Reprinted with permission from the Lyris.com blog archives.
By: Dane Christensen

In Parts 1 and 2 of this series I discussed ways to optimize your email marketing campaigns by carefully organizing your pay-per-click (PPC) campaigns to pass data that reflects your visitors’ intentions from your search engine ads through your landing page and into your email marketing software, segmenting mailing lists based on that data, and finally sending targeted, dynamic email messages based on those segments and data. (Whew! That was a mouthful!)

In this post I’m going to talk about how to close the loop on the PPC bid management / email marketingcircuit by using the results from the aforementioned dynamic email campaigns sent to email list segments to inform your SEM strategy.

The main idea here is that you can focus your PPC spending on SEM campaigns that generate the highest quality leads, not just the lowest cost leads. Would you rather spend $20 to attract a lead who just deletes all your follow-up email messages, or spend $50 to attract a lifetime customer? The answer is obvious.

Yet many marketers consider cost per acquisition (CPA) to be their ultimate PPC-related key performance indicator (KPI). Even if you focus on return on advertising spend (ROAS) you are getting a narrow view of the quality of customers or leads. High quality leads will:

• open your email frequently
• click on the links in those email messages
• convert after clicking on those email links

Those are the kinds of people you want to attract through your PPC search campaigns.

So what’s the big idea? Simply this: If you have one campaign, ad group, or keyword-targeted email segment that clearly outperforms others in terms of email open rate, click-through rate (CTR), or conversion rate, you may want to increase your PPC bids on the campaign, ad group or keyword that is generating those quality email addresses. Or conversely, if you have an email marketing segment that is a total dud, you may want to shut down that PPC campaign, because it is costing you money and not producing high quality leads or customers.

Now it must be said that this is a highly leveraged form of performance analysis, and as such should be handled with care. First, there are a lot of links in this chain: from PPC bid to cost per click (CPC), to PPC conversion rate, to PPC cost per conversion, to email open rate, to email CTR, to email conversion rate. The more steps you have between “cause” and “effect” the more leery you should be about the results. And there is also the fact that this process naturally involves some time lag, which will inevitably blur the results. And given the inherently blurry nature of this process, you’ll need plenty of volume to have confidence in any patterns you may see. To be clear, this is not suggested as a tool forfine tuning your PPC keyword bids. Rather, it is a way to identify the obvious winners and losers.

Using our Top 5 Flicks example site, it may be that people who converted from the “Comedy” PPC campaign don’t respond to follow up email nearly as well as people who converted from the “Action” PPC campaign. If it’s a slight difference, you probably shouldn’t put too much stock in it. But if the difference is blatantly obvious, it would make sense to divert PPC spending from Comedy to Action.

So there you have the complete circuit of the feedback loop about visitor behavior from your PPC campaigns, through your Web site, to your email marketing campaigns and back again.

It isn’t necessarily simple. You’ll definitely need the right tools for the job. But if you pull it off you’ll have achieved the holy grail of Internet marketing: the tight integration of PPC search engine marketing and email marketing – the twin engines of your online marketing strategy.