Lee Odden

SEMPO Survey: SEO More Popular than Paid Search

Here are highlights from SEMPO’s 2005 Annual State of Search Survey, or as I heard Dana Todd call it at SES Chicago, "the SEMPO Big Ass Survey".

  • SEM was a $5.75 billion industry in North America in 2005, and will grow to $11.1 billion in 2010
  • Brand awareness is advertisers’ top objective for SEM programs, particularly large firms
  • Organic SEO is the most popular form of SEM, with 4 out of 5 advertisers using this method, with paid placement a close second at 76%
  • ROI is in line with inflation: Four out of five advertisers say they could afford to pay a mild increase in the price of paid placement, while of advertisers and all agencies report moderate price hikes this year.
  • SEM is poaching budget from other marketing channels for the vast majority of advertisers – especially from affiliate marketing and web site development.
  • Senior executives consider SEM a high business priority with almost half of advertiser respondents (47%) saying that senior management at their companies were "very involved" in SEM programs, especially among companies with fewer than 500 employees
  • Most advertisers plan to manage the majority of their SEM spending in-house in 2006. SEM agencies may see a decline in business as a result.

The full report will become available early 2006, first to SEMPO members and then the general public.  Here are results from the 2004 State of Search Marketing survey.

Tags: SEMPO Survey, SEM Spending, SEO Spending, Search Marketing Budgets, SEM, SEO, SEMPO

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Lee Odden About Lee Odden

@LeeOdden is the CEO of TopRank Marketing and editor of Online Marketing Blog. Cited for his expertise by The Economist, Forbes and the Wall Street Journal, he's the author of the book Optimize and presents internationally on integrated content, search, social media and influencer marketing. When not at conferences, consulting, or working with his talented team, he's likely on a beach somewhere doing absolutely nothing.

Comments

  1. This survey has a lot of implications in the search engine marketing industry. Here are some:

    #1. It shows that the PPC industry is still at a tender age and yet to experience its full marketing potential. Why did say this? By the time you consider the fact that over 90% of SE users don’t go beyond the first SERPs, then you would realize that the rest of the websites in pages 2 to infinity would soon be fighting for the first page of the SERPs through PPC!

    #2. It’s a fact – not every website can fit into the first page of the SERPs, so some website owners would eb=ven give up trying or get frustrated to get to that juicy first page. Hence, they would decide to ALWAYS rely on PPC ads… more money in the Paid Search.

    #3. With a *thriving* black-hat SEO practice, even among top Search Engine Marketers, organic SEO would always be of prime importance to many, though, they may get caught they would reinvent themselves to come back in another form.

    #4. Many people are still confusing SEM with SEO and PPC. By the time they start understanding the differences, there will be more money flowing towards Paid Search, see (http://forums.searchenginewatch.com/showthread.php?p=67147#post67147).

    #5. Many newbies who “discover” the importance of search marketing make SEO their first point of call, then after going through the motions of inability to become #1 in the SERPs, they resort to what? Paid Search.

    The question is: How large would Paid Search get?
    Simple Answer: As large as SEO! That means 50-50.

    Is the market going to be as big as predicted? Much bigger!

  2. The thing is, while many companies are engaged in SEO more than paid search, they are putting very little money there. 70% of search marketing budgets are going towards paid search and a mere 12% or so are going to SEO.

    So it doesn’t matter that more people report using SEO more. The vast majority of the money is going to paid search.

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    […] These statistics from SEMPO blew me away… if you work in the internet marketing industry they should be interesting. […]