Jupiter Research
"US SEM Executive Survey, 2007: Understanding the Increasingly Sophisticated Search Marketer,"
- A majority of search marketers are planning on spending more on search this year, and are mostly satisfied with the return on investment (ROI) they are seeing from search.
- "Very few people are dissatisfied with search. The ones that are tend to be smaller advertisers managing less than 1,000 keywords,"
- "We see many advertisers getting more aggressive with their spending, especially agencies. They've figured out what makes search so successful, and are content with the ROI."
- Overall, 65 percent of advertisers expect to increase their spending
- 7 percent expect to decrease spending on search this year
- 28 percent expect no change in their spending.
Annual revenues of $50 million or more:
- 26 percent of large advertisers in companies with plan to increase spending on search engine marketing by more than 25 percent this year.
- 28 percent of large advertisers anticipate spending increases between 11 and 25 percent, mostly due to an expectation of a continued rise in keyword prices.
Annual revenues between $15 and $50 million:
- 23 percent plan to increase spending on search engine marketing by more than 25 percent this year
- 21 percent anticipate spending increases between 11 and 25 percent
- 29 percent of advertisers expect no change in search spending.
Annuals revenues between $1 and $15 million
- 17 percent plan to increase spending on search engine marketing by more than 25 percent this year
- 24 percent anticipate spending increases between 11 and 25 percent.
- No change in spending is expected by 25 percent of these advertisers.
ROI
The majority of advertisers, especially larger advertisers, report that they are satisfied with the ROI of their search marketing activities over the last year. Among advertisers in companies with: Annual revenues of $50 million or more:
- 27 percent reported being "very satisfied" with their ROI,
- 40 percent said they were "satisfied."
- Another 25 percent said they were "neither satisfied nor dissatisfied,"
- 7 percent were "dissatisfied,"
- 2 percent were "very dissatisfied."
At the other end of the scale, small advertisers, those in companies with less than $1 million in annual revenues:
- Were less satisfied, though about half were still satisfied (37 percent) or very satisfied (13 percent) with their ROI from search.
- 28 percent were neutral
- 17 percent were dissatisfied
- 5 percent were very dissatisfied.
Search Marketers' Concerns
While search advertisers are mostly satisfied with their ROI, they still face several challenges. The biggest problem reported by advertisers across the board was rising keyword prices, which topped the list for large advertisers in companies with:
- Annual revenues of $50 million or more (64 percent)
- Annual revenues between $15 and $50 million (64 percent)
- Advertisers in companies with annual revenues between $1 and $15 million (63 percent)
- Small advertisers, with less than $15 million in annual revenues (57 percent).
Measurements and Objectives of Search
Many of the problems with measuring and tracking ROI are the result of advertisers not adequately implementing analytics, Heisler said. The problem is especially magnified for marketers looking for branding effects from search.
Many managers claim that direct response marketers by far have been better at measuring ROI. Branding measurement is more complex, and many marketers are not using the right metrics or analytics goals. Overall, many marketers are not using analytics to their fullest extent, although they've really closed the gap in the past year.
Large search marketers are becoming more savvy with aligning their measurement with their goals. Among large advertisers with more than:
- $50 million in annual revenues, 45 percent of marketers reported an objective of lead-generation
- 37 percent measure that objective on a regular basis.
- Among advertisers with annual revenues between $15 and $50 million, 39 percent say lead-generation is an objective, and 33 percent measure it.
Lifetime revenue-per-user is the next most common objective, reported by:
- 28 percent of advertisers in both groups
- 22 percent of large advertisers measure it
- 21 percent of advertisers in the $15 to $50 million range do so.
Profit-per-user is another popular objective, named by 24 percent of large advertisers (and measured by 26 percent of them) and 29 percent of advertisers in the $15 to $50 million range (and measured by 28 percent).
Search Marketers Getting Adventurous
Advertisers are planning on utilizing many more new tactics this year than last, with:
- Geographic targeting
- Demographic targeting
- Local search
- Contextual advertising topping the list of tactics marketers expects to try out.
2007 will see:
- 72 percent of marketers say they'll try geo-targeting, compared to 43 percent who used it last year
- 78 percent planning to try local search this year, compared to 42 percent last year.
- Contextual advertising is on the list for 57 percent of respondents this year, compared to 41 percent who used it last year
- Demographic targeting is planned by 64 percent of respondents this year, compared to 41 percent last year.
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