The State of Search Marketing Report 2012, produced by Econsultancy in association with SEMPO, looks in-depth at how companies are using paid search, search engine optimization (natural search) and social media marketing. The findings cover spending, current challenges, use of specific search engines and emerging trends across paid search, SEO and social media.

1. Market Data / Supplier Selection /
Event Presentations / User Experience
Benchmarking / Best Practice /
Template Files / Trends & Innovation

SAMPLE: State of Search
Marketing Report 2012
in association with SEMPO
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2. SAMPLE: State
of Search
Marketing
Report 2012
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3. Contents
1. Executive Summary and Highlights ............................. 5
2. Introduction by SEMPO................................................ 9
3. Methodology and Sample............................................ 10
3.1. Methodology ............................................................................. 10
3.2. Respondent profiles .................................................................. 10
4. Findings ........................................................................ 11
4.1. Significance of different trends and technologies ...................... 11
4.2. Factors in new channel adoption ............................................... 13
SEO, Paid Search, and Social Media ............................................................14
4.3. Objectives and metrics...............................................................14
4.3.1. Ability to calculate ROI ....................................................................14
4.3.2. Objectives for search engine optimization ..................................... 15
4.3.3. Objectives for paid search................................................................16
4.3.4. Objectives for social media marketing ........................................... 17
4.3.5. Metrics for measuring search engine optimization ...................... 18
4.3.6. Metrics for measuring paid search marketing .............................. 20
4.3.7. Metrics for measuring social media marketing ............................ 22
4.4. Budgets ..................................................................................... 24
4.4.1. Direction of digital marketing budgets .......................................... 24
4.4.2. Budget for search engine optimization in 2012 ............................ 25
4.4.3. Change in budgets for search engine optimization ...................... 26
4.4.4. Expected search engine optimization billings .............................. 28
4.4.5. Budget for paid search in 2012 ...................................................... 29
4.4.6. Change in budgets for paid search ..................................................31
4.4.7. Flexibility in paid search budgeting............................................... 33
4.4.8. Expected paid search billings ......................................................... 34
4.4.9. Proportion paid to SEM service providers .................................... 35
4.4.10. Budget for social media marketing in 2012 ............................... 37
4.4.11. Change in social media spend..................................................... 38
4.4.12. Expected social media billings .................................................... 40
4.5. Search engines ...........................................................................41
4.5.1. Web properties used for PPC advertising ......................................41
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4. 4.5.2. Change in investment in search engines ....................................... 42
4.5.3. Return on investment from search engines .................................. 44
4.6. Social media and search marketing alignment ......................... 46
4.6.1. Use of social and search marketing activity .................................. 46
4.6.2. Impact of social media on search marketing ................................ 48
4.6.3. Use of social media sites ................................................................. 50
4.7. Resourcing and outsourcing ..................................................... 52
4.7.1. Employees with responsibility for search engine marketing ....... 52
4.7.2. Search engine optimization service provision .............................. 53
4.7.3. Paid search marketing service provision ....................................... 54
4.7.4. Social media marketing service provision ..................................... 55
4.7.5. Use of technology for paid search .................................................. 56
4.7.6. Use of technology for paid search .................................................. 57
4.7.7. Typical fee structure for search engine optimization ................... 58
4.7.8. Typical fee structure for paid search marketing ........................... 59
4.7.9. Typical fee structure for social media marketing ......................... 60
4.7.10. Challenges for managing search engine optimization ...............61
4.7.11. Challenges for managing paid search marketing ...................... 62
4.7.12. Challenges for managing social media marketing .................... 63
5. Appendix: Respondent Profiles .................................. 64
5.1. Respondent titles ...................................................................... 64
5.2. Business sector ......................................................................... 65
5.3. Business focus .......................................................................... 66
5.4. Marketing channel usage by organization type ........................ 67
5.5. Type of organization ................................................................. 68
5.6. Type of agency .......................................................................... 69
5.7. Geography ................................................................................ 70
5.8. Size of company by revenue ....................................................... 71
5.9. Size of company by number of employees ................................ 72
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5. 1. Executive Summary and Highlights
The SEMPO State of Search Marketing Report 2012, published by Econsultancy for the third
year running, is based on a global online survey of nearly 900 companies and agencies. This year’s
SEMPO study – now in its eighth year – is an aggregation of information provided by organizations
from 49 different countries, and from marketers across a range of business sectors and types of
agencies.
Market valuation
SEMPO and Econsultancy estimate that the North American search engine marketing industry1 will
reach a value of nearly $23B by the end of 2012, having grown by nearly 19%, up from $19.3B in 2011.
This is the second straight year when SEM has managed to increase its growth rate from the
doldrums of 2009 when growth reached a low of 8%.
Value of the North American Search Industry 2004 - 2013
30 (in billions of US dollars)
26.8
25 22.9
19.3
20
16.6
14.6
15 13.5
12.2
9.5
10
5.8
5 4.1
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Partial Projected
Year
Taking advantage of mid-year data, we’re also able to provide a preliminary estimate for 2013, when
we expect growth to be approximately 17%. While this represents a reduction in the pace of growth, it
will likely still represent the highest rate of increase of any significant marketing channel offline or
online (mobile and social will no doubt grow more quickly, for example, but at far lower budget
levels.)
1This valuation includes money spent on paid search marketing and search engine optimization (natural
search), and also spending on search engine marketing technology. It excludes social media marketing
spending, except for money spent with social networks on PPC advertising.
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6. Key findings
 Changes to the Google algorithm affected a large percentage of marketers, or at least has
them concerned. 87% call the updates of the last 12-18 months “significant or highly significant.”
In most cases marketers feel the overall effect to be positive, but success in combating SEO spam
sites has come at the expense of many legitimate brands.
Sample only, please download the full report from:
http://econsultancy.com/reports/state-of-search
Related Econsultancy reports and content
SEO Trends: Issues and Opportunities
http://econsultancy.com/reports/seo-trends-issues-and-opportunities
Search Engine Optimization Best Practice Guide
http://econsultancy.com/reports/search-engine-optimization-seo-best-practice-guide
Paid Search Marketing Best Practice Guide
http://econsultancy.com/reports/paid-search-marketing-ppc-best-practice-guide
Search Engine Marketing: SEO - Digital Template files
http://econsultancy.com/reports/search-engine-marketing-seo-digital-marketing-template-files
Search Engine Marketing: Paid Search – Digital Template files
http://econsultancy.com/reports/search-engine-marketing-ppc-digital-marketing-template-files
SAMPLE: State of Search Marketing Report 2012 Page 7
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7. 2. Methodology and Sample
2.1. Methodology
The State of Search Marketing Report is based on an online survey of nearly 900 client-side
(advertisers) and agency respondents. The survey was live between March 12th and May 15th 2012.
SEMPO and Econsultancy promoted the survey to their respective members, offering a
complimentary copy of this report as the incentive for taking part.
We would like to thank those who took the time to complete the questionnaire, and also SEMPO
members who promoted the survey to their clients. If you have any questions about the research and
methodology, please contact us via email at Research [at] Econsultancy.com.
2.2. Respondent profiles
A total of 883 respondents from 36 countries took part in the survey, with US-based respondents
accounting for 64% of the total. The sample included 272 advertisers and 611 supply-side respondents
(mainly agencies) carrying out search marketing and social media activity on behalf of clients. For
many questions, analysis of the two groups has been separated; the distinction is abbreviated to
‘companies’ (including not-for-profit organizations) and ‘agencies’.
For a detailed profile of this year’s respondents, see Section 5.
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8. 3. Findings
3.1. Significance of different trends and technologies
The explosion of mobile internet usage continues to be the trend most concerning search marketers;
88% rate the trend as significant or highly significant. No industry or category is immune, and few
companies are happy with their mobile usability or analytics. As search becomes something used by
mobile, social people in specific but changing locations, techniques that were calibrated towards
individuals sitting at a desk are gradually being outmoded.
Companies
Figure 1: In the context of your search marketing efforts, how would you describe the
impact of the following trends and technologies?
100%
13% 13%
29% 26% 30%
80% 41% 39%
41% 63%
60% 48%
44% 49% 47%
30% 38%
40%
47% 29%
20% 39%
29% 27% 25% 23% 22%
8%
0%
Highly significant Significant Not significant
Respondents: 272
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9. Agencies, with a broader focus than individual companies, are somewhat more concerned with the
rise of local search, but in general recognize the same set of priorities at similar levels.
Agencies
Figure 2: In the context of your search marketing efforts, how would you describe
the impact of the following trends and technologies?
100%
8% 13% 15% 17% 22% 22% 24%
80%
37% 55%
42% 42%
60% 50% 45%
50% 50%
40%
55% 37%
20% 45% 44%
33% 33% 28% 26%
9%
0%
Highly significant Significant Not significant
Respondents: 611
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10. SEO, Paid Search, and Social Media
3.2. Objectives and metrics
3.2.1. Ability to calculate ROI
Companies
Figure 3: How would you rate your organization’s ability to evaluate the return on
investment for the following marketing channels?
100% 3%
10% 11%
15%
18% 25%
80% 40%
34%
37% 45%
60%
38%
40% 79% 45%
57%
47% 44%
20% 37%
15%
0%
Good Okay Poor
Respondents: 270
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11. 3.3. Budgets
3.3.1. Direction of digital marketing budgets
Companies
Figure 4: Change in digital marketing budgets 2012 – 2013
60%
51% 49%
50%
40% 37%
30% 26%
20% 16%
10%
10%
5%
2% 2% 2%
0% 0%
0%
Significant Some growth No change Some Significant No investment
growth decrease decrease
2012 2013 Projected
Respondents: 327
While marketing and advertising budgets in general have been in a state of decline or at least flux,
digital has managed to maintain its growth. After more modest gains over the last several years, the
incline appears to be steepening. The percentage of respondents expecting “significant” growth in
2013 is a full 50% higher than those evaluating the current year.
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12. 3.4. Search engines
3.4.1. Web properties used for PPC advertising
The chart below underlines the unsurprising prominence of Google, with the vast majority of
responding advertisers saying they run PPC campaigns throughout Google’s search and content
environment.
Companies
Figure 5: On which of the following web properties do you run PPC campaigns?
98% 97%
100%
86% 85%
80% 74% 74% 73% 73% 74%
70%
65%
60% 56%
40% 33%
24%
18% 17%
20% 15%
10% 10% 10%
8%
N/A
0%
2011 2012
Respondents: 264
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13. 3.5. Social media and search marketing alignment
3.5.1. Use of social and search marketing activity
Companies
Figure 6: What best describes your use of social media in the context of your search
engine marketing activity?
80%
58% 60%
60%
49%
40%
33% 33%
29%
20% 18%
13%
7%
0%
Social media is very much We treat social media and We don't do any social media
part of our search activity search engine marketing marketing
separately
2010 2011 2012
Respondents 2010: 389 | Respondents 2011: 245 | Respondents 2012: 218
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14. 3.6. Resourcing and outsourcing
3.6.1. Employees with responsibility for search engine marketing
The teams devoted to search continue to grow, as do search budgets and the percentage of companies
managing some or all of their programs in-house.
Companies
Figure 7: How many people inside your organization have any responsibility for
search engine marketing?
40%
32%
30%
29% 30%
24%
21%
20%
16%
16% 16%
15%
13%
11%
9%
8%7%
7% 7%
5%
2%
1%
0%
0%
0 1 2 3 4 5-10 More than
10
2010 2011 2012
Respondents 2010: 396 | Respondents 2011: 246 | Respondents 2012: 182
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15. 4. Appendix: Respondent Profiles
4.1. Respondent titles
Figure 8: What is your title?
35%
30% 29%
25%
22%
20% 18%
14%
15%
12%
10%
6%
5%
0%
Analyst Manager Director VP C Level Other (please
specify)
Respondents: 718
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16. 4.2. Business sector
The three best represented sectors in our survey this year were retail trade, high tech, and business
or personal services.
Figure 9: In which business sector is your organization?
40%
28%
24%
20%
14%
9% 8%
6% 5%
4%
2% 1% 0
0%
Respondents: 241
Sample only, please download the full report from:
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