More marketers outsourcing search budgets: study

More brands are outsourcing portions of their search marketing budget in 2011, reversing a recent trend, according to SEMPO‘s “2011 State of Search Marketing Report,” released April 13.

More than four in 10 companies (44%) conduct their SEO entirely in-house, compared with 51% last year. Thirty-eight percent conduct their paid search in-house, compared with 47% in 2010, according to the survey of more than 900 companies conducted by Econsultancy.

“I believe it is indicative of the fact that there’s a lot of change happening faster than in prior years” said Marc Engelsman, VP of client programs and services at Digital Brand Expressions and member of SEMPO’s research committee. “Some of this may be budget related. Coming out of the recession, companies have more money to outsource, but I think they’re also looking at issues like the skills needed to keep up to stead with these various [mobile and local marketing changes] and also having the time to keep up.”

The search engine marketing industry grew to $16.6 billion in 2010, compared with $14.6 billion the previous year. It is projected to expand to $19.3 billion in 2011, according to the study.

Companies are emphasizing ROI because they are increasing their marketing spend, said Engelsman.

“I think what advertisers are doing by shifting to more outside resources is they’re looking for help in terms of optimizing their tactics for success,” he said. “It’s not enough just to drive traffic to the website. They’re looking to get conversions out of that traffic, to drive sales from that traffic.”

Engelsman added that because search marketing allows companies to better measure ROI, they are reallocating funds from their traditional marketing channels. More than half (53%) of the surveyed companies said they have shifted budgets from print advertising, and 29% said they have moved budget from direct mail.

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