Search draws funds from other channels

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The growth of search marketing is continuing unabated. North American spending on search engine marketing last year totaled $9.40 billion, according to the Search Engine Marketing Professional Organization's annual "State of Search Engine Marketing" report, released in April. In 2005, the figure was $5.75 billion, or a 63.5% increase.

Paid search accounted for 86% of search marketing spending. Search engine optimization, also known as organic search, accounted for 12%, and paid inclusion accounted for 1%.

As the medium continues to mature, search marketing is drawing budget dollars away from other marketing channels, particularly offline channels, according to SEMPO. This is a change from 2005, when funds were shifted mostly from online media.

Twenty percent of advertisers surveyed by SEMPO said they are shifting money to search from print magazine ads; 16% are shifting direct mail dollars; 13% are shifting TV spot dollars; and 13% are moving funds from the print newspaper ad budget.

Beyond the shift, advertisers are also devoting bigger budgets to search. Twenty-eight percent of advertisers with revenue of $50 million or more will increase search spending by between 11% and 25% this year, according to Jupiter Research in a report released in April. That report, which polled 794 search marketers and 272 search agencies in February regarding their plans, also found that more than 60% of search marketers are satisfied with the return on investment on search spending; only 13% said they were dissatisfied with search marketing's ROI.

Not only are marketers happy with search, the tactic is increasingly on the radar of C-level executives. The Jupiter survey found 43% of search advertisers said their CEO regularly receives a report on search marketing campaigns, surpassing even directors of marketing (42%) as the most frequent recipients of such reports.

Executives are keen on search because of its perceived ability to convert searchers to engaged customers.

Patricia Hursh, president and founder of SmartSearch Marketing, recommends four ways to improve post-click conversion once searchers arrive at the home page or microsite. She suggests starting with choosing key words that map to the different job roles of visitors to the Web site. "Don't stop once you've chosen keywords appropriate for each of those constituencies," Hursh said. "Assess each visitor's needs and map them to the right content, based on where they are in the buying cycle." Hursh also said giving visitors a choice and offering several valuable assets—things they can download, a virtual tour or a Webinar—increases the overall lead-rate.

Hursh said not to overlook the little things, such as page layout, use of images and action triggers. "These are all details to pay attention to, monitor and change as necessary," she said.

For example, calling a downloadable asset "Virtual Tour" rather than "Product Overview" may greatly increase conversion, Hursh said. "You constantly need to change, measure, and adjust these elements in the same way you change, measure and adjust your keyword strategy."

"More `verticalization' is coming," said Greg Sterling, analyst and principal of Sterling Market Intelligence, an Internet advertising research and consulting firm. "Verticals have started to compete with Google and Yahoo and the other major engines, because those engines have begun to offer vertical themselves."

The vertical sites are seeing healthy growth.—the top business- specific search site, according to comScore Networks' data—has seen a 48% increase in unique visitors to its site since the beginning of the year.'s ad network, which includes its own network and as those of partners—such as, as well as sites operated by BusinessWeek, Financial Times and The Wall Street Journal—reaches more than 30 million unique business users per month.

"What we're starting to see is as people become more accustomed to using the Internet for business purposes, they're looking for tools that are designed specifically for business," said Jake Winebaum, CEO and founder. "We're already pretty large," he said. "For us to grow that much at this stage is as much a market phenomenon as it is improving the experience." Other growing vertical engines include Globalspec, in the engineering sector, and Healthline, in the health care sector.

Brad Bauer, senior director of business development at online marketing services and analytics consultancy ClearGauge, said one theory for the growth is that conversions are often better on vertical sites. "Getting vertical makes a lot of sense," he said, during a panel discussion on b-to-b search at the Search Engine Strategies Conference in New York in April. Bauer said that unconverted clicks from broad-based search engines are not useful for marketers. For one b-to-b client, he said, "Google drove more than twice the clicks, but drove more conversions."

There are new entrants, too. Take ZoomInfo, which recently launched a free, advertising-supported version of its business information search engine. ZoomInfo is a so-called semantic search engine that crawls the Web—millions of corporate sites, press releases, electronic news services, SEC filing and other online business sources—and tags, aggregates and organizes the information into search profiles for business users who are searching for information on people, companies, products and services and industries

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