The State Of "Search" in 60 Seconds

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Understanding the current search advertising environment will help position your enterprise. SEMPO's annual State of Search Survey was released this week and Website Magazine has dugg deep to collect some of the most important guidance. Below is a quick roundup of what you really need to know to achieve Web success - from spending trends to metrics and search campaign objectives.

Growth will be driven by advertiser demand, rising keyword pricing and cost-per-click, increases in small- to mid-size businesses using search marketing, greater consumer usage of search utilities, better targeting and niche offerings.
 
The most popular paid placement search engine networks among advertisers were Google (used by 97% of respondents), Yahoo (70% - down from 86% the previous year), Live Search by MSN (53%), followed by Ask.com, Business.com, Miva, LookSmart, 7Search, Enhance, Pulse 360, Kanoodle and Search123.
 
Among advertisers, brand awareness was the top objective of paid placement campaigns (especially for larger firms) followed closely by selling products, services or content. Other objectives were generating leads, driving traffic to the website, generating leads on behalf of a network, and providing information/educational content.
 
More than 50% of respondents tracked site traffic, post-click conversion, click-thru rate, ROI, cost-per-click, cost-per-action and sales volume. Fewer than 50% tracked the cost of generating an offline sale, overall increase in revenue, return on ad spend, rank of links on search engines, employer satisfaction or brand impact.
 
Advertisers are seeing moderate increases in paid placement prices. Some 48% of advertisers and 58% of agencies saw a 10-30% increase in paid placement costs. Over three-quarters of respondents said they could tolerate further rises in paid placement prices, while 21% report that they could not afford to pay more for leads/conversions.
 
According to the survey, advertisers would elect to improve their marketing efficiency (site conversion and bidding programs) rather than cut back on their budget. Advertisers cited multiple ways they would react to steady cost increases including shifting budgets to niche search ads (26%), increasing the number of keyword buys (21%), and decreasing paid placement budgets (16%).
 
Behavioral targeting seems to be top of mind with online advertisers. Fully four out of five indicated they were willing to pay more for behavioral targeting opportunities, particularly for in-market consumers. There is some interest in demographic targeting and day parting. Some 80% of advertisers responding to the survey said they would be willing to bid more for clicks based on behavioral targeting criteria, whereas only 57% and 30% would pay more for demographic targeting and day parting, respectively. However, 35% said they are not currently targeting or retargeting searchers and do not plan to in the next 12 months.

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