SEMPO Study - SEM roars along, but marketers want more
In its eighth year, the State of Search Study from SEMPO and Econsultancy has been a record of growth. After slowing in 2008-2010, SEM has returned to robust growth of nearly 19% in 2012. But change is afoot, with more marketers prioritizing integration and attribution in SEM.
Search marketing is a old dog in digital. SEMPO has been fielding this unique study of the industry since 2005 and Econsultancy has participated in this research for the last three years. Search is a channel that marketers know well, perhaps better than any other online tactic, and yet every year there's dynamic change.
The findings of this years study suggest an industry fully back in growth mode, with significant upside in the emerging areas of mobile and social, as well as in the core areas of PPC and SEO. But it's also a channel under scrutiny, as marketers want to fully understand how their search budgets affect the whole of the customer journey.
Spending in SEM continues to rise, and rise quickly. Our mid-year estimate for 2012 is for growth of 19%, followed by 17% in 2013. That increase can be seen all major areas of the industry, though spending on SEM technology and mobile search will likely be particularly strong.
With growth and investment comes responsibility, and marketers are increasingly interested in how to attribute the impact of search on revenue. The paths that consumers take often leap between online and offline, and are influenced by a variety of marketing channels, paid, earned and owned. For many organizations, examining the "last click" is no longer enough; they want to view the whole of the customer journey and understand the context of decision making.
If done right, attribution shines a light on programmatic efficiency and expands marketers' knowledge of their audience and how it interacts with content and advertising. Unfortunately, attribution is a challenge and getting "close" has no value. In SEM, the need for accuracy will drive technology adoption and investment in talent.
Other Key Findings
Changes to the Google algorithm affected a large percentage of marketers, or at least has them concerned. 87% call the updates of the last 12-18 months “significant or highly significant.” In most cases marketers feel the overall effect to be positive, but success in combating SEO spam sites has come at the expense of many legitimate brands.
In a year of some turmoil, some key trends remain top of mind. The rise of the mobile internet is still keeping search marketers up at night, with 88% describing it as “significant or highly significant” up from 79% in 2011.
Getting budget for [SEM, social] ticked up as a challenge by between 5 and 11 percentage points. This appears to be an issue for the smaller organizations in the sample, but is interesting for its juxtaposition with overall positivity for digital budgets in general and SEM in particular.
New money is stealing people from search. While mid-level SEM professionals are in relative abundance, data jockeys are difficult to find, and even harder to keep. Hiring and retaining talent grew in importance as an issue, especially in PPC, where the percentage citing it as a key challenge grew 50% from 14% to 21% of the sample.
Many companies who experimented with Facebook PPC in 2010/2011 seem to have stopped. The 2012 survey shows a sharp drop in those reporting they regularly mount PPC campaigns on the social giant, down from 74% to 56%. However, this doesn’t mean a drop in total spending, as those no longer using the service fall toward the SMB end of the spectrum. It’s to be expected that there will be continued volatility in usage of Facebook for PPC campaigns as the product evolves.
The larger goals of SEM and social continue to evolve. While direct sales, lead gen and traffic still dominate the top goals of marketers, SEO and PPC are increasingly viewed as brand channels as well. Agencies increasingly report that their clients are including brand/reputation as a measure for the success of their SEM efforts. Meanwhile, social shows the reverse, with marketers moving away from a vague impression of brand influence and toward harder metrics related to customer satisfaction and traffic generation.