The search engine marketing industry is still alive and well - even buoyant - with the majority of companies reporting plans to increase their budgets for both paid search and natural search in 2008, according to a report by E-Consultancy and Neutralise.
The survey found that 63% of companies are planning to increase their budget for paid search during the next 12 months, and that 61% plan to invest more in search engine optimisation (SEO) during the same period.
Thriving search market
Of the 1,000+ UK-based respondents, 9% said their company is already spending more than 1 million each year on paid search techniques, and 16% of companies are spending at least 50,000 each year on search engine optimisation.
According to Lucy Cokes, managing director for search agency Neutralise, "It appears that search engine marketing is now cemented in the minds - and therefore the budgets - of UK marketers. It is good to see a greater understanding of the benefits of a well-managed search marketing campaign, and budgets being increased accordingly for both paid and organic search."
Google ads still popular
Some 86% of search advertisers reported that they are currently paying to appear in Google's search results, suggesting that Google is maintaining its dominance in the paid search landscape.
The percentage of organisations using Yahoo!'s paid search platform has climbed from 45% in 2007 to 49% in 2008, and the proportion of advertisers using Microsoft's platform has dropped slightly, from 33% to 30% over the same period.
In-house or outsourced?
Since 2007, the proportion of companies conducting paid search and SEO exclusively in-house has declined. However, the survey also noted that there has been a significant drop in the proportion of respondents citing "a lack of internal resources" as a major barrier to SEO campaigns.
Correspondingly, the proportion of companies using an agency for both disciplines has gone up. There has also been a significant increase in the proportion of companies calling upon agencies to help them with landing page development.
Best ROI on search ads
The survey found that 89% of search advertisers rated Google as the best option in terms of ROI (return on investment), and 89% of respondents rated Google as the best option in terms of quality of web traffic. Google is even more dominant when it comes to paid search campaign management tools, with 94% of client-side advertisers and 91% of agencies saying that Google was the best provider.
Linus Gregoriadis, E-consultancy's Head of Research, said: "The almost universal use of Google by these advertisers echoes its huge market share among search engine users, with Google becoming almost synonymous with the term 'search."
The full report has been made available for download from E-Consultancy's web site - click here (free to E-Consultancy paid subscribers, or US$299 pay-per-view).