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Search Budgets to Increase in Drive for ROI
23 April 2009

Search Engine Marketing: Budgets Increase

More than half of companies (55%) intend to increase natural search budgets and 45% will escalate paid search investment this year as they look for measurable ROI in difficult economic times.

The annual UK Search Engine Marketing Benchmark Report, which surveyed 800 client companies, agencies and search consultants, found large numbers were continuing to increase spend on search, where ROI is more measurable.

Some 48% reported better returns on natural search (optimisation) campaigns and 43% claim greater ROI on paid search (Pay per click). However, 15% reported decreasing effectiveness for paid search compared to just 6% for natural.

The report, conducted by Econsultancy in association with search company Guava, found more companies were tracking ROI effectively than last year - 45% of respondents who used paid search campaigns and 35% using natural.

Linus Gregoriadis, research director at Econsultancy, said, “It’s encouraging to see a large proportion of companies still increasing budgets for both paid and natural search. It shows they’re better at measuring returns for search, and that’s good at a time when budgets are being cut.”

The report also revealed the end of Google’s Best Practice Funding had little effect on the market, with just 5% of companies reporting a negative impact since 1 January. However, 15% of respondents said Google’s trademark bidding policy had had a negative impact on ROI.

Unsurprisingly Google remained the behemoth for paid search, with 85% using the search engine, well ahead of Yahoo (44%) and Microsoft Live (30%). Yahoo took the biggest hit year on year, with 5% fewer companies using it for paid search.

Mobile search remained static, with just 5% of companies investing in mobile search listings. Despite 23% of respondents planning to invest in mobile search this year, more than two-thirds (37%) said mobile isn’t on the radar yet and a further 32% have no plans to use mobile search.

“Mobile search represents a huge opportunity for companies as there’s no one really doing it,” said Gregoriadis.

The report also revealed huge growth in investment in social media, which 65% of companies saying it’s used as part of the marketing mix. Twitter was used for marketing by 49% of respondents, compared to just 3% a year ago (nma.co.uk)