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MarketingSherpa’s Search Marketing Benchmark Guide 2007-2008 is the fourth annual edition, and has been completely re-researched and rewritten to accurately reflect today’s search marketing landscape

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Marketing Sherpa – Search Marketing Benchmark Guide 2008

Search Marketing Benchmark Guide 2008

  • 2,475 search marketers surveyed
  • 184 charts & tables +10 eyetracking heatmaps
  • 711 search marketing agency execs and staff surveyed
  • Stats on costs per click, conversion rates, SEO vs. PPC, and more
  • Growth rates and ROI of search marketing vs. other marketing tactics
    Click here to download Executive Summary
With the search marketing industry expanding nearly 40% globally, facts, tactics and trends changed rapidly over the last 12 months. Don’t assume today’s information is the same as last year’s – it’s not! Stay ahead of your competition and learn what works and what doesn’t in Search Marketing for 2008.

MarketingSherpa’s Search Marketing Benchmark Guide 2007-2008 is the fourth annual edition, and has been completely re-researched and rewritten to accurately reflect today’s search marketing landscape. This real data can only help companies better plan their 2008 budgets and forecast results.

New Research Highlights
The over 3,000 search marketers surveyed provide top 5 insights for 2008. Find out:

  • What you can expect to spend on Search Marketing in 2008.
  • How consumers really look at Web-based content and advertsing. Does URL length affect viewing and content?
  • How search ROI stacks up against other tactics.
  • 247 real life marketers explain the challenges they faced in bring Search engine marketing in-house.
  • A new way to evaluate clicks and click fraud.

    MarketingSherpa’s Benchmark Guide has relevant data for small, medium and large companies.

  • Real-life results based on varying budgets and tests.
  • How the world searches and shops.
  • Tactical spending changes for 2008.
  • B-to-B and B-to-C data.
  • Trends of online advertising in relation to. traditional marketing.
  • The relationship between SEO and Public Relations.
  • Rating the top search properties.
  • The real issues of click fraud.
  • How search ROI stacks up against other marketing.
  • The true averages of CPC in the major search engines

    The 2007-2008 edition is our biggest ever, with 275 fact-filled pages complete with 184 charts & tables, 10 heatmaps and analysis that can help you:

  • Evaluate your budgets in relation to real-world spending
  • Justify and defend your PPC and SEO budgets
  • Forecast results – including clicks, conversion and costs – more accurately
  • Discover practical tips on measurement
  • Select result-driven SEM tests
  • Train new staff more easily

    Your new Benchmark Guide includes 3 Special Reports:
    Challenges to In-House SEM We surveyed 247 marketers who brought their SEM in-house about their successes and failures. They reveal how complicated the transition is from out-sourcing to going in-house, and how long it takes to be up and running. We also found out why it’s so hard to find good search employees.

    Eyetracking Study of Search Ad Position and Relevance This new eyetracking study focuses on ad relevance, position and URL length. We recruited business professionals to evaluate a web visitor’s behavior and attention in relation to ad relevance and ad position. These professionals also provide insight into how the length of a URL affects viewing and action.

    Under the Hood of Ranking Toolbars There are three toolbars that measure traffic and other factors to determine a web site’s popularity, standing and trustworthiness. This special report reveals their reliability and limitations, how their systems operate, how traffic is counted and how data might be affected.

    Hundreds of questions answered with the Search Marketing Benchmark Guide. Here are just 10:

  1. Am I budgeting enough or too much for SEM in relation to the rest of my marketing budget?
  2. What is the real impact of landing pages on conversions?
  3. What’s the first thing consumers do when they land on a retail site?
  4. How can a change in my internal search engine improve my site’s conversion rate?
  5. How are merchants policing affiliates and search?
  6. Why would I want to bring SEM in-house and why would I want to continue to outsource it?
  7. If I want to do business in China or India, is click fraud something I should worry about? Also is it important to translate my site?
  8. What should my conversion rate be for PPC vs. SEO listings?
  9. What do mobile internet users search for?
  10. What do customers do after viewing a video online?

Table of Contents
Editor’s Note
New Research Highlights

  • Chart I: Expected Search Spending for 2008
  • Chart II: How Search ROI Stacks Up Against Other Tactics
  • Chart III: Difficulty in SEM Staffing Rated by Job Function
  • Chart IV: A New Way to Evaluate Clicks and Click Fraud
  • Eyetracking Heatmap: Impact of Long URL Length on Ad Viewing

Glossary
Chapter 1: The Business of Search – Budgeting, Issues & Outsourcing Search

  • Chart 1.1: 2006-2008 Search Spending
  • Table 1.2: Online Advertising – 2006 Spending Breakdown
  • Chart 1.3: Online Advertising Slowly Overtaking Traditional Tactics
  • Chart 1.4: Tactical Spending Changes for 2008 – PPC on Google
  • Chart 1.5: Tactical Spending Changes for 2008 – PPC on Top Tier (Yahoo!, MSN, AOL & Ask)
  • Chart 1.6: Tactical Spending Changes for 2008 – PPC on 2nd Tier
  • Chart 1.7: Tactical Spending Changes for 2008 – SEO
  • Chart 1.8: SEO Spending as % of Paid Search 2007
  • Chart 1.9: B-to-C SEM Budget Percentages – $50,000 Marketing Budget
  • Chart 1.10: B-to-C SEM Budget Percentages – $300,000 Marketing Budget
  • Chart 1.11: B-to-C SEM Budget Percentages – $1.3 Million Marketing Budget
  • Chart 1.12: B-to-C SEM Budget Percentages – All Budgets Over $1 Million
  • Chart 1.13: B-to-B SEM Budget Percentages – $75,000 Marketing Budget
  • Chart 1.14: B-to-B SEM Budget Percentages – $250,000 Marketing Budget
  • Chart 1.15: B-to-B SEM Budget Percentages – $1.2 Million Marketing Budget
  • Chart 1.16: B-to-B SEM Budget Percentages – Average of Budgets Over $1 Million

Challenges in SEM

  • Chart 1.17: Agency Pros Rank SEM Challenges
  • Chart 1.18: Marketers Rank SEM Challenges by Size of Business Targeted
  • Chart 1.19: High Volume and Large Budget Marketers Rank SEM Challenges

Special Report: Challenges to In-House SEM

  • Chart 1.20: Reasons for Bringing SEM In-House
  • Chart 1.21: Advertiser Happiness with Paid Placement Services’ Providers
  • Chart 1.22: How Long Before In-House SEM is Up and Running?
  • Chart 1.23: Difficulty in SEM Staffing Rated by Job Function
  • Table 1.24: Issues in Staffing – Agencies’ View
  • Chart 1.25: Staffing Challenges Compared to Other Issues in SEM
  • Chart 1.26: Many Hats – the Roles of Search Marketers
  • Table 1.27: Why Search Marketers are Mobile (Salaries and Demand)
  • Table 1.28: Why Search Marketers are Mobile 2: The Impact of Experience

Search Marketing Agencies

  • Chart 1.29: Use of Paid Search Vendors 2006-2007
  • Chart 1.30: Use of SEO Vendors 2006-2007
  • Chart 1.31: Use of SEM Vendors 2006-2007 – Marketers Spending Less Than $10,000
  • Chart 1.32: Use of SEM Vendors 2006-2007 – Marketers Spending More Than $25,000
  • Table 1.33: Agency Pros Speak Out – Issues and Opportunities in SEM

Click Fraud

  • Table 1.34 : Trends in Click Fraud
  • Chart 1.35: How Many Marketers Identify Click Fraud?
  • Chart 1.36: Reported Click Fraud Levels 2006 vs. 2007
  • Chart 1.37: A New View of Click Fraud
  • Definitions of some of the click fraud metrics used in the scoring of clicks
  • Chart 1.38: Click Fraud Estimates 2006-2007
  • Chart 1.39: How Marketers Identify Click Fraud?
  • Chart 1.40: How Will Click Fraud Be Resolved? 2006 vs. 2007
  • Chart 1.41: How Will Click Fraud Be Resolved? Big vs. Average Spenders

Top Search Advertisers

  • Table 1.42: Top Sponsored Link Advertisers by Exposures
  • Table 1.43: Sponsored Link Advertising by Industry

Chapter 2: Topics in Search

Special Report: Eyetracking Study of Search Ad Position and Relevance

Heatmaps Explained

Experiment One: Relevance in Listings

  • Relevance of text descriptions
  • Heatmap 2.1: Scanning of Relevant and Non-Relevant Text Ads
  • Heatmap 2.2: Example of Scanning on Relevant Listings
  • Heatmap 2.3: Example of Scanning on Non-Relevant Listing
  • Non – Relevant Listings and Their Effect on Scanning
  • Conclusions

Experiment Two: Side-listed Ads – Impact of Relevance and Position

  • Heatmap 2.4: Side-Sponsored Ad in First Position
  • Heatmap 2.5: Side-Sponsored Ad in Third Position
  • Heatmap 2.6: Side-Sponsored Ad in Fifth Position
  • Analysis
  • Conclusions

Experiment Three: Position Length of URL

  • Length of URL strings as they appear in search listings
  • Heatmap 2.7: Test Listing with Short URL
  • Heatmap 2.8: Test Listing with Long URL
  • Heatmap 2.9: Click Patterns on Test Listings – Short vs. Long URL Strings
  • Table 2.10: Time Spent with Listings by URL Length
  • Heatmap 2.11: Impact of Long URL Length on Subsequent Ad Viewing

Related Findings: PPC Advertising – the Relevance of Relevance

  • Case Study 1
  • Case Study 2

Business/Vertical Search

  • Chart 2.12: Search Engines Used by Business Technology Buyers
  • Chart 2.13: Search Engines ‘Used Most Frequently’ by Technology Buyers
  • Chart 2.14: Business Searchers Often Can’t Locate Info via Search
  • Notes from the Field: How to Lower Costs for B-to-B Leads

Contextual Advertising

  • Chart 2.15: Contextual CPC for Google AdSense
  • Chart 2.16: Contextual CTR for Google AdSense

Local Search & Pay per Call

  • Chart 2.17: Tactical Spending Changes for 2008 – Local Search
  • Chart 2.18: Local Online Spending 2002-2007
  • Chart 2.19: Ad Spending in Local Media, Online vs. Traditional
  • Notes from the Field: Running Ads in Google Local vs. Main Google Search

Mobile Search

  • Chart 2.20: Mobile Search Engine Use
  • Chart 2.21: Mobile Internet Use by Country
  • Chart 2.22: What Mobile Internet Users Search for
  • Table 2.23: Mobile Video Revenue Share 2006 vs. 2007
  • Table 2.24: Mobile Browser Market Share

SEO & Public Relations

  • Table 2.25: Top 25 News Web Sites for June 2007
  • Chart 2.26: Tactics in Optimizing Press Releases 2006-2007
  • Chart 2.27: Measuring Success in Optimizing Press Releases 2005-2006

The Second Tier of Search Properties

  • Chart 2.28: Use of 2nd-Tier Search Properties for Marketing
  • Chart 2.29: Use of 2nd-Tier Search Properties – Average vs. Big Spenders
  • Table 2.30: Agency and Marketer Comments on 2nd-Tier Experience
  • Table 2.31: Keyword Prices – Comparing the 1st & 2nd Tier
  • Chart 2.32: Total Searches for June 2007 – 2nd-Tier Search Properties
  • Chart 2.33: Share of Searches for June 2007 – 2nd-Tier Search Properties
  • Chart 2.34: Unique Searchers for June 2007 – 2nd-Tier Search Properties
  • Chart 2.35: Penetration for June 2007 – 2nd-Tier Search Properties
  • Chart 2.36: Searches per Searcher for June 2007 – 2nd Tier Search Properties
  • Chart 2.37: Sessions per Searcher for June 2007 – 2nd-Tier Search Properties

Profiles of 2nd-Tier Engines

  • Table 2.38: Selected Search Properties’ Comparison 1 – Setup and Bidding
  • Table 2.39: Selected Search Properties’ Comparison 2 – Ad-Targeting Options

Profiles of Selected 2nd-Tier Search Providers

  • Search123 Inc. (division of ValueClick Inc.)
  • LookSmart
  • Mamma (division of Copernic Technologies Inc.)
  • Superpages.com (division of Idearc Inc.)
  • Lycos
  • Business.com
  • Yesup (Powered by sister company Clicksor.com)
  • Epilot (A subsidiary of Local.com)

How We Search and Shop

  • Table 2.40: Top 100 U.S. Product/Retail-Oriented Search Terms June 2007
  • Chart 2.41: Word Count in Search Phrases – U.S. Searchers
  • Chart 2.42: Impact of Complimentary Paid and Natural Search Listings
  • Table 2.43: Top U.S. Search Terms – IT and Internet
  • Table 2.44: Top U.S. Search Terms – Internet Advertising
  • Table 2.45: Top U.S. Search Terms – Net Communities and Chat
  • Chart 2.46: How Far Do Searchers Delve Into Results?
  • Chart 2.47: Online Shopping and Product Research Are Ordinary
  • Chart 4.48: How Do Online Shoppers Find New Retailers?
  • Chart 2.49: Search’s Impact on Traffic by Product Category
  • Chart 2.50: Share of Retail Referrals from Search
  • Chart 2.51: Share of Referrals – Specialty Home Category
  • Chart 2.52: First Step in Product Research – Electronics Example
  • Chart 2.53: Share of Retail Searches and Clickthrough
  • Chart 2.54: Shopping Engines Compared – Search Agencies Rate ROI
  • Chart 2.55: Tactical Spending Changes for 2008 – Shopping Search
  • Table 2.56: Shopping Sites – Required Feed Attributes
  • Table 2.57: Shopping Site Capabilities

Special Report: Under the Hood of Ranking Toolbars

  • Alexa
  • Compete Toolbar
  • Third-Party Services
  • TrustGauge/BrowserAccelerator
  • Other Popular Toolbars

Video & Search

  • Table 2.58: Market Share of Top Video Properties
  • Table 2.59: Top U.S. Online Streaming Video Properties
  • Chart 2.60: Actions Taken After Viewing Online Video
  • Table 2.61: Selected Video Properties Comparison Chart

Selected Video Site Profiles

  • Google Video
  • AOL Video
  • Yahoo! Video
  • AltaVista Video Search
  • Blinkx.com
  • Everyzing.com (formerly Podzinger.com)
  • Pixsy.com
  • Truveo (Acquired by AOL in January 2006)
  • YouTube (Purchased by Google Inc. in November 2006)

Chapter 3: Top Search Properties

  • Chart 3.1: SEM Agencies View Top Search Properties – 12-Month Outlook
  • Chart 3.2: SEM Agencies Rate the Top Search Engines – ROI
  • Chart 3.3: SEM Agencies Rate the Top Search Engines – Customer Service
  • Chart 3.4: SEM Agencies Rate the Top Search Engines – Targeting Tools
  • Chart 3.5: SEM Agencies Rate the Top Search Engines – Keyword Suggestion Tools

Top-Tier Search Engine Profiles

  • Google
  • Yahoo!
  • Microsoft LiveSearch & AdCenter
  • Table 3.6: Selected Search Properties’ Comparison 1 – Setup and Bidding
  • Table 3.7: Selected Search Properties’ Comparison 2 – Ad Targeting Options
  • Table 3.8: Top U.S. Search Terms – Google Properties 2006-2007
  • Table 3.9: Top U.S. Search Terms – Yahoo! Properties
  • Table 3.10: Top U.S. Search Terms – MSN Properties
  • Chart 3.11: Total Searches for 2005-2007 – Top 5 Search Properties
  • Chart 3.12: Share of Searches 2005-2007 – Top 5 Search Properties
  • Chart 3.13: Unique Searchers 2005-2007 – Top 5 Search Properties
  • Chart 3.14: Penetration for 2005-2007 – Top 5 Search Properties
  • Chart 3.15: Searches per Searcher 2005-2007 – Top 5 Search Properties
  • Table 3.16: “Lifestage” Demographics of Top 5 Search Engines – Composition of Searches
  • Table 3.17: “Lifestage” Demographics of Top 5 Search Engines – Composition of Unique Searchers
  • Table 3.18: Household Income Profile of Top 5 Search Engines by Composition of Searches
  • Table 3.19: Household Income Profile of Top 5 Search Engines by Composition of Unique Searchers
  • Chart 3.20: Information Workers Prefer Google

Search Engine Shares – International

  • Chart 3.21: Online Language Share

Focus on: China & India

  • Chart 3.22: Pace of Asian Internet Usage Outpacing World
  • Chart 3.23: Baidu Leads, But Google’s Slide Is Over
  • Table 3.24: Click Fraud a Serious Concern in China
  • Chart 3.25: Chinese Search Marketers = Small Businesses
  • Table 3.26: Top 25 Advertisers in China, Ranked by Spending
  • Table 3.27: Chinese Online Advertising by Industry Sector
  • Table 3.28: Top Web Properties – India
  • Table 3.29: Top Activities and Sites in India

International Search Data

  • Table 3.30: Search Property Comparison – Australia (Home & Work)
  • Table 3.31: Search Property Comparison – Brazil (Home)
  • Table 3.32: Search Property Comparison – France (Home & Work)
  • Table 3.33: Search Property Comparison – Germany (Home & Work)
  • Table 3.34: Search Property Comparison – Italy (Home & Work)
  • Table 3.35: Search Property Comparison – Japan (Home)
  • Table 3.36: Search Property Comparison – Spain (Home)
  • Table 3.37: Search Property Comparison – Switzerland (Home)
  • Table 3.38: Search Property Comparison – United Kingdom (Home & Work)

Chapter 4: Search Tactics and Measurement

  • Chart 4.1: How Search ROI Stacks Up – Marketing Tactics Compared
  • Chart 4.2: How ROI Stacks Up – Marketers Spending Over $25,000 per Month on Search
  • Chart 4.3: How ROI Stacks Up – Marketers Spending Under $10,000 per Month on Search
  • Chart 4.4: SEM Campaign Tests ROI – Agency View
  • Chart 4.5: Impact of Landing Page Elements
  • Notes from the Field: How to Increase Conversions as a Print Subscription Publisher by Revamping Search Landing Pages
  • Chart 4.6: SEM Campaign Tests ROI – Agency View by Clients’ Average Spend
  • Notes from the Field: How to Measure Search Campaign ROI Using an Innovative SEM Scoring System
  • Chart 4.7: Targeting Search Users – Tactics Rated by Agencies (Average)
  • Chart 4.8: Targeting Search Users – Tactics Rated by Agencies With Average Client Spend Above $25,000
  • Table 4.9: Coping With Rising Keyword Prices – Agency View
  • Notes from the Field: Improving Search Marketing ROI
  • Chart 4.10: Keyword Research: Tactics for Keyword Research

Emerging Capabilities in Search

  • Chart 4.11: Emerging Capabilities – What’s in Store for Search?

Search Engine Optimization

  • Chart 4.12: SEO Lift After Six Months of Optimization – Agencies vs. In-house
  • Chart 4.13: Technology Marketers Evaluate Site Optimization
  • Table 4.14: Key Factors in Search Engine Optimization
  • Chart 4.15: SEO – Easier Said Than Done
  • Chart 4.16: Obstacles Encountered by Marketers in Implementing SEO Recommendations

Affiliates & Search

  • Chart 4.17: Merchant Policies Toward Affiliates’ Paid Search Becoming More Sophisticated

Internal Search

  • Chart 4.18: What’s the First Thing Consumers Do When They Arrive at a Retail Site?
  • Chart 4.19: Marketers Grade Their Internal Search
  • Chart 4.20: Marketers Rank Internal Search Capabilities
  • Notes from the Field: How an Eretailer Tripled Conversions With Internal Search Changes

Chapter 5: Search Benchmark Data

Keyword Prices

  • Chart 5.1: CPC for Top 3 Search Engines – Averages 2005-2007
  • Chart 5.2: CPC for Top 3 – Median Price Summary 2006-2007
  • Chart 5.3: Cost per Click Breakdown – Google 2006-2007
  • Chart 5.4: Cost per Click Breakdown – Yahoo! 2006-2007
  • Chart 5.5: Cost per Click Breakdown – MSN 2006 – 2007
  • Chart 5.6: Cost per Click: Shopping Comparison Engines 2006-2007
  • Chart 5.7: Cost per Click: 2nd-Tier Search Providers 2006-2007

Keyword Prices by Marketer Type

  • Chart 5.8: CPC – Marketers with In-house Paid SEM
  • Chart 5.9: CPC – Marketers with Outsourced Paid SEM
  • Chart 5.10: CPC – Marketers Bidding on More Than 1,000 Keywords
  • Chart 5.11: CPC – B-to-C Direct Ecommerce
  • Chart 5.12: CPC – B-to-C Lead Generation
  • Chart 5.13: CPC – B-to-B Lead Generation

Keyword Volumes

  • Chart 5.14: Breakdown of B-to-C Keyword Buying
  • Chart 5.15: Breakdown of B-to-B Keyword Buying
  • Chart 5.16: Breakdown of Keyword Buying – Companies Spending Under $10,000 per Month
  • Chart 5.17: Breakdown of Keyword Buying – Companies Spending More Than $25,000 per Month
  • Chart 5.18: Breakdown of Keyword Buying – Companies with Outsourced PPC

Conversion Rates

  • Chart 5.19: Paid Search Conversion Rates
  • Chart 5.20: Natural Search Conversion Rates
  • Chart 5.21: Shopping Comparison Engine Conversion Rates
  • Chart 5.22: In-House vs. Outsourced Conversions Rates – PPC
  • Chart 5.23: In-House vs. Outsourced Conversions Rates – SEO

Clickthrough Rates

  • Chart 5.24: Clickthrough Rate Averages 2005-2006
  • Chart 5.26: B-to-C Clickthrough Rates – Top Engines and Shopping Comparison
  • Chart 5.27: B-to-B Clickthrough Rates – Top Engines

Appendix – Demographic Data for 2007 Search Marketing Benchmark Survey

Chart A.01: SEM Agency Respondents – Clients’ Monthly Search Spend

Chart A.02: Marketers Monthly Search Spend

Chart A.03: Respondents by Primary Product Type

Chart A.04: Respondents by Primary Conversion Type

Chart A.05: Respondents by Primary Customer Type

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