The hidden costs of the iceberg effect in SEM

The Iceberg Effect is perhaps most pronounced when it comes to driving up the costs of PPC ads. However, the phenomenon can hurt all your Search Engine Marketing (SEM) efforts.

What is the Iceberg Effect?

We’ve previously written about the Iceberg Effect. In that article, we discussed the Iceberg Effect in the context of PPC ads. However, the concept can extend to Search Engine Marketing (SEM) in general, which we’ll get into below.

For the sake of clarity, here is the problem of the Iceberg Effect in a nutshell. If you’re using paid search, you need to target particular keywords. Ideally, the terms you use and the terms your target audience use would be the same. Of course, things are rarely that easy.

While there is a fair degree of crossover between your ads and your audience searches, only targeting exact matches means you’ll miss out on many potential customers. The tip of the iceberg (the visible part) is where your customer’s search terms and your target keywords match. Everything else — all the potentially but not guaranteed to be related terms — is the bottom of the iceberg. Much bigger and much more mysterious.

Now, of course, you can widen your net with paid search. You can target phrases or broad keyword matches. But while that might result in more matches, it can also mean that your conversion rate drops, which means you spend more for each conversion.

How does the Iceberg Effect hurt your search engine marketing (SEM)?

First, let’s define what we mean when discussing Search Engine Marketing (SEM). There’s a surprising amount of confusion about what SEM is.

At a high level, SEM refers to any activities that help promote your website on a Search Engine Results Page (SERP). There are a few ways that you can promote your page, such as:

  • Paid search, like PPC ads, Local
  • Search engine optimization (SEO)
  • Local SEO
  • Local Services Ads / Google My Business
  • Display Ads
  • Shopping Ads
  • Video Ads
  • In-app Ads

All of these disciplines are a type of SEM with widely different costs and effectiveness.

While we’ve covered the Iceberg Effect with PPC ads before, it’s time to take a look at how it can affect the other types of SEM.

The Iceberg Effect on SEO

Some people don’t consider SEO a form of Search Engine Marketing. However, if you’re using content marketing to rank on SERP pages, it’s hard to see it as anything but SEM.

Semantics aside, let’s look at how the Iceberg Effect can hurt your SEO.

SEO uses keywords or topics to satisfy user intent. Sure, you’re not bidding on keywords exactly, but you are using keywords to connect with users. Of course, you can write articles and set up landing pages to satisfy specific keywords and queries, but it would be impossible to generate enough content to cover the exact phrases of all your customers. And this is where the Iceberg Effect rears its ugly head.

When search engines like Google index your website and its pages, they use various techniques to infer the meaning from the content. When users punch queries or words into a search engine, Google attempts to connect their users with relevant pages.

In general, it’s fairly successful at serving up content that meets its user’s expectations. Although, that’s not always the case. In some situations, it will give their user a page that is, at best, tangentially linked to their search term. The problem happens when the user gets to your page, realizes that they don’t want to be there, and bounces.

If this happens a lot, Google might infer that your page is low quality, which can hurt your rankings. Of course, you can use Google Analytics to see the search terms that lead people to your page. With this data, you can make adjustments to your site to reduce the likelihood of attracting this unwanted traffic. That can require time-consuming rewrites of your content or a reconfiguration of the keywords that your website targets.

The Iceberg Effect on Display Ads

Display Ads are a great way to promote products that live and die by their visual appeal. However, they are typically served to people browsing an app like Facebook, LinkedIn, Instagram, and so on.

Without any keywords and search terms to get mixed up, you might think you’re free from the tyranny of the Iceberg Effect. Sadly, you’d be wrong.

As you build up your targeting by adding demographics, interests, languages, and locations, things can start to get murky. While you might have some idea about how each criterion works individually, when aggregated, you lose sight of the bigger picture. Again, the bottom portion of the Iceberg contains much of the data affecting your ad performance, leaving you out to sea.

The Iceberg Effect on Ad Placement

If you use Google Ads, you’ll be aware of Ad Placement. In effect, you can set parameters for which properties your ads show on, like various websites, blogs, or YouTube. Automatic ad placement is a handy tool here to increase the reach of your ads. However, once again, it’s ruled by the Iceberg Effect.

By ceding control to Google products like Performance Max, you’re potentially facing an issue where your ads are served to uninterested audiences. If you’re paying for impressions, that costs you money, and if you’re paying for clicks, that can mean leads and website visitors that won’t convert. Neither is desirable.

Final thoughts

Targeting users with SEM involves a balancing act between casting a wide net and catching your ideal customer. Icebergs are unavoidable in some sense because, with limited criteria, you’re always going to serve ads to people with zero chance of conversions.

Instead of manually pouring through the data and trying to avoid wasted ad spending, consider using a marketing automation robot like Amanda AI that uses impact-driven modeling to get ads in front of people who actually want to buy your product. It’s not just that our robot will save you a huge amount of time; it also outperforms humans at marketing optimization.

Better results and more time for you to focus on other important tasks? It’s a win-win.

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