Search Engine Marketers Sticking to Basics But Eyeing Video, According to SEMPO 2007 State of the Market Survey

June 19, 2008; 11:22 AM

WAKEFIELD, Mass., June 19, 2008 (PRIME NEWSWIRE) -- 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. The full survey is available to members at http://www.sempo.org/learning_center/research/sempo_annual
_state_of_search_survey_2007_results.

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.

Survey and research findings show:

• The North American SEM industry grew from $9.4 billion in 2006 to $12.2 billion in 2007, exceeding earlier projections of $11.5 billion for 2007.

• North American SEM spending is now projected to grow to $25.2 billion in 2011, up significantly from the $18.6 billion forecast a year ago.

• Marketers are finding more search dollars by poaching budget from print magazine spending, website development, direct mail and other marketing programs.

• Organic SEO's popularity has risen significantly, from 80% in 2005 and 76% in 2006, to 89% in 2007. On the agency side, the percentage of respondents offering organic SEO rose from 80% in 2005 and 87% in 2006 to 91% in 2007.

• Four out of five advertisers are willing to increase their online advertising budget in order to add behavioral targeting to their pay-per-click campaigns.

• Some 57% of online advertisers polled are willing to spend more on demographic targeting, such as age and gender. Advertisers, on average, would pay 11% more for both behavioral and demographic targeting.

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. To join SEMPO visit http://www.sempo.org/join/.

About the Search Engine Marketing Professional Organization (SEMPO)

SEMPO is a global non-profit organization serving the search engine marketing industry and marketing professionals engaged in it. Its purpose is to provide a foundation for industry growth through building stronger relationships, fostering awareness, providing education, promoting the industry, generating research, and creating a better understanding of search and its role in marketing. Representing thousands in over 30 countries, SEMPO has over 720 members. It represents the common interests of companies and consultants worldwide and provides them with a voice in the marketplace. SEMPO's education and outreach initiatives are sponsored in part by Microsoft, Yahoo!, Google, Superpages.com, SMX and Search Engine Strategies. For more information, or to join the organization, please visit http://www.SEMPO.org.

The Search Engine Marketing Professional Organization logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=2228

About Radar Research

Radar Research is a Los Angeles-based research and consulting firm aimed at the nexus of media, technology, culture and commerce. It was founded by two former Jupiter Research analysts, Marissa Gluck and Aram Sinnreich. Radar conducts research on behalf of both corporate clients and non-profit organizations, such as DoubleClick, Sony Pictures Entertainment, Nielsen//Netratings, the Online Publishers Association and The Norman Lear Center. For more information, please visit www.radarresearch.com

CONTACT:  Search Engine Marketing Professional Organization
          Greg Jarboe
          978 549-9537
          pr@sempo.org