• by Laurie Sullivan  @lauriesullivan, September 10, 2010

How do those holding the purse strings perceive paid-search marketing when it comes to allocating budgets? About 44% of organizations believe PPC marketing remains an effective tool for producing measurable return on investment, and 33% believe it's a promising tactic to eventually produce returns, according to MarketingSherpa's 2010 Search Marketing Benchmark Report: PPC Edition released Friday.

Another 15% and 8% said PPC is either unknown or not on the company's radar, respectively.

Although a bit surprising, about 59% of organizations participating in this year's study -- nearly 2,200 search marketers -- do not have a formal process to routinely perform paid-search advertising.

Among the findings, the report analyzes the impact of local search on various types of organizations and the use of local search tactics. The majority of companies both have some level of impact from local search and expect to see impact within the next one to five years. Twenty-seven percent say they have a great level of impact today, rising slightly to 30% in the future.

PPC can require a significant investment in time and money. Increased lead generation topped the list when it came to the effectiveness of PPC objectives. Nearly half -- 49% -- said increased lead generation is very effective; 38%, somewhat effective; and 13%, not effective.

Increased Web site traffic came in at No. 2, with 45% believing PPC is very effective; 49%, somewhat effective; and 6%, somewhat effective. Increased online sales revenue ranked No. 3, with 40% indicating that PPC is very effective; 40% somewhat effective; and 19% not effective. Other objectives include increased brand or product awareness, increased offline sales revenue, improved brand or product reputation and improved public relations.

The report suggests that the perception of PPC's effectiveness for increasing offline sales, which only 22% said is very effective, is a result of difficulties in tracking the original source of offline sales. Improving product reputation also generated low scores. Only 19% and 6% of the organizations indicated that PPC is effective at achieving these objectives, respectively.

When organizations refer to the integration of social and search, typically the conversion centers on organic search, but this study attempts to link social with the impact that PPC can make. "Social media users," as referred to in this report, integrate social media and paid search campaigns. Those who do integrate social and PPC tend to see a 6% click-through rate for paid search engine traffic, which does not include contextual or affiliate advertising.

Mobile search impacts companies very differently, although the majority of organizations have only some level of impact. Overall companies are having some level of impact from mobile search. Currently, 15% said they have a great level of impact, compared with 24% that expect to have the same impact in the future.