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Presentation -- Forecasting Search Marketing Investments

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Search budgets rose 66% during the past five years, with some specific categories such as real estate and medical more than doubling. During that time, challenges such as an increase in churn rates …

Search budgets rose 66% during the past five years, with some specific categories such as real estate and medical more than doubling. During that time, challenges such as an increase in churn rates and price competition surfaced. Will the next five years seem as bright? Or, will the industry see a dip in spending? Can brands still reap rewards from spending more? Join Corey Elliott, Director of Research at Borrell Associates, as he provides insight into which marketers will put ad dollars where during the next five years.

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Corey Elliott, Director of Research, Borrell Associates

Published in: Marketing, Business, Technology

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  • 1. Tomorrow’s Media, Understood Today www.BorrellAssociates.com Predictive Power in Search Dollars April 28, 2014
  • 2. © 2014 Borrell Search – The world that was, and shall be… Pay-per-click advertising messages that include the purchase of keywords on sites such as Google, Yahoo, Ask.com, MSN, etc. Directory search type advertising is also included here. $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 $6,500 $7,000 $7,500 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Paid Search A Silver Lining Exists +66% -32% Source: Borrell Associates Inc., 2014 In millions
  • 3. © 2014 Borrell Borrell Associates – Tomorrow’s Media Understood Today Research marketing & advertising revenues & spending Consult on advertising strategy & tactics Focus on local spending – both offline & online Gather ad spending data from partners Collect sales data from 4,400+ local websites Conduct in-market surveys of business owners Blend in secondary research Release forecasts twice a year along with in-depth reports on verticals
  • 4. © 2014 Borrell Incredible Growth in Digital Spending $- $5,000 $10,000 $15,000 $20,000 $25,000 2008 2013 Audio Video Paid Search Display -Targeted email Display - ROS Variances of over $25 million were seen in: • Medical Professionals • Financial Services • Real Estate Services • Entertainment (general) • Restaurants And these all increased spend by over 75% Some categories actually decreased search spend: • Home Improvement • Travel Services In Search….. Source: Borrell Associates Inc., 2014 In millions
  • 5. © 2014 Borrell Although Search Grew, It Was Not Without Challenges 2009 study found 3 major disrupters: Long tail of SMB’s 60% churn rate among resellers Everyone jumping in (with varying degrees of skill) Study followed Yodle, ReachLocal, WebVisible, & Clickable
  • 6. © 2014 Borrell Today, Many Have Thrived, but… Yodle went from 250 employees, 5,000 customers, & $24 million in revenue to 1,100 employees, 40,000 customers and $160 million ReachLocal went from $200 million to $514 million WebVisible foreclosed in October 2011 Clickable was acquired by Syncapse in June 2012 What happened?
  • 7. © 2014 Borrell Evolve or….. SEM SEO DS
  • 8. © 2014 Borrell Cable TV Cinema Direct Mail Directories Radio Newspaper Online 25% Local TV Stations Other Print Out of Home Telemarketing 2013 Digital Advertising is Only Part of the Pie – A Very Sizeable One $- $5,000 $10,000 $15,000 $20,000 $25,000 2008 2013 Audio Video Paid Search Display -Targeted email Display - ROS Source: Borrell Associates Inc., 2014
  • 9. © 2014 Borrell Cable TV Cinema Direct Mail Directories Radio Newspaper Online 25% Local TV Stations Other Print Out of Home Telemarketing 2013 And Advertising is Only a Portion of What Companies Spend Promotions Advertising $207,958.30 $99,343.49 2013 Source: Borrell Associates Inc., 2014
  • 10. © 2014 Borrell Search May Fall 32% by 2018, but… There’s a Silver Lining Out There….
  • 11. © 2014 Borrell Digital Services is 4.5 Times Larger Than Digital Ad + Promotions Digital Services 82% Digital Advertising 12% Online Promotions 6% App Development Blog Management Digital Press Release Management Email List Purchasing Email Management Listings Claiming Online Ad Design Online Agency/Exchange Fees Online Consulting and Research Online Contest/Game Development Online Video Production Opt-in List Management Reputation Management Search Engine Optimization (SEO) Site Visitor Analytics Social Media Management Web Design/Maintenance Web Hosting Source: Borrell Associates Inc., 2014
  • 12. © 2014 Borrell Where The Money is in Raleigh, NC $71.9 $69.8 $30.4 $97.3 $157.6 $101.7 $23.7 $88.6 Other Print Direct Mail Cable TV Local TV Stations Newspaper Radio Reputation Mgmt SEO $828 million Advertising Market $1.8 BILLION Digital Services Market With a “B” Source: Borrell Associates Inc., 2014
  • 13. © 2014 Borrell Breaking Down That SEO Number…. Over $7.7 million spent by companies with under 250 employees Over $3.5 million spent by Banks Over $1.6 million spent by Restaurants Over $19 million spent by Hospitals & Health Care Over $1.5 million spent by companies with under 100 employees Source: Borrell Associates Inc., 2014
  • 14. © 2014 Borrell $1 out of $10 spent on Digital Services will be spent on SEO Not everything grows…. • Blog development • Email list purchases • Email management And some things go nuts…. • App Design +657% • Online Video Production +446% • Mobile Media Management +610% Overall, DSS grows by 57% ONLINE PUBLIC RELATIONS 7% ONLINE CONSULTING AND RESEARCH 8% WEB PRESENCE 49% ONLINE MARKETING SUPPORT 13% ONLNE AD PRODUCTION 23% 2018 Digital Services By 2018, the amount spent on SEO will have grown 52%
  • 15. © 2014 Borrell By 2018, SEO will be the main component of OMS ONLINE PUBLIC RELATIONS 7% ONLINE CONSULTING AND RESEARCH 8% WEB PRESENCE 49% ONLINE MARKETING SUPPORT 13% ONLNE AD PRODUCTION 23% WEB PRESENCE  Website Design/Maintenance  Web Hosting  Online Advertising Management  Mobile Media Management  Social Media Management ONLINE PUBLIC RELATIONS  E-mail Management  Digital Press Release Distribution  Reputation Management  Opt-in List Management ONLINE MARKETING SUPPORT  SEO  Blog Development  Site Visitor Analysis  E-mail List Purchase  Listings Claiming (Pay Per Call, Call Tracking) ONLNE AD PRODUCTION  Online Agency/Exchange Fees  Display Ad Design  App Design  Online Contest/Game Development  Online Video Production ONLINE CONSULTING AND RESEARCH $708 Billion 2018 Digital Services
  • 16. © 2014 Borrell One Thing We Know About the Future is…it’s Unknown • What could impact these projections? • Aggressive Media Companies • Selling SEO with 95% of the front-line sales people • Other players – web.com, VistaPrint, Hubspot • Large number of SMB’s buying; then upselling them • Nature of “search” itself • Boundaries of intuitive search • Rules of the game • Penguin, Panda, Hummingbird, ???
  • 17. © 2014 Borrell In Conclusion… • Paid search rose, will peak in 2014, then fall off • SEO will continue to grow – and grow strong • Advertising is one piece of the pie…. • Promotions is another, bigger piece…. • But the majority of the pie going forward belongs to Digital Services • More than 3 out of every 4 digital dollars spent by a company on these three areas will go to Digital Services
  • 18. Tomorrow’s Media, Understood Today www.BorrellAssociates.com Thank you! This presentation will be available at: www.borrellassociates.com/2014sis