• by Tameka Kee , February 14, 2008

Marketers pegged organic search and behavioral targeting as the channels that delivered the greatest return on investment (ROI) and "outperformed other tactics" in 2007, according to stats from Marketing Sherpa's 5th Annual ad:Tech Year-End Survey.

Over 420 ad:Tech attendees responded to the survey in December, and some 57% said that search engine optimization (SEO) delivered "great ROI" and outperformed other tactics, including paid search, e-mail and contextual ads. That's up from 45% in 2006 and just 33% in 2005.

In contrast, marketer satisfaction with the ROI from paid search was down to 34%, a significant drop from the 49% that had said it performed best in 2006. With a constant influx of new, small business advertisers, and big brands funneling more dollars into paid search, the increased competition drove up keyword prices--a likely contributor to the slump in ROI.

But increased costs and less-than-stellar ROI won't stop marketers from continuing to invest in PPC campaigns, as 32% of respondents said they plan to spend at least 5% more on paid search in 2008.

Meanwhile, marketers are enamored with behavioral targeting, as 44% respondents ranked it as the top-performing online ad channel--ahead of contextual ads, rich media and banners. And 27% of marketers said they will increase their spend on behavioral ads this year, with the strong ROI seemingly attracting an even greater portion of the budget.

Advertisers weren't impressed by the bang that rich media ads delivered for their buck, as only 7% said that it delivered a strong ROI last year--a 75% drop from 2006. Still, the promise of engaging consumers with video, Flash banners and other interactive content continues to lure marketer dollars--as 26% of respondents said they intended to spend at least 5% more on rich media in 2008, down just slightly from last year.