Behind The Numbers: A View from the Executive Suite

Search marketing is under even closer scrutiny

Keeping up with search's challenges is a never-ending proposition. Keyword prices change as soon as bids are put in, and optimization efforts become less effective within minutes of completion. And if that isn't enough, now CEOs are looking over search marketers' shoulders to scrutinize results.

"There's a big trend occurring now to move toward executive dashboards," explains Kevin Heisler, lead analyst for JupiterResearch's US SEM Executive Survey, 2007. "The CEO wants to be able to look at a few simple metrics to see how online advertising is performing. He's focusing on revenue, return on investment, profitability and what products are being sold online or leads are being generated."

Sixty-two percent of advertiser respondents to Jupiter's survey said that rising keyword prices were a problem; 45 percent said they had trouble tracking the effectiveness of search marketing; and 43 percent said they had problems managing search across multiple engines and discovering new, effective keywords.

"Rising costs continue to creep up slowly," says Chris Copeland, senior partner and managing director of Outrider. "Competition is increasing; there is lack of follow-through; and some companies are doing a poor job of connecting consumer intent with ad content."

In addition, "Marketers are not doing a good job of integration," says Heisler, whose report found that 34 percent said measuring offline impact of search campaigns was a concern. "Most companies are still operating in silos and it's a challenge for some of the more traditional marketing and advertising folks in a corporation to share information and data with the paid search or SEO team to try to improve the Web site to leverage the impact of advertising campaigns."

One-fifth of respondents said keyword match types and effectiveness of bid management tools were issues, and click fraud remains a concern for 27 percent of advertisers.

Meanwhile, 54 percent of respondents said they do not have enough time to focus on SEO. Inbound link building - one of the most time-consuming SEO tactics - worries 46 percent of advertisers. Hiring qualified SEO staff (19 percent) and affording staff (16 percent) are both concerns. Frequent changes to search engine algorithms (37 percent) and drops in natural rankings (31 percent) are top of mind.

Despite the rising costs, "most search marketers are not worried about declining ROI, so search is still profitable," says Heisler. "And they still have room to pay higher prices per click."

In fact, spending on search - the largest single segment of online advertising - will increase to $11.1 billion by 2011 and paid search spending will go up 65 percent this year, Jupiter predicts. Thirteen billion searches are conducted monthly online.

How do you overcome the challenges? "Buying as many keywords as possible is not enough," Copeland observes. "It begins with the development of a solid search strategy. When you know what your goals are, when you put methodology in place to connect testing creative and landing pages to user engagement, it makes it a lot easier to understand what you're willing to pay and what you should or should not be doing."

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