Following on from the last post I made about the SEM Report 2007, I would like to continue with a slightly smaller post, if at all possible. Search budgets, objectives and effectiveness are on the agenda today and why companies should be looking seriously at how much more $$$ they should be spending in which area of search.
For the majority of companies a third of their budget is spent on search engine marketing. On average, 61% of search engine marketing is spent on paid search and 33% is spent on SEO. However both company and agency respondents are more likely to believe that SEO is more important than paid search in terms of impact on brand. This is shown in the graph below:

 

                                       

Major increases in search budgets are shown to be planned in SEO, paid search and Email. Other areas include Affiliate marketing and Mobile web. The most reported drop in budget was for Online Display Advertising, with a 10% reduction in spend planned. Could this be a sign of the times? With the popularity of online advertisements decreasing; they may soon be dominated by 2 or 3 major players in the industry and ignored by many more. Does this mean that companies will have  money to  spare?

Unlikely, any budget that no longer spent on online display will no doubt o be put into paid search and could have major benefits for all types of search engine marketing. For example;

· The budget could be increased in SEO to further improve the ongoing optimisation of the company’s website resulting in better link assurance from page to page, smoother optimisation of code and increased analytical decisions based on facts.

· There could be an influx of budget into the mobile search, with the new generations of phones net ready; this could provide better traffic from the mobile web, increasing sales, ROI, etc.

 Any area of Search Marketing could benefit from having more budget, new areas may even emerge from within Social Media.

Finding a way to show how SEO is believed to be more important than paid search doesn’t have to be a daunting task. Using the number of clicks / visitors and number of sales for tracking ROI for both paid search and SEO would show us results based on fact. This was the method used in the SEM report 2007. The results are as follows:

• Paid      search – 50% of respondents that know there ROI say they are getting      returns in excess of 300%. 22% of them say returns of over 500% or more.
• SEO      – two thirds (68%) are getting returns in excess of 300% and some 40% are      getting returns of 500% or more. 

SEO is definitely getting the better results, but still more money is spent on paid search. Maybe this is something that companies would look at in the future and realize that they may have been missing out on even higher ROI rates.

In the next instalment of the UK Search Engine Marketing Report will be based on the search engines and the problems that companies may face while trying to get higher in the search engine rankings.

Sam O