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Search Marketing 2006: Facts & Figures

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If you're looking for hard data about the world of search engine marketing, arguably the best single source of metrics is MarketingSherpa's annual "Benchmark Guide."

The 2007 edition of the Benchmark Guide, which costs $247, came out recently and we've wanted to cover it for some time. The document is 250 pages, including 185 charts and capsule analyses that track almost every imaginable topic in both natural and paid search. The voluminous data in the report are drawn from all the usual suspects, including Pew, OneStat, Compete, Inc., comScore, Nielsen, Hitwise and dozens of other major sources, as well as MarketingSherpa's own proprietary surveys.

The report doesn't merely summarize high-level statistics put out in press releases but collects empirical information directly from the various included sources to offer detailed and, often, actionable information to marketers (its target audience). But the document is also a valuable reference for publishers, researchers, journalists/bloggers and those who want to get up to speed on the state of search generally.

Enough with the preamble—what does the report actually contain? There's such a diverse and dizzying array of statistics and data in the report I decided to summarize each of the six chapters and point out some highlights.

Chapter 1, "The Business of Search," contains 22 charts and tables on the business and structure of the SEM industry. It has a number of graphs on how much of marketers' budget allocation goes to search (both B2B and B2C). There are also data on relative spending levels regarding SEO and SEM. MarketingSherpa's own research reflects, interestingly, that the larger the marketing budget (B2C companies) the smaller the percentage spent online. They also found that high-volume keyword buyers were targeting significant spending increases in the "2nd tier engines" in the coming year.

Chapter 2, "Search Marketing - Special Reports," covers a range of issues surrounding click fraud and marketers' perceptions of how serious it is. Local search and pay-per-phone-call (PPCall) are covered in this chapter, including case studies. Vertical search, blogs, SEO and PR and shopping engines are all tackled here too. And the performance of marketing campaigns conducted on the "2nd tier" engines is also addressed.

Among the more interesting data in the report are full-color heatmaps that compare how users literally view results on search engines and shopping search engines. Several are found in this chapter as well as the Appendix (more on that below).

Chapter 3, "Top Search Properties," features 35 charts and tables on search market share data in the U.S., Europe and Asia among the top engines. There are also data on marketers' and SEMs' satisfaction levels with the different engines (hint: they correspond pretty directly to market share).

One of the more interesting graphs tracks Ask's spending on consumer marketing and its impact on Ask's traffic. As Ask sharply increased ad spending, it saw gains in traffic; but when that spending declined so did traffic. It shows that advertising works to gain awareness and usage, but has limitations in terms of long-term consumer acquisition. This chapter also offers fairly detailed user demographics for each of the major search engines.

Chapter 4, "Search Tactics and Measurement," tackles ROI issues, campaign tracking and search-marketing tactics. This section arguably has the most "actionable" information for search marketers. It discusses the relative performance of different online marketing strategies at a high level, as well as at a granular level (e.g., landing page elements, copy points).

Comparing different tactical approaches, the data reflect the performance of demographic, behavioral and contextual targeting, as well as local search and pay-per-call. In that context, broad match and demographic targeting had the highest ROI ratings according to marketers.

The chapter includes discussion of keyword price inflation and how marketers are responding at a practical level to increasing search costs. Another interesting discussion involves charts showing marketers' ratings for emerging search features and capabilities (e.g., local, mobile, vertical, social). Local and social search are among those generating the most interest among marketers.

Chapter 5, "Search Benchmarking Data," offers more in-depth information on keyword prices and volumes, click-throughs and conversion rates. This chapter compares keyword prices (B2B and B2C) among the top engines as well as the "2nd tier." There are also data comparing conversion rates (SEO vs. SEM) by campaign goal (i.e., registration, e-commerce transaction, offline conversion, etc.). One of the interesting findings here is that paid listings convert higher on average (4.19%) than SEO (3.92%). That discrepancy is even more pronounced where "offline conversion" is the campaign goal, which is somewhat counterintuitive.

Chapter, 6 "How We Search & Shop," captures a broad range of consumer search behavior, demographic information, privacy issues and related consumer perceptions of search and shopping sites. Findings in this chapter include the fact that search strings are not getting substantially longer, with the majority of search queries (68%) at three words or fewer.

Another interesting piece of data is that all of the top 10 general search and shopping-oriented search queries are navigational rather than category or "generic" searches. Also in this chapter are data on how deeply users delve into search results - 63% look at one page or less of search results. Charts in this chapter also track where search falls in the consideration cycle and shopping process. A significant included finding is: despite the Internet's centrality in the product research process, the bulk of consumer purchases are offline (68%).

The Appendix, "Search Marketing Eyetracking Study," shows visual, heatmaps for the top four search engines (Google, Yahoo, MSN, AOL) and top three shopping sites (BizRate/Shoppzilla, NexTag and Shopping.com). While many people are familiar now with eyetracking and heatmaps, this material is among the most interesting in the report and has direct UI implications for publishers and marketers.
I've really only been able to casually touch on the mountain of data in the guide in summarizing what the chapters contain. For those who have a professional need for this kind of information or who are just simply interested it's an excellent resource.

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