I asked Marc Engelsman, chair of the SEMPO Research Committee, for his thoughts on the report. "The biggest surprise," he says, "is that companies and advertisers have stayed steady in their use of SEO over the past few years (around 90%), while their use of paid search has increased significantly over the past two years and is now at 81%."
This growth "really reflects the importance that companies' C-Suites are placing on measuring ROI for all marketing efforts in this economy," he says. "Traditional print advertising (a medium that does not easily provide the same immediate and direct connection to ROI) is taking a big hit. Companies are shifting away from direct mail, conferences and exhibits. Direct mail['s drop] is surprising [because] it is usually regarded as a highly-measurable marketing ROI tool. It is [also] interesting that the increase in paid search investment comes with eyes wide open to the escalating increases in keyword cost-per-clicks."
Among the many other findings are the following:
- Due to the poor economic climate, 2009 was a slow year overall, but had a significant upturn in the fourth quarter. Overall the market is estimated to grow by 14% in 2010, and reach a value of $16.6 billion by the end of this year.
- ForForty-nine percent of companies have reallocated print ad budgets to SEM; 36% have taken money from direct mail budgets; 24% are moving budgets from conferences and exhibitions;and 23% are moving from Web display advertising.
- Ninety-seven percent of companies are paying to advertise on Google AdWords, 71% advertise on the Googlesearch network, and 56% use the Google content network. Half of responding companies (50 %) use Yahoo Search, while 44% use Bing.
- Fifty-six percent of advertisers and 62% of agencies say that keywords have become more expensive in Google over the last year, while only 32% of advertisers observed an increase in Yahoo, and 29 % in Bing.
- Overall, companies expect to spend 43% more on SEO in 2010 than they did in 2009 (44 % specifically for North America) -- a big rise, but slightly lower than the expected 46 % increase for 2009 when this survey was last conducted.
- More than half of the companies surveyed (52%) expect to spend more on SEO in 2010 than in 2009, while 37% of companies expect to spend more on paid search in 2010 than they did in 2009 (38 % for North America).
- Social media marketing (SMM) budgets are still modest compared to search engine optimization and paid search, with 73 % of companies having a budget of less than $25,000 for social media marketing in 2009. Twenty-three percent said they had no SMM budget whatsoever.
- Fifty-three percent of companies are not using third-party bid management tools for paid search, instead utilizing search engine tools and Excel.
- Seventy-four percent of agencies are more likely to agree that
"the rise of social media has had a significant impact on their search engine marketing"; only 52 % of company respondents say that social media has had a moderate or huge impact
on search engine marketing.
- Companies consider personalization to have the most significant impact on search, while agencies see the rise of local search as most significant.