• by Gavin O'Malley  @mp_gavin, April 11, 2007

A full quarter--26%--of large advertisers in companies with annual revenues of $50 million or more plan to increase spending on search engine marketing by more than 25% this year, according to new findings from Jupiter Research.

An additional 28% of large advertisers anticipate spending increases between 11% and 25%, based on the expectation that keyword prices will continue to rise, Jupiter found.

"Because marketers with large companies anticipate including major search engines as part of their branding campaigns, they realize this tactic could result in additional expenses and are planning accordingly," says Kevin Heisler, Jupiter Research analyst and lead author of the report. "But the additional cost is just one of the challenges faced by marketers today."

In addition to keyword inflation, complex campaign management and methods of tracking the success of search engine marketing activity continue to elude marketers, according to Heisler. More collaboration among company CEOs, CMOs, and CTOs could change that, the report states.

"New media has changed the focus of marketing strategies used by companies of all sizes," said David Schatsky, President of Jupiter Research. "Accountability is crucial, but understanding these tactics shouldn't fall solely to chief marketing officers."

The report's sentiments were echoed Tuesday by search experts and media buyers gathered for this week's Search Engine Strategies Conference in New York.

"I don't think it's any surprise that search and rich media are driving growth," said David Rittenhouse, Group Planning Director at neo@Ogilvy. "Search is the most logical first dollar spent."

"Search is an essential component," said Anna Papadopoulos, Interactive Media Director at Euro RSCG 4D. This is a clear change for Euro RSCG 4D, which has often neglected search in years past, according to Papadopoulos.

Taking a shot at the other side of the agency equation, Rittenhouse said he was amazed by creative marketers' continued refusal to incorporate search into their strategic visions. "There's a shocking lack of interest from creatives," he said.

This view was repeated by Harry Gold, CEO of Overdrive, which helps clients generate leads through Internet campaigns. "Search is ignored by creatives," he said, adding, "Search continues to grow for clients, and is even being used for branding."