Web Marketing Strategy Update

MarketingSherpa has released their 2nd Annual Search Marketing Benchmark report. 3,271 search marketers provided real-life results data for the survey, making it the biggest SEM study respondent base ever.

The new report includes:

• New stats on clicks, costs, conversions (and fraud)
• Which SEM tests work and which don’t
• Differences between agency-side vs in-house SEM results (Should you hire an agency or do it yourself?)
• How much marketers are budgeting for SEM for 2006 (breaks out b-to-b vs b-to-c)

Some excerpts:

Only 34% of 3,007 active search marketers that MarketingSherpa surveyed in July 2004 said their PPC ad results were “very good.” 13 months later, 43% of 3,271 surveyed MarketingSherpa readers said PPC ad results were “very effective” — a nine-point jump.

Search optimization (SEO) campaign satisfaction didn’t fare nearly as well. Last year 31% of surveyed marketers said SEO results were very good. This year 33% say SEO is very effective. It’s a gain, but only two points.

Even then, SEO came out far ahead of non-search tactics such as email marketing (25% “very effective” rate) and affiliate marketing (22% “very effective” rate).

Overall survey results on clicks, costs, conversions … and fraud (stats are broken down in useful detail by marketer-type and search engine in the Benchmark Guide):

                                                 2004     2005
PPC Clickthrough Rate     3.0%     2.6%
Google Cost per Click      $1.29     $1.61
Conversion PPC                 6.6%     3.6%
Conversion SEO                 6.1%     4.2%

MarketingSherpa didn’t ask about click fraud last year, but this year only 7% of marketers said it was a “big problem already.”

Average number of keywords surveyed marketers said they were conducting PPC campaigns under per month:

Sept 2004 keywords 9,100
March 2005 keywords 14,700
Sept 2005 keywords 17,314

That’s an overall 90% increase in campaigns over the past 12 months. This means marketers are spreading their budgets far more broadly than they had in the past.

What’s the best way to discover new search terms?
48% of agencies said segmenting website log files looking for highly converting keywords produces “great ROI.”

The top three testing tactics in-house search marketers said work well:

#1. Landing page copy 89%
#2. Text ad headlines 87%
#3. Text ad body copy 82%

What’s not worth testing?
14% of marketers said local search ads “work but are not worth the effort.”

26% of in-house marketers say daypart and weekpart testing (where you only allow your campaign to appear on “best” hours or days of the week) isn’t worth the work.

A huge number of marketers are not testing second tier PPC search campaigns — basically anything outside of Google’s AdWords and Yahoo/Overture. Depending on the specific engine, anywhere from 50-83% of marketers had never run a single test on them.

Agencies overall prefer to test a variety of campaign factors more than in-house marketers do. On one hand, they have more time to focus on search tests, on the other hand they also need to find ways to justify their fees.

Overall site traffic lift six months after optimization:

Agency optimized 110% increase
In-house optimized 38% increase

On the PPC side, agencies also reported higher results in terms of campaign effectiveness. One reason may be the fact that agencies were far more likely to aggressively measure results and tweak campaigns based on data. For example, only 35% of marketers were tracking delayed online conversions while 50% of agencies were.

For more data on search, including special reports on affiliate SEM, b-to-b search, and all-new eyetracking “heatmap” studies of top engines,
get your own copy of MarketingSherpa’s entire 2005-2006 Search Benchmark Guide