Quantifying Google AdWords For Non-Transactional Websites

I was curious today, like most days, so I decided to google "Columbia Business School" (CBS). As an educational institution that encourages applicant research, I wanted to know if CBS paid for Google AdWords. It turns out, CBS does. And so does every major business school. They show ads for their school's keywords. It is a common practice in paid search to actually pay for your own keywords. Why? Do a search for "Stern Business School". On top of Stern coming up in the ads section, so did Daniel Webster and Columbia's EMBA program. If Stern didn't pay for their own term, then Columbia would be the most visible NYC school on the page. Companies risk losing prime placement on Google AdWords if they don't buy their own keywords.

But now I'm curious how CBS quantifies their paid search spend. A typical eCommerce site is able to slice and dice the data to determine if a click directly resulted in a purchase. They have an ROI and other key metrics to measure against. However, CBS is a school. It generates revenue in several ways, but the two primary revenue streams that are likely results of paid search are application fees and tuition. However, the anonymous data that is compiled by Google AdWords and Google Analytics (or Omniture) prevents a direct correlation from being analyzed. This is a challenge that any physical business may face. You have an ad spend, but you can't measure the effectiveness of that spend. What do you do now?

There are several options - you could just accept that the ad money must be spent in a defensive move, try to compare M-O-M or Y-O-Y revenue, or offer savings codes. With a defensive strategy, you are just blindly believing that you HAVE to spend money on ads to maintain your market share. You just throw money into a black hole and hope that it is appropriate. This could work, though it's easy for this strategy to get out of hand. You would probably be better off trying to benchmark your monthly revenue and profit performance (accounting for a typical customer growth rate) and then seeing how a daily ad spend affects that benchmark - adjusting as appropriate based on a net profit basis (not just revenue). Or, you could offer a savings code that provides a discount based on a special code that allows the school to track the effectiveness of an ad campaign.

Granted, the special code can easily be manipulated (posted on MBA application message boards, etc), but the concept of trying to quantify success is important when managing an AdWords (or any paid search) campaign. The ads are only as good as the data they can capture, and as a current student, future alumni, and potential endowment donor, I hope to learn more about how CBS spends their marketing budget and quantifies their paid search campaign.