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SEMPO State of Search Engine Marketing Report Results Released for 2010
Thursday, March 25, 2010
Results from the annual SEMPO State of Search Engine Marketing Report have been released and suggest that the industry will grow from $14.6 Billion in 2009 to $16.6 Billion in 2010.  The report, which is based on a global online survey of nearly 1,500 client-side marketers and agency respondents conducted by Econsultancy, estimates that the North American search engine marketing industry will grow 14% this year from $14.6 billion in 2009 to $16.6 billion by the end of 2010.  A total of 1,472 respondents took part in the survey, including 527 advertisers and 944 supply-side respondents carrying out search engine marketing on behalf of clients.

The market has grown by roughly  four times since 2004.

The largest hurdle facing marketers?  The study suggests that measuring the return on investment (ROI) is the biggest challenge facing marketers this year in all three key search tactics covered in the survey -- search engine optimization, paid search, and social media marketing.  Other key findings include:
  • Around half of companies (49%) are reallocating budgets to search engine marketing from print advertising.  
  • More than a third (36%) are shifting money away from direct mail 
  • Almost a quarter are moving budgets from conferences and exhibitions (24%) and web display advertising
  • The rise of social media marketing budgets, although still modest compared to search engine optimization and paid search, represents the biggest opportunity for search marketers this year.
  • More than half of advertisers (56%) and agencies (62%) say that Google keywords have become more expensive over the last year.  
  • About a third of advertisers noted an increase in Yahoo (32%) and Bing (29%) keyword costs.
  •  97% of the responding companies are paying to advertise on Google AdWords.
  •  In comparison, half of responding companies (50%) use Yahoo! Search. This percentage has dropped from 68% in 2009 and 86% in 2008.
  • The proportion of advertisers who say they use Microsoft‟s Bing search engine stands at 44%,
    compared to 54% who said they used Microsoft Live (MSN) search in 2009.
  • Three quarters of respondent companies are using Facebook (74%) and Twitter (73%) to promote their brands or companies.

According to the official press release,
Marc Engelsman, SEMPO Research Committee, said, “While measuring ROI seems to be an obvious reflection of today’s economic environment, it is important to note as it will likely continue to drive budget decisions.  This bodes well for the continued growth of the search industry as evidenced by the projected increased investment in search tactics.”
SEO vs PPC: Where are Advertisers Putting their Dollars?

There were some interesting trends reported from the SEMPO study with regards to SEO vs. paid search.
  • On average, companies expect to spend 43% more on SEO in 2010 than they did in 2009 (44% specifically for North America)
  • More than half of companies (52%) expect to spend more on SEO in 2010 than in 2009, and this
    compares to only 9% who expect to spend less. Some 39% of respondents say they will spend
    about the same.
  • On average, companies expect to spend 37% more on paid search in 2010 than they did in 2009
    (38% for North America).
  • Half of companies (50%) surveyed expect to spend more on paid search in 2010 compared to
    2009.
  • 16% of respondants say they will spend less on paid search.
It was interesting to note that for SEO, 42% of respondents say ROI measurement is one of their three biggest challenges, while 43% cite this problem for paid search.  So for companies, where is the budget coming from for SEO and paid search increases?

Furthermore,increases in search marketing budget is coming from various marketing and I.T. programs as seen here:


and on the paid side of things, budget is coming from the following areas:
 The 111 page PDF report can be accessed via SEMPO members by clicking here.  Last year's full report can be found here.

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posted by Jody @ Thursday, March 25, 2010  
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