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Search Engine Marketing : Higher Budgets, Revenues, and Education in 2006
JupiterResearch has released a study which shows that more search engine marketers are spending larger budgets and generating more revenues. The study finds that the share of search marketers with annual revenues of $15 million or more has risen from 25 percent in 2005 to 37 percent in 2006. Search marketers are also doing a better job of tracking ROI and taking advantage of API based third party systems, with the number of SEM’s using bid management and Web analytics tools has risen from 19 percent last year to 26 percent this year.
“The continued growth in size and complexity of search campaigns will spur search engine marketing (SEM) outsourcing,” said Sapna Satagopan, Research Associate at JupiterResearch and lead author of the report. “More than fifty percent of large marketers outsource at least one of their search marketing services.”
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The report also finds that spending on search marketing jumped in 2005. Almost 24 percent of search marketers spent more than $500,000 on SEM campaigns in 2005, compared with 12 percent in 2004. The growth in the size of spending will push the competition as well, forcing smaller marketers to optimize their campaign to compete in the search marketplace.
This year, 66 percent of marketers plan to increase search spending. This number climbs to 72 percent when referring to sophisticated marketers, or those who use bid management tools and Web analytics packages. One of the factors contributing to the surge in spending is the increasing cost of traffic.
“Half of search marketers rank Web site traffic as their preferred metric for measuring success,” said David Schatsky, President of JupiterKagan. “There is an increasing cost associated with this traffic, primarily driven by the rise in keyword prices and the cost of expanding to new search providers.”