Before you ever begin investing your hard earned, preciously saved or dangerously leveraged SEM investment, you must first determine your ROI threshold expectation. In other words, what would the minimum return be from your SEO projects need to be by month 6 - 8 for you to continue the investment? It is entirely unfair to yourself or the agency running your internet ad campaigns to set too short of an expectation. SEM takes time to organize, strategize, and develop enough accurate data with which to optimize and so forth. Through my work experience as a search marketing campaign manager, I have identified and categorized three separate classifications for SEO and PPC clients with respect to their expectations. In this example I am going to use a base, round number with no particular significance other than the ease of illustration. Also keep in mind that it is most appropriate to use revenue, as opposed to profit in this self-analysis because this is the most accurate metric to gage, whether working for yourself or hiring a search marketing firm.

These scenarios are based on a per $1,000 monthly spend.

$500 Revenue Monthly As a Minimum

These SEM clients enter online marketing with a very realistic perception of what to expect from their campaigns by month six. It is understood that the "if you build it they will come" philosophy is merely a farce. Search engine marketing is largely unknown and therefore unpredictable but sets their goals moderately low so as to avoid disappointment, not relying on their online efforts to float the business. These clients believe in the long-term outlook and don't want to give up if the internet investment doesn't payout immediately because they think to themselves "Well, with $500 worth of revenue coming, at least I have cash flow movement. Besides, last month's marketing only cost me $500 and I believe I put the good name of my company in front of a lot of valuable potential customers. Eventually they may come around to do business with me, and in the mean time I'm going to accumulate some repeat business as well as referrals. Of course I expect that its efficiency will continue to increase by returning more, but this is the minimum I need to justify the expenditures."

$1,000 Revenue Monthly As a Minimum

These SEM clients enter online marketing with a fair estimation of the return they expect to receive from their campaigns by month six. It is understood that while much hype about "the internet opportunity" persists, it may also become an expensive venture and therefore reality sets in that while the internet may not be a gold mine for everyone launching a site, it better return nonetheless. These clients seek to balance grounded business sense with hope, without over correcting their hope. "While my $1,000 monthly investment hasn't yet returned to me in profit, it has in come back to me as revenue. Results may not be ideal yet, but they are positive and so therefore so also is the outlook. With repeat customers, referrals and time my business will still grow slowly and is moving toward profitability. For these reasons, I can continue to justify the expenditure, even though the ROI is not yet ideal."

$2,000 Revenue Monthly As a Minimum

These SEM clients enter the online marketing arena with extremely high expectations, perhaps too high. Generally speaking these clients may have had some initial success, or believe they understand the opportunity enough to overestimate their growth potential. It is understood that the internet has made of quasi-successful businesses huge corporations at the mid-cap level, and are therefore willing to invest in it heavily with a moderately absolute expectation of immediate success. While the high expectations are positive and motivating to do "whatever it takes," there is a strong probability that frustration and impatience will lead to persistent change of strategy and channeling. Constant adjustment is certainly necessary, however too much change too fast results in abandoning marketing channels that might have created revenue efficiently had the proper time been alloted to allow optimization to bear fruits. These clients think to themselves "I'm in the business to make money. I understand that it takes money to make money, which is why I'm willing to invest heartily in doing it right the first time. The business model is sound, the product/service is needed and market share is obtainable because the barrier of entry isn't rock solid. I've also done some research to indicate that my competitor's websites are either out of date or insufficient to perpetually support their dominance or niche. Therefore anything less than a 100% return of revenue on my investment is a terrible waste of time and resources. If I can't get the ROI in SEM, then I will get it somewhere else."

One problem with this last expectation is that it rarely works for product-based businesses. And while it is certainly possible for service-based businesses, and significantly more likely, the time period of 6 - 8 months may be an inadequate time frame for the return to perform so well. Nothing online is impossible, but the purpose of this exercise to establish where you need to be. DO NOT assume as many do, that the lesser expectation is erroneously and financially not feasible to survive the brutality of business cannibalism.

Most important is to realize that at 6 - 8 months, the pipeline is just barely beginning to show promise.

More to come on my perspectives on the topic of assessing your SEM ROI threshold.