, but all you’ll see year to year is a loss in traffic.

Let me paint a quick picture. In 2009, your spend / budget was $12,000 monthly. After things were humming, you spent $1.25 on average per click (random number I made up). That meant 9,600 visits per month to your website.

One year later, it’s the end of 2010, and you review your stats. You spent $12,000 monthly again. But this year, you spent $1.65 per click in order to remain in the 3rd to 5th ad position. That means for the same budget, you only had 7,272 visits to the site. That’s 2,328 fewer visitors to your website.

If this is the road you choose, one thing is guaranteed: whichever agency or individual you choose to handle your Pay Per Click will be replaced every 1-2 years while your company continues to have no clue what to do to fix the problem.

2. How Do You Justify the Expense Each Year?

After you’ve spent Year One on driving as many targeted visitors as possible to your site, it’s time to revisit the budget. You have to justify results. You show the CMO a 9,600 visit increase for 2009. Okay. Maybe that’s good enough for him/her. But what do you say at the end of 2010 when you’ve 2,328 fewer visitors to show for the same budget? In other words, your budget is about to be reallocated.

Stop the bleeding before it happens. Take a little more time with your existing (or next) PPC vendor and establish G-O-A-L-S. Yes. Goals. Real ones. Goals that point to dollars and cents. That can be added up to total something worth presenting to the CMO that he/she won’t laugh or cry at.

But There’s No Technology in Place to Measure Actual Sales/Profit

The obvious solution is to make a well-documented case for implementing said technology. Whether it’s SalesForce or some other Web to Phone measuring stick, your company needs to know how much it profits from your efforts.

Why? Because if you’re spending $12K and making a massive profit, you should increase your spend until the profit plateaus. There’s absolutely no reason to NOT spend more and more money when it generates significant profit. This is just good plain common sense. Why would your CMO say “Sorry, that’s not in our budget,” if spending $50K generated $500K? Where’s the logic in that? You can’t afford to make insanely good revenues? I have no response to that.

What to Do with Gray Area

Sometimes you can’t convince the powers that be to integrate solid analytics software to track everything from ad dollar to conversion. What then? Then it behooves you to make the most of the gray area in which you live.

Get your boss or boss’ boss to agree to a dollar amount per visitor assumption. If 50,000 visits to the site equals $21.5 million, do the math. Divide the money by the visitor. But get the boss to agree that each visitor is worth $X. It’s a step. A very unscientific step. But it’s at least one which will then allow you to draw comparisons.

Example: If 50k visitors are worth $21.5 million, and next year you only drive 40k visitors to the site per month but you generated $29.2 million, you’ve shown value in your work by making each visitor worth more money. Fewer visitors generating more sales equals a “more targeted” PPC campaign (assuming all other marketing efforts are equal). Again, this is very unscientific. In fact, you should present this scenario to your boss as a proof that he/she doesn’t want to go down the path of gray area marketing goals. Perhaps this amorphous scenario will convince them to spend the dough to track the visitors from click to sale.

After all, if in 3-5 years (or even less), you can lower your monthly spend to pay for the tech / tracking upgrades, you’ll have proven a solid, measurable return that can be significantly increased going forward as you spend the full interactive budget on actual visitors.

There are other tactics that have worked in the past for upselling one’s own boss on analytics/measuring tools. What’s been your experience? We’d like to hear.

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