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SEMPO: Advertisers Use Search for Branding

A survey of search engine advertisers found that the No. 1 objective for their search marketing programs is building brand awareness, rather than generating sales.

In the survey, carried out by the Search Engine Marketing Professionals Organization, 61 percent of respondents said increasing brand awareness of products was an objective of their paid placement campaigns. The response narrowly beat sales and lead generation. The survey, conducted by IntelliSurvey, polled 288 search advertisers and agencies.

Consulting shop Executive Summary compiled the report. It said the entire search market — including paid placement, search optimization and search marketing consultation — will generate $4 billion in 2004. Of that spending, paid placement will account for $3.3 billion, or 82 percent. The report estimates search marketing agencies will bill $380.4 million in sales in 2004. The rest of the spending consists of in-house SEO and SEM spending and the leasing of search marketing technology.

Paid placement, which includes paid search and paid inclusion, merits the most attention from businesses: 77 percent said they used paid placement, and the majority have used it for at least three years. Respondents said paid placement made up 87 percent of their search budgets.

The rising price of keywords has not affected paid placement spending. Only 23 percent of marketers said they could not tolerate further increases. On average, advertisers said they could handle price increases of 33 percent while still maintaining positive return. Jupiter Research forecasts click prices will rise 31 percent in 2005.

Google chief financial officer George Reyes recently told an investor conference that he thinks keyword prices are undervalued. Since Google and rival Overture operate auctions for paid placement listings, the prices are purely market driven.

Despite the increasing complexity of search marketing, 52 percent of businesses said they would manage their entire paid placement program internally in 2005. Just 8 percent said they would rely on an SEM agency to handle all paid placement spending. On average, respondents plan to increase spending on search advertising by 39 percent in 2005.

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