• by Laurie Sullivan  @lauriesullivan, April 13, 2011

Search engine marketing will rise 16% to $19.3 billion in 2011, outsourcing search and social media strategies continue to grow, and 74% of North American ad agencies admit that clients use Facebook, according to the annual report from the Search Engine Marketing Professional Organization (SEMPO) and Econsultancy.  

The report, based on an online survey of 920 companies conducted in February and March, reports local search strategies on the rise, with 43% of agencies calling it a "highly significant trend" and another 41% labeling it "significant." Agencies say 34% of their clients' paid-search budget is now spent on local paid-search advertising, compared with 54% for national PPC campaigns, and 12% for international.

The report also found that mobile marketing is on the rise, as well as the use of behavioral targeting. Seventy-nine percent of companies call mobile marketing "highly significant" or "significant" to their strategy, up from 14% in 2010. SEMPO says companies now believe that mobile channels have more impact than personalization of search results, which companies viewed as the most significant trend in 2010.

Budgets are also on the rise -- with 54% of companies expecting to increase spending on search engine optimization this year, while only 10% expect to spend less. On average, companies expect to spend 43% more on SEO in 2011, compared with 2010 budgets.

When survey respondents were asked to name the most important and second-most important objectives for search engine optimization 42% admit that driving Web site traffic has become the most common objective for SEO. Generating leads is now the main goal for 29% of respondents, while selling product, services or content directly online is the most important objective for 18% of the companies.

For paid search, 40% say generating leads is the most important objective, followed by 35% who say it is selling products, services or content directly online. Driving Web site traffic and increasing brand awareness are secondary objectives, with 19% and 35%, respectively.

Social media marketing budgets have increased slightly, but remain modest compared with SEO and paid search. About 64% say social media budgets will increase in 2011, compared to only 4% who anticipate decreases.

The report also confirms that marketing and ad executives believe Google is being challenged by Facebook, with 47% of companies in North America -- and 45% in the rest of the world -- using the social media site to run paid-search campaigns.

Increased brand awareness and enhanced reputation remains the most important objective for social media marketing, with just 51% of respondents naming it as the top goal.