Big business hot for SEM, small business cool to PPC

Search engine marketing, once dominated by small and medium size businesses, is now the territory of big-budget marketers. The percentage of those spending more than $1 million doubled to 24%, according to a new survey by JupiterResearch updating results from a year earlier.

24% of big businesses in the U.S. are spending more than $1 million on search engine marketing

According to another survey, conducted by The Kelsey Group and ConStat, 34% of small and medium businesses in the U.S. are interested in using pay-per-click (PPC) search engine marketing, a healthy jump over the 11% currently using PPC.

34% of the small and medium businesses in the U.S. are interested in pay-per-click search engine marketing

The actual percentage of small businesses using search engine advertising is most likely much lower, since up to 70 percent of small businesses have no Website. The Kelsey Group is nevertheless optimistic and estimates that local commercial search which usually feeds results for small businesses, represents 25 percent of all search activity, and the local search market could generate as much as $2.5 billion by 2008.

Furthermore, the study reveals the following results:

  • 23% of the ad budget PPC-participating small and medium size businesses dedicate to search engine marketing goes to pay-per-click programs
  • 54% of the same pay-per-click advertisers expect to increase their PPC activities next year
  • 56% of the small and medium size pay-per-click advertisers believe in its potential and agree that it will be an important advertising method for their company in the future
  • 73% of the small and medium size advertisers interested in PPC plan on implementing it within the next year

34% of the small and medium businesses in the U.S. are interested in pay-per-click search engine marketing

Most pay-per-click advertisers do not track their search engine leads

The Jupiter Research reveals that fewer than 25 percent of online marketers track whether their paid search listings generated offline or online conversions.

Fewer than 25% of online marketers track their leads

Only 21 percent of the survey participants said they tracked the success of their keyword campaigns and if they produced leads for offline sales, while 23 percent tracked the success of online sales. Immediate online sales were tracked by 45 percent of respondents. Not surprisingly, web traffic and number of hits and pages viewed is the most common, although sadly the least insightful measurement, with 65 percent tracking it.

No search engine marketing campaign can be succesful unless supported by analysis of conversion rate. Web analytics should be in the arsenal of every web marketer interested in return on their web investment.