I promised I would devote a post or two to Turbocharging your SEM/PPC Analysis which Avinash just covered in his blog.  Too exhausted to do a long post but I’d like to add a couple of things to the comment I posted on Avinash’s blog.

"My hypothesis is that while a few companies are laughing all the way to the bank as a result of their SEM/PPC campaigns the rest are probably not maximizing return on investment."

Actually there are many businesses that can’t even find a good SEM company to handle their campaigns; a couple of years ago a company had to be willing to spend 150K to have one of the bigger SEM Agencies take that company on as a client.

I suspect, as the SEM industry is becoming more mainstream and saturated, it’s becoming harder to make a buck due to the competition.

"Measuring the Bounce Rate for SEM/SEM traffic in aggregate is an eye opener. It usually turns out that the Bounce Rate is really high (60%+, often even higher). Decision Makers are shocked that 60% or 80% of the traffic stays for such a small amount of time because we are paying for each click at the search engine."

It does not shock me - I’ve looked at clients logs via KeywordMax and similar products - and have seen the same IP Addresses try searches like "office furniture chair" and then "office furniture desk" within 30 seconds.  It’s not click fraud - and it can be interesting to see where the clicks are coming from (ie: NYBOE or John HandCock Building, Boston).  You have to look at the intent of the searcher - that is the fundamental driving force of Search, the intent of the Searcher.  Many people just are searching as many sites as they can find - they have short attention spans and don’t stop till they see something interesting - hence the "bounce rate".   And then there’s real fraud - but I found that I need solutions beyond Keywordmax to qualify it, and now many of the Analytic vendors,  including ClickTracks, are building Click Fraud detection into their offerings.

Search Cannibalization was not something I really looked at closely till recently (and I posted on it a couple of months ago).

"I will share a very simple way of measuring cannibalization. Take some of your most popular branded key phrases, assuming you don’t have heavy weekly seasonality factors, and turn off your campaigns for those key phrases for a week. Measure number of visitors, bounce rates, engagement with site (if you have that metric)  and conversion rates. Turn on the campaigns next week and measure the same metrics again, for the PPC/SEM slice. Compare the two sets of numbers and you have a nice idea of how much you are cannibalizing your Organic (free) traffic when you spend on PPC."

I like Avinash’s way of determining cannibalization - its simple and clearcut.

I put the rest of my thoughts in Avinash’s blog as a comment which you can go and read if your interested.