SAMPLE: UK Search Engine Marketing Benchmark Report 2009
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1 Market Data / Supplier Selection / Event Presentations / User Experience Benchmarking / Best Practice / Template Files / SAMPLE: UK Search Engine Marketing Benchmark Report 2009 in association with Guava.co.uk SAMPLE only: please download the full report from:
2 SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Published - April 2009 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright Econsultancy.com Ltd 2009 Econsultancy London 2nd Floor, 85 Clerkenwell Road London EC1R 5AR United Kingdom Telephone: +44 (0) help@econsultancy.com Econsultancy New York 41 East 11th St., 11th Floor New York, NY United States Telephone:
3 Contents 1. About Econsultancy About Guava Executive Summary and Highlights Key findings Other highlights Type of search activities and search services Search budget Search planning and issues Introduction by Guava Methodology and Sample Methodology Respondent profiles Company or agency marketer? Annual company turnover Business sector Geography Findings Type of search activity and search services What type of search activity (SEO / paid search)? Main agency focus (SEO and / or paid search)? Is search marketing done in-house or by agency? Plans to keep or change status quo (in-house or agency) Paid search services (supply and demand) SEO services (supply and demand) Multi-lingual and multi-territory search campaigns Countries and regions Search budget SEO budget Paid search budget Social media marketing budget Agency perspective on budgets Annual change in digital marketing budgets Annual change in paid search budgets UK Search Engine Marketing Benchmark Report 2009 in association with Guava.co.uk
4 Annual change in SEO budgets Annual change in social media budgets Objectives and effectiveness Primary objectives from paid search Primary objectives from SEO Primary objectives from social media marketing Impact on brand Tracking ROI from paid search Tracking ROI from SEO Tracking ROI from social media marketing Effectiveness of ROI tracking Effectiveness of social media campaigns Annual change in ROI Factors impacting ROI from paid search Issues affecting ROI from SEO and paid search Search Engines Search engines used for paid search Effectiveness of particular search engines Search planning and issues Social media sites Barriers to successful paid search campaigns Barriers to effective SEO UK Search Engine Marketing Benchmark Report 2009 in association with Guava.co.uk
5 1. About Econsultancy Econsultancy is the leading source of independent advice and insight on digital marketing and e- commerce. Our reports, events, online resources and training programmes help a community of over 80,000 registered marketers make better decisions, build business cases, find the best suppliers, look smart in meetings and accelerate their careers. Econsultancy is an award-winning online publisher of reports covering best practice, user experience benchmarking, market data, trends and innovation, and supplier selection aimed at internet professionals that want practical advice on all aspects of e-business. Econsultancy also operates a highly popular training division, used by some of the world s most prominent brands for staff education, both in-house and via public courses. We provide training across all areas of digital marketing and at all levels from one day courses to diplomas to Masters in Digital Marketing. In addition, we host more than 100 conferences and events a year, such as The Online Marketing Masterclass, regular Supplier Showcases and Roundtables, an annual Future of Digital Marketing event, Digital Cream and a range of social events. The Econsultancy site now attracts 175,000 unique users per month where they access research, read the blog and take part in discussions in the forums. And as a portal to the digital marketing community, Econsultancy members can also link up with other members and digital suppliers through our directories, as well as find a new job or new digital talent using the job listings. Some of Econsultancy s client-side members include: Google, Yahoo, MSN, MySpace, BBC, BT, Shell, Vodafone, Yell.com, Dell, Oxfam, Virgin Atlantic, TUI, Barclays, Carphone Warehouse, IPC Media, Deloitte, T-Mobile and Estée Lauder. Join Econsultancy today to learn what s happening in digital marketing and what works. Call us to find out more on +44 (0) or contact us online. SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 1
6 2. About Guava Guava, the sponsor of this research, is a digital marketing agency with over 150 employees in Denmark, Sweden and the United Kingdom. Guava specialises in enterprise Search Engine Optimisation, advanced Pay Per Click management, analytics consultancy and web development in the UK. Its rapidly expanding team is dedicated to providing top quality services to those companies serious about their search marketing success online. Guava is a Google Enterprise Professional Partner, Google Adwords Qualified company and a Google Analytics Authorised Consultant. Current Guava clients include Confused.com, Black & Decker, CNET, Mars Drinks and the Royal Mail. For more information about the search engine marketing services provided by Guava, please contact Martin Dinham on or uk@guava.com SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 2
7 3. Executive Summary and Highlights This is the third annual UK Search Engine Marketing Benchmark Report published by Econsultancy in association with Guava. There were more than 800 respondents to our 2009 research request, which took the form of an online survey in February and March The research covers paid search, search engine optimisation (SEO) and social media marketing. Respondents included both client-side (in-house) search marketers and supply-side respondents (including agencies and consultants) Key findings Company respondents were asked whether they expect budgets to increase or decrease over the next 12 months across a range of digital marketing channels. Search engine optimisation is the area where companies are most likely to be investing more money, with 55% of respondents expecting an increase in their budget. Just under a third of respondents (31%) say that SEO spending will stay the same and only 6% say there will be decreased investment. The picture is least positive for online display advertising, although there are still more organisations (24%) who are increasing budgets than there are companies cutting back (16%). According to agency respondents, social media marketing is the channel where clients are most likely to be boosting their investment over the course of the next year. It is clear that Google remains king, with 85% of responding companies utilising the search engine for paid search. 94% of agencies say their clients typically pay to advertise on Google. In the social media arena, Facebook continues to dominate, with 65% of companies currently using the social networking site as part of their marketing strategy. Twitter in particular has shown phenomenal growth since last year. Last year only 3% of responding organisations said that they were using Twitter in their marketing strategy, compared to an overwhelming 49% for this year. Only 5% of companies are paying to advertise on mobile search listings and, surprisingly, that percentage has not increased since last year although 23% are planning to do this. More than two thirds of respondents say this is either not on the radar yet (37%) or that they have no plans to use mobile search (32%) Other highlights Type of search activities and search services There has been a significant increase since last year in the number of agency respondents who say their company focus is purely on PPC, a jump from 12% to 22%. There has only been a small drop (2%) in the proportion of agencies purely working on SEO, but a larger fall (8%) in the number of agencies focused on SEO and paid search equally. SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 3
8 4. Introduction by Guava We are pleased to be invited to be Econsultancy s research partner on this project for the third year running. This year we are especially pleased to note that most companies are looking to continue to invest more money in search engine optimisation and paid search, despite the current economic climate. We were delighted by the response to the 2007 and 2008 reports and feel we have gone some way to achieving our aim of providing the most comprehensive and useful piece of year on year Search Engine Marketing research in the UK. The tracking of both SEO and paid search results has continued to increase, however at just 45% of companies tracking their ROI from paid search there is certainly room for significant improvement. As a result of our status as a Google Analytics Authorized Consultant and Omniture Premiere Partner and the capabilities of our team, Guava will be focusing their efforts this year in assisting companies with ensuring that their analytics accounts have been correctly configured, in order that clients receive the most granular information about their searched based marketing campaigns. Social media seems to have taken hold as a significant part of companies marketing strategy with Facebook and Twitter dominating the landscape. Despite being adopted as an important marketing tool, so far companies are committing a very small portion of their budget to this. At Guava we predict that Social Media Marketing will move from an integrated part of our SEO campaigns to being delivered as a standalone service. This will change will occur over the coming year as larger companies want to take more control of this element of their marketing. We hope that you find the results present an interesting insight into the Search Engine Marketing landscape in the UK and that they are useful for you and your company in the coming months. Lucy Cokes, Director Guava SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 4
9 5. Methodology and Sample 5.1. Methodology This is the third annual UK Search Engine Marketing Benchmark Report published by Econsultancy in association with Guava. Many of the questions in the survey have been repeated over this time period, enabling us to compare data and look at trends. There were more than 800 respondents to our 2009 research request, which took the form of an online survey 1 in February and March Respondents included both client-side (in-house) marketers and supply-side respondents (including agencies and consultants). The findings are shown for both client-side (or company respondents ) and supplier-side ( agency respondents ) separately. Information about the survey, including the link, was ed to Econsultancy s user base. The incentive for taking part was access to a complimentary copy of this report just before its publication on the Econsultancy website. If you have any questions about the research, please Econsultancy s Research Director, Linus Gregoriadis (Linus@econsultancy.com) Respondent profiles Company or agency marketer? More than 400 of the survey respondents (49%) are in-house company digital marketers, compared to 39% who work for agencies. Figure 1: Which of the following most accurately describes your job role? Response: Econsultancy uses Clicktools for its online surveys SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 5
10 Annual company turnover Figure 2 shows that companies across a range of sizes are well represented. A fifth of companies (2o%) have an annual turnover of less than 1 million. Some 29% work for organisations generating more than 50 million. Agency respondents typically work for organisations with a lower turnover [Figure 3]. Companies Figure 2: What is your annual company turnover? Agencies Figure 3: What is your annual company turnover? Response: 310 Response: 250 SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 6
11 Business sector The best represented sectors are retail (54 respondents), financial services (51), publishing (35) and travel (28). Companies Figure 4: In which business sector is your organisation? Geography Response: 318 Some 93% of company respondents are based in the UK (Figure 5). The agency sample is slightly less UK-dominated (89%). SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 7
12 6. Findings 6.1. Type of search activity and search services What type of search activity (SEO / paid search)? As was the case last year, the overwhelming majority of company respondents are involved in both paid search and search engine optimisation (SEO). Since last year, there has been a 4% drop in the proportion of responding organisations involved in paid search and a 2% increase in those doing SEO [Figure 7]. Companies Figure 5: Is your organisation involved in the following types of search marketing? Response: 377 SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 8
13 Is search marketing done in-house or by agency? The last 12 months haven t seen much movement in terms of whether companies are carrying out their paid search activity in-house or via an agency [Figure 9]. Companies are slightly less likely to be using an agency exclusively. However, for SEO [Figure 10], there is a significant, 8% increase in the proportion of companies who say they are working on their natural search in-house in conjunction with using an agency. The proportion of respondents who say they use agencies is still around 50% but only 11% are now completely relying on this outside support without any internal capability Plans to keep or change status quo (in-house or agency) The charts below show a 5% increase in the proportion of responding organisations planning to keep both paid search [Figure 11] and SEO [Figure 12] in-house. Correspondingly, there has been a slight decrease in the number of responding organisations who are planning to keep their agency for both channels. Companies Figure 6: Where relevant, are you planning to keep paid search in-house? Response: 372 SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 9
14 6.2. Search budget SEO budget Figure 23 shows the amount being spent on SEO by company respondents. Almost half of companies (47%) are spending at least 10,000 per year on search engine optimisation, and a fifth are spending at least 50,000 annually on SEO. But since last year, there has been a 5% increase in the proportion of companies spending less than 5,000 [Figure 24]. Companies Figure 7: How much do you spend on SEO per year? Response: 351 SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 10
15 Paid search budget Figure 25 shows the level of spending on paid search. Just under a third of responding companies (32%) are spending at least 100,000 annually on paid search. Figure 26 shows there has not been much change since last year in the proportion of companies in each spending band, although there are slightly fewer companies spending more than 1 million annually on paid search Agency perspective on budgets Agencies were asked to indicate what percentage of their clients total marketing budget is typically spent on SEO, paid search and social media marketing. On average, agency respondents report that just under of a quarter of total marketing budget (24%) is allocated to paid search and a further 15% goes to SEO. This compares to 5% of budgets spent on social media marketing. Table 1: Of your clients' total marketing budget, what percentage is typically spent on SEO / paid search (pay per click) / social media marketing? Percentage of total marketing budget spent on Search / Social Media SEO Paid Search Social Media Marketing 15% 24% 5% Annual change in digital marketing budgets Figure 28 shows whether company respondents expect budgets to increase or decrease over the next 12 months across a range of digital marketing channels. The overall picture is positive for digital marketing, with budgets across the board more likely to be going up than going down. Search engine optimisation is the area where companies are most likely to be investing more money, with 55% of respondents expecting an increase in their budget. Just under a third of respondents (31%) say that SEO spending will stay the same and only 6% say there will be decreased investment. SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 11
16 6.3. Objectives and effectiveness Primary objectives from paid search Figure 33 shows that there has been a decrease in the proportion of company respondents citing branding, lead generation, direct online sales and driving traffic as primary objectives from paid search. Respondents were able to check multiple options Primary objectives from social media marketing The primary objectives for social media marketing are much more weighted towards branding than more tangible sales increases or lead generation. Only 11% of respondents say that direct online sales are a primary objective of social media activity and only 18% say that lead generation is a main focus Impact on brand Digital marketers were also asked specifically whether paid search, SEO or social media marketing were more important in terms of the impact on their brand [Figure 36]. SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 12
17 Tracking ROI from paid search The number of clicks / visitors and number of sales are the two most commonly used methods for tracking return on investment for both paid search and SEO. For paid search, 61% of companies say that clicks / visitors are used to measure ROI, followed by number of sales (53%), value of sales (43%) and leads (37%). Figure 41 shows the change since There has been a slight decrease in the proportion of companies who say they look at the branding benefit of their sponsored listings when assessing whether their investment is worth it. This reflects the tough economic climate in which marketers are more focused on harder metrics. Company trends Figure 8: Change in methods used for paid search tracking since 2008 Agencies Figure 9: How are your clients typically tracking return on investment from paid search? Response: 252 SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 13
18 Issues affecting ROI from SEO and paid search In a free-form question, respondents were asked to give more detail about the factors affecting return on investment from search, including both SEO and paid search. Companies and agencies surveyed cite the following factors as the main factors impacting their ROI: Impact of the credit crunch / recession Recession/credit crunch [leading to] less people looking to buy things. US $ vs. exchange rate (global bidding costs have increased as pound depreciated). Less budget due to credit crunch. The media constantly covering the credit crunch and the banks not funding businesses like they used to. Agencies and company respondents Closely related to the issue of the current financial climate are poor conversion rates. Inevitably, increasing financial pressure is resulting in an overall cut in budgets and tightening of resources. Poor conversion rate and lack of budget / resource We're really feeling the pressure - our budgets are getting smaller and smaller, so we are not able to outsource any of our search activities to specialist providers. Therefore, the search work isn't managed as well as it could be. SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 14
19 6.4. Search Engines Search engines used for paid search It is clear that Google remains king, with 85% of company search marketers utilising the search engine for paid search. Google s continued domination of the paid search industry is further illustrated by the 94% of agencies who say that their clients typically pay to advertise on Google [Figure 62] Effectiveness of particular search engines Analysis of free-form answers from both agencies and companies shows that most marketers are very aware that Google holds the dominant market position in the industry. While the cost of clicks is generally higher on Google, significantly higher conversion rates make it the most costeffective search engine overall. Effectiveness of particular search engines "Google is head and shoulders above the rest. Yahoo is falling behind. Live is very distant third - mainly used by people who can't figure out how to change default search engine (who are unlikely to purchase our products)" Agencies and company respondents SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 15
20 6.5. Search planning and issues Figure 64 shows the areas that company respondents are typically involved with or planning. Social media marketing (a new option for this year s survey) is rapidly growing in importance. Over half of agencies (54%) say their clients are currently using local search, whilst slightly fewer (52%) say that their clients are currently employing social media marketing Social media sites In the social media arena, Facebook continues to dominate, with 65% of companies and currently using the social networking site as part of their marketing strategy. Twitter in particular has shown phenomenal growth since last year. Last year some 3% of responding organisations said that they were using Twitter in their marketing strategy, compared to an overwhelming 49% for this year. Other sites mentioned included Flickr, Ning, Vimeo, StumbleUpon and Last.fm. Agencies report even higher usage of social media sites by their own clients. Companies Figure 10: Which of the following social media sites is your organisation currently utilising as part of its marketing strategy? Response: 237 SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 16
21 Barriers to successful paid search campaigns As well as asking specifically about factors which negatively impacted paid search return on investment [Figure 58], respondents were also asked more generally about what was holding back their paid search marketing. Companies Figure 11: Which of the following are the biggest problems preventing you from being as successful at paid search (Pay per click) as you would like? Barriers to effective SEO Response: 287 The lack of internal resource (cited by 44% of organisations) and a lack of budget (31%) are biggest problems holding company marketers back from being as successful as they would like at SEO. SAMPLE: UK Search Engine Marketing Benchmark Report 2009 Page 17
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