Search Engine Marketers Sticking to Basics but Eyeing Video, according to SEMPO 2007 State of the Market Survey
Branding and Sales Are Consistent Key Motivators in Paid Placement as Industry Matures; at the Same Time Video Search Is Getting Traction
Wakefield, MA, June 19, 2008 – The search engine marketing (SEM) industry is beginning to mature, as year-to-year figures show marketers consistently have direct sales, branding and leads as their primary objectives, according to SEMPO, (Search Engine Marketing Professional Organization), www.sempo.org, which conducts an annual state of the market survey of 867 search engine advertisers and search engine marketing agencies.
Similarly, the list of top metrics for SEM, for example, has remained unchanged from 2005 until the present, with traffic, conversion rates, click-through, and ROI occupying the top four slots in each year.
"The search engine marketing industry, while still evolving, has established itself as a powerful economic force. SEMPO’s survey shows search marketers are keeping their eye on the prize by focusing on bottom line results such as sales and branding,” says Kevin Lee, a member of SEMPO’s board of directors and its research committee. Lee is chairman and CEO of Didit.
Against this backdrop of a maturing industry, however, marketers are assessing emerging channels such as video and mobile search. About 43% of respondents indicated an interest in contextually targeted advertising attached to video search results. Within that segment, about half showed the highest levels of interest. There is one caveat: Two in five advertiser respondents claim they want to pay the same for video search as they’re currently paying for traditional search, and 19% said they want to pay less for video search than for traditional search advertising. Among advertisers who report the willingness to pay a premium for video, most prefer to pay 20% or less as a premium.
About 40% of respondents indicated an interest in mobile search but less intensity of interest than video. About a third of advertiser respondents claim they want to pay the same for mobile search as they’re currently paying for traditional search. A quarter said they want to pay less for mobile search than for traditional search advertising.
Price sensitivity has also been a constant as the industry matures. Advertisers have consistently said each year that, while roughly three quarters could afford a price increase for paid placement, such an increase would need to be on the order of 30% or less.
Objectives and Metrics
The 2007 survey showed direct sales and branding are the top objectives of paid placement programs. Almost identical to the 2006 survey results, advertisers report their primary objectives for SEM spending are direct sales (58 percent) and increased brand awareness (61 percent). An equal percentage of respondents report they are trying to generate leads for sales they will close and for sales a dealer or distributor will close (both 20 percent). Another two in five advertisers report they are trying to drive traffic to an ad-supported site.
More than 50% of respondents tracked the following success metrics for the SEM campaigns: site traffic, post-click conversion, clickthrough rate, ROI, cost-per-click, cost-per-action (e.g., sale), cost of sales generation, and sales volume. These figures were very consistent with the 2006 survey results.
Other Survey Data
The 2007 SEMPO global survey of online marketers was conducted by Radar Research and was administered via IntelliSurvey, Inc.
The complete survey data is available to SEMPO members and gives the members the benefit of both an in-house advertiser and agency perspective, notes Lee, plus tremendous insight into spending trends and budget allocation data.
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