The pros and cons of centralizing global SEM managementDecember 23, 2014
One of the most interesting things about working in SEM is that we have more opportunities to run global campaigns compared to our counterparts in other media. SEM, conducted on major platforms like Google and Bing, is fairly standardized across many countries around the world. The efficient auction system allows search marketers to circumvent extraneous factors such as demographics, psychographics, and myriad publishers, which prevent our display counterpart from operating on the same international scale. In addition, the simplicity of text ads and the quantitative focus of SEM help marketers to optimize ads even in countries where they are not familiar with the language or the culture, often with the simple help of Google Translate.
Recognizing these advantages and the low cost of entry associated, more and more clients are tasking SEM marketers to centralize multi-national operations in one team. This practice has many benefits:
- First, the global SEM hub would have closer proximity to the client and agency strategic nerve centers; they can translate the central objectives and strategies more faithfully into the tactical execution.
- Second, not all countries have the same level of SEM talent pool. In more advanced markets like the US and UK, a high-quality SEM team can be assembled relatively quickly.
- Third, larger SEM markets like the US and UK also benefit from closer proximity to new SEM product releases and innovations, enabling the hub teams to quickly adopt best practices.
- Fourth, centralizing the global execution in one team helps unify the ad messaging, ad operations, and reporting.
- Fifth, centralization reduces redundancy in cost, training, and process creation.
However, depending on the brand, there could also be some downsides to the centralization of the SEM execution:
- For brands with more localized objectives and product focuses, it’s more difficult for one individual team to coordinate. For example, if the client in France wants to focus on branding, but the client in Germany wants to focus on sales, optimization could be sufficiently different that there’s no economy of scale to be gained.
- In many of the smaller markets, SEM talent is quickly growing. If such a talent pool exists and if there are substantial local activities in display or traditional media, it might be more appropriate to establish local SEM teams who can better align to the holistic local media efforts.
- If the product or the brand voice has specific language or cultural nuances, it’s extremely helpful to establish local SEM teams who can regularly create and revise keywords, ad copy, and landing page contents that are sensitive to the local language and cultural context.
In the end, there’s no clear choice between centralize and localizing SEM management. The unique conditions of each brand would place it somewhere on the spectrum of this duality. As a SEM consultant, you should consider 4 key questions. If more of the answers are yes, then centralization might work for you; vice versa, you might want to localize SEM management:
- Does your business promulgate the same business objective, product focus, and brand message across all markets?
- Do you operate in a large number of markets, and some of which have relatively small marketing budgets?
- In markets you advertise, is there a shortage of SEM talent presently and for the foreseeable future?
- Does your brand need constant marketing innovation in all markets?
For clients who are using a centralized SEM approach, they are often curious about how to best target audiences across the multiple markets. This happened with one client, who has an extremely wide global customer base, and whose service is provided at the same price and in the same language for all customers. Overall, they are in the perfect situation to leverage a centralized SEM team.
The client asked us if they should choose:
- Option 1: to create separate clusters of campaigns, each cluster shares the same structure as others, but each targeting separate individual market;
- Option 2: to create one lone set of campaigns, targeting all markets.
It’s a very interesting question. Since there’s no value differentiation between the markets, by theory, the marketer could choose option 1 and use an appropriate Cost Per Lead bidding model; this would let the auction allocate investment towards the lowest CPL market or markets, thus maximizing the leads from a shared budget. In addition, it’s easier to create and to maintain one set of campaigns instead of multiple sets.
But in practice, there are a number of difficulties to option 1:
- Geo-targeting all markets in one campaign prevents marketers from using different keywords/copies for different markets. Some markets might respond better to discount offer messages but others might not. Some other markets might see the most efficiency leads from competitive keywords, while other markets don’t.
- Geo-targeting all markets in one campaign also hampers accurate and efficient performance analysis. In this case, the data will be so muddled, making it difficult to determine which keywords work in which markets… For example, if we see very low lead volume and high CPL for the competitor term, we might assume the competitor term doesn’t resonate with audiences across the multiple markets. But with more in-depth market level data, we might see that it performs poorly in most markets, but has a very low CPL in a handful of small markets. And if we based our decision on a multi-market campaign, we might decide to pause this keyword. But with the market-level data, we actually know this keyword would be prioritized, but only in those small markets.
Search engines’ ability to geo-target multiple markets in the same campaign might be tempting. But maintaining a granular campaign structure that segments individual markets ultimately provide greater accuracy and efficiency in optimization and analysis.