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Search Engine
Marketing Trends
BY: Itai
Levitan
Search engine marketing is on constant evolution
The world of search engine marketing is in constant evolution. With
increase in the number of search engines and evolution in the techniques
and technologies used, search engine marketing is becoming a tool
industries cannot afford to do without. Trends all over the world
show that the pressure for search engine marketing services is starting
to come from below for the individual clients and organizations
themselves. Indeed, search engine marketing is quickly evolving
as the buzz word in a new, technology-driven advertising and marketing
space. As a result, companies that are serious about their online
marketing are incorporating search marketing into their branding
and direct response marketing efforts.
Meet the search engines
Google, Yahoo, MSN are the search engine big boys, with Google being
the strongest. AOL, Ask Jeeves and Altavista lead the SEM scenes,
while a number of other geographically-specific and market-specific
search engines are also successful. In a study conducted in July
2005, Nielson/Netratings reported that the search engine marketing
share was highest for Google at 48%. Yahoo and MSN had the market
shares of 22% and 12% respectively.
MSN and Google were also the top destinations for most online purchases,
reported a study conducted by comScore Networks (June 2005). The
study highlighted that in, MSN searchers were 48% more likely to
buy online than the average Internet user. Google users were 42%
more likely to buy online than the average Internet user. It also
came to notice that while Google searches looked for more sophisticated
search terms, simple broad term searches occurred for AOL, Yahoo
and MSN. Demographically, more men searched on Google at 55.1% while
AOL was female dominated at 52%.
Search engine marketing - another bubble?
One thing is becoming clearer today: Search engine advertising is
not another Internet bubble, even if certain shares may be trading
higher than they should. It is not only happening in the Silicon
Valley either. It is driven by users and the fact that people, everywhere,
need to go somewhere to search and find information. Take China
for example - who's heard of Baidu.com? Not too many people. It's
a Chinese search engine that has been around for 5 years and is
the World's 6th most-visited Internet site, thanks to China's fast
growing internet market, currently with more just over 100 million
Web surfers. Baidu is approaching an IPO and according to eNet.com.cn,
a Chinese news site, will list on the NASDAQ on August 4, planning
to 3.7 million shares of stock at between US$19 and $21 per share.
And what about Google? It recently reported quarterly revenues of
$1.4 billion. Google's revenues excluding its payments for other
websites in its advertising network jumped to $890m, an increase
of 110 per cent from a year before and above the expected $842 Million.
"Business is very good here at Google," said Google CEO,
Eric Schmidt.
Search engine marketing forecast
US Online Marketing Forecast: 2005 To 2010 by Forrester Research
(May 2005) revealed that the arena for search engine marketing is
all set to rise and will show growth of 33% in 2005. Forecasts reveal
that the figures will reach $11.6 billion by 2010. Display advertising,
which includes traditional banners and sponsorships, will grow at
the average rate of 11 percent over the next five years to $8 billion
by 2010. Total spend on US online advertising and marketing will
reach $14.7 billion in 2005, a 23 percent increase over 2004. Trends
also showed that while SEM is set to become more effective than
traditional marketing channels, barriers include a lack of online
advertising standards and hands on experience that prevent marketers
from embracing them fully.
Search engine marketing in Europe
Search engine marketing (SEM) trends in Europe reveal a positive
picture too. A study conducted by Forrester Research, entitled Europes
Search Engine Marketing Forecast, 20042010, predicts
that by 2010, European marketers will spend almost 3 Billion Euro
on search marketing. This will be a rise from EU856 million in 2004.
Research also shows that SEM is set to increase by 65% in 2005 with
EU1.4bn being spent on sponsored links and search engine optimization
(SEO). This growth spurt may however cool down to a simmer by 2007
as rich media ads begin to dominate the Internet marketing landscape.
The UK continues to be the largest online ad market in Europe with
SEM forecast to grow to over EU1bn in 2010, up from EU763m at the
end of 2005. France is the biggest growth market with 19% of search
marketing spend by the end of 2005 and 31% by 2010. Germany follows
second with a spend of EU165m in 2004. However spending in Germany
will slow down and reach EU399m in 2010 from EU165m in 2004. Growth
will be lead by marketers in the travel, finance, auto, and retail
sectors.
Search engine traffic is only a means to an end
Besides all these big numbers and back to the customers, it is important
to note that for advertisers, search engine traffic is, typically,
only a means and not an end. Lots of targeted traffic from active
users in real time is great only if users perform the target action/s
of the website (e.g. fill out the contact form, download the demo,
register to the newsletter, complete the purchase online, make a
comment with the forum, etc.). The few companies that are already
engaging in search engine marketing at a professional level know
this well and are putting in significant efforts in integrating
conversion rate improvement mechanisms and work processes into their
web marketing efforts. Surprisingly or not, there are too many times
where marketing managers do not know if one channel generated a
higher return on investment (ROI) than the other. Furthermore, they
usually dont know how to measure their channel-specific cost
per action (CPA) or cost per customer acquisition. The leading companies
in the web marketing space have already learned that it is more
efficient and ROI-effective to identify how to raise an existing
conversion rate from, say, 2% to 4%, rather than paying to buy 100%
more incoming traffic.
About the Author
Managing partner at EasyNet, an innovative search engine marketing
firm. An experienced Internet marketing specialist with 8 years
of hands-on multidisciplinary experience in the Web arena. Itai
is a former software engineer with a BA in Computer Science and
4 years of software development experience online. An MBA graduate,
Itai is a dedicated entrepreneur who is passionate about people,
team work and Web marketing.
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