While advertisers are allocating close to a third of their online advertising budgets to search (commercial and organic) very few have a clear and unified measurement methodology for the channel. Before examining the optimal measurement methodology for search, lets review how search works through the use of the “people in the room metaphor”.

Imagine search engines to be rooms with millions of people. When a specific question is submitted, the people in the room talk among themselves, to determine the experts in the subject. Once the experts are identified these vote over who should speak first, second, third and so forth. Recently which expert speaks first is also determined by their relationship to other experts outside the room. The role of organic search (usually known as natural or search engine optimisation) is to ensure a brand and website(s) are identified as experts and allowed to speak first on a specific question and subject. The room also features a paid members section, in which a selected number of individuals are allowed to speak first based on how much their wiling to pay to be heard first, second and third. The response of these paying individuals is included as part of the expert responses. The role of commercial search (usually known as PPC search) is to ensure your brand and site is featured as commercial responses relative to a specific subject and question.   

As the metaphor points out, organic search should be viewed as a long-term foundation program, which supports tactical short and mid term commercial search activities. While the benefits of search are understood, the challenge many marketers face is defining one set of common metrics to evaluate both commercial PPC search and organic search. In our experience there are eight key metrics that can be used for both commercial and organic search.

1. Rank (metric is visibility)
2. Traffic (metric is traffic to site)
3. Persuasion (metric is “initiated shopping cart” instances)
4. Sales Volume (metric is volume of conversions)
5. Sales Efficiency (metric is cost per conversion)
6. Net Revenue (metric is total revenue)
7. Revenue per Item (metric is revenue per conversion)
8. Return on Investment (metric is ratio of return)

The majority of advertisers measure the contribution of organic search through a 
web analytics solution (such as Web Trends or Omniture) - by placing a referral ID on all commercial search links, the contribution of natural search is determined by subtracting all commercial search from the total search contribution to the site. While this approach is effective in the short term, it lacks the sophistication required to answer key strategic decisions such as the optimal media allocation on commercial search given the contribution of organic search. A series of technology companies including Hit Dynamics provide in-depth tracking for natural search as well as site traffic.

Following a period of consultation with a client we defined the following reporting structure, which takes in consideration the visibility, engagement and transactional impact of organic search.

Visibility Reporting: How well ranked?
- Searches that returned at least 1 result
- Searches that returned at least 1 Top Ten result
- Searches that returned a number 1 result
- % Search area occupied
- % search are occupied by top 10 results
- % search area occupied by number 1 results

Engagement Reporting: How did visibility translate into traffic, bookings and revenue?
- Actual Traffic generated (Visits)
- Actual Conversion rate (visit to sale %)
- Sales Generated
- Actual Revenue Generated
- Actual Average Booking Value

In the next few weeks we will be publishing a series of knowledge pieces on the best way to manage commercial and natural search; examining the benefits of using different remuneration models other than media commission as a way of having your search agency work harder on exploiting the search tail.

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