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Search engine marketing (SEM) is the most cost effective, high volume, direct response marketing channel on the web. According to the Search Engine Marketing Professional Organization SEMPO (2006), advertisers in the US and Canada spent $5.75 billion on SEM in 2005, a 44 percent increase over 2004 spending.
2006 is expected to show sharp increase over 2005. And to boot, “Internet users are extremely positive about search engines and the experiences they have when searching the internet,” according to a research report from Pew/Internet (2005).
SEM: lead generation leader of direct marketing
While research indicates that sponsored text advertising in the search environment works for an array of branding objectives, most advertisers choose to move existing advertising budgets from various offline and online avenues to search advertising in an effort to strengthen their direct response marketing (Internet Search Brand Effectiveness Research, Nielsen//Netratings, 2004).
Search is the lead generation king of direct marketing offering the lowest cost-per-response of $0.45 compared to $0.55 (e-Mail) and $2.00 (banner ads).
Acquiring new targeted leads and sales through search marketing presents a major opportunity for organizations. eMarketer found (2005) that paid search accounts for about 40 percent of spending for online advertising and is the fastest growing segment.
The search engine environment becomes significantly more competitive as more marketers discover search marketing benefits.
In-house or outside SEM Agency?
More than two thirds of surveyed advertisers claimed their marketing is more effective when using an outside SEM provider (SEMPO, 2005. PDF). With search engine algorithms becoming increasingly complex, more and more advertisers concede that without professional assistance, they lack the in-house tools, time and/or knowledge to stay abreast.
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