Marketers Grow Search Advertising Budgets

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Marketers are spending significantly more on search advertising than they have in the past, according to a new survey of marketers and search agencies.

JupiterResearch, an internet research firm and division of JupiterKagan, New York, found that 40 percent of search marketers spent at least $500,000 on search in 2005, compared to 12 percent in 2004, in its "US SEM Executive Survey 2006".

In addition, the number of large, "sophisticated" search marketers, those who use Web analytics and bid management tools, rose from 19 percent in 2005 to 25 percent in 2006. About 44 percent of sophisticated marketers have annual revenues of $50 million or more.

"The sophisticated marketers have the ability to measure [campaign performance], which is going to expand the purchases of keywords," Sapna Satagopan (*checked spelling), research associate in Search Marketing, JupiterResearch, told DMNews.

Larger advertisers are also pushing up the price of keywords, Ms. Satagopan said. "The larger marketers...can spend more. They are pushing the price [up] for remaining on the top," she said.

In addition, 66 percent of marketers plan to increase search spending this year. One of the factors contributing to the hike in spending is the fact that 32 percent of marketers plan to increase spending to expand to new search providers, especially if those providers offer qualified, targeted traffic.

The JupiterResearch survey also found that, while search marketing has traditionally been used for direct marketing purposes, more marketers are seeing the value of search for branding.

While generating immediate sales of online products is the goal of 37 percent of sophisticated search advertisers, 31 percent say building brand awareness is their main objective.

"Even smaller marketers would think that, 'If my competition has their name out there, I should too'," Ms. Satagopan said.

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