National Search Marketing Barometer 2010By the IAB Search Council

For more information contact Jack Wallington, jack@iabuk.net

introduction

“The search marketing industry – worth £2.15 billion in 2009 – is in a state of transition. The IAB National Search Marketing Barometer 2010 captures a time of internal reflection and a sense of change. As a mainstay of the marketing mix, brands understand the fundamentals of search but a chasm of advanced knowledge has emerged because of shifting, evolving technology, increased economic pressures and changes in consumer search behaviour. It is the duty of every agency, search engine and marketing trade body to ensure brands are supplied with the more advanced information they require.”

Jack Wallington Chair of IAB Search Council

“The search marketing industry – worth £2.15 billion in 2009 – is in a state of transition. The IAB National Search Marketing Barometer 2010 captures a time of internal reflection and a sense of change. As a mainstay of the marketing mix, brands understand the fundamentals of search but a chasm of advanced knowledge has emerged because of shifting, evolving technology, increased economic pressures and changes in consumer search behaviour. It is the duty of every agency, search engine and marketing trade body to ensure brands are supplied with the more advanced information they require.”

Jack Wallington Chair of IAB Search Council

“At Sainsbury’s we have a twofold approach of using search as direct response to drive online sales and to support our brand-building activities. This report really highlights the need for all marketing teams within brands, not just digital, to understand the opportunity search offers to support all marketing activity, and we hope that the search industry will continue to support us in this.”

Anna Corp, SEO, affiliate and search manager for

Sainsbury's

“At Sainsbury’s we have a twofold approach of using search as direct response to drive online sales and to support our brand-building activities. This report really highlights the need for all marketing teams within brands, not just digital, to understand the opportunity search offers to support all marketing activity, and we hope that the search industry will continue to support us in this.”

Anna Corp, SEO, affiliate and search manager for

Sainsbury's

contents

1. The basics

2. Budget and resource

3. Staff, knowledge and understanding

4. Data

5. Measuring success

6. Integration and the future

7. Summary

1. THE BASICS

H2 2009 actual search figures up year on year

£m

Source: Internet Advertising Bureau / PricewaterhouseCoopers

Barometer methodology

• Online questionnaire

• Emailed only to the top brands by advertising spend in April/May

• 144 completions from 91 different brands (majority within the top 100 brands)

• Commentary and analysis by the IAB Search Council

Respondents

Base: 145

90% manager or above

Respondents by vertical

Base: 146

High general understanding

Base: 143

(10 = complete understanding, 1 = no understanding)

7.3 averageNon-digital Senior / Marketing Managers had lowest level of understanding at 6.1 average

Per

cent

age

of r

espo

nden

ts

Low understanding of advanced tools

Base: 140

Do you feel you have enough information about the following?

“There are very few agencies known for being great at search and which hold any form of mobile accreditation but there are a few. The IAB’s research suggests that number will increase rapidly in 2010 and 2011.” - Andrew Girdwood, BigMouthMedia

“There are very few agencies known for being great at search and which hold any form of mobile accreditation but there are a few. The IAB’s research suggests that number will increase rapidly in 2010 and 2011.” - Andrew Girdwood, BigMouthMedia

Per

cen

tag

e o

f re

spon

dent

s

Efficiency a clear concern

What are your main challenges in relation to search marketing? (tick as many as you like)

Base: 134

Related to

efficiency

Per

cen

tag

e o

f re

spon

dent

s

2. BUDGET AND RESOURCE

Perceived ease in shifting budgets to digital

Base: 117

Are you struggling to shift budget from traditional media into digital?

Digital budgets higher than industry average

Percentage of overall budget dedicated to digital

Per

cent

age

of r

espo

nden

ts

Base: 99

37.9% average

SEO budgets may undervalue actual cost

Base: 109

Per

cent

age

of r

espo

nden

ts

Percentage of DIGITAL budget

PPC spend incredibly varied

Base: 109

Per

cent

age

of r

espo

nden

ts

Percentage of DIGITAL budget

Budgets to stay the same or increase

Base: 109

Per

cent

age

of r

espo

nden

ts

How do you expect this budget to change throughout 2010?

INTERNALLY, who is responsible for both SEO and PPC?

Base: 109

Per

cent

age

of r

espo

nden

ts

Only 14% don’t employ an agency for PPC

Base: 116

Do you employ an agency?

Per

cent

age

of r

espo

nden

ts

“Over 50% of brands give their PPC to a media buying agency rather than a search specialist. The opportunity here is for a media agency to emerge that’s as good at search as a search specialist.”

Andrew Girdwood BigMouthMedia

“Over 50% of brands give their PPC to a media buying agency rather than a search specialist. The opportunity here is for a media agency to emerge that’s as good at search as a search specialist.”

Andrew Girdwood BigMouthMedia

Search already used for brand campaigns

SEO(percentage of respondents)

PPC(percentage of respondents)

Direct sales 54% 57%

Leads 36% 44%

Awareness and information

74% 58%

Brand building 70% 53%

Base: 112

What are your main search objectives? (tick as many as you like)

“Recent studies have shown data-backed justification for using search to compliment all marketing uses…branding and awareness are key here”- Simon Turner, Yahoo!

“Recent studies have shown data-backed justification for using search to compliment all marketing uses…branding and awareness are key here”- Simon Turner, Yahoo!

Lack of PPC budget may be restricting 72% of respondents

Base: 114

If your company has a budget for paid search, how would you rank it?

“One of the fundamentals of drawing the most value from paid search is to let the returns dictate the investment. Businesses will be missing out on valuable revenue here by being too inflexible in their budgeting.”

Graham Everitt Reform

“One of the fundamentals of drawing the most value from paid search is to let the returns dictate the investment. Businesses will be missing out on valuable revenue here by being too inflexible in their budgeting.”

Graham Everitt Reform

Spend matches audience split

Base: 93

Share of spend across search engines

Aggregators

Base: 114

Only 5 respondents consider this to be search

3. STAFF, KNOWLEDGE AND UNDERSTANDING

Only 38.6% feel teams outside of digital also understand the importance of search

Base: 114

Please select the statement below that best reflects your business...

Do you find it hard to find skilled search staff?

Base: 114

Entry level employee backgrounds

Base: 94

When recruiting entry level employees to WORK ON SEARCH, what background do they generally have? (select as many as apply)

“A good way to spot a good search marketer is to look for a digital native. Do they blog, are they on Twitter and is their own site well optimised?” - Andrew Girdwood, BigMouthMedia

“A good way to spot a good search marketer is to look for a digital native. Do they blog, are they on Twitter and is their own site well optimised?” - Andrew Girdwood, BigMouthMedia

Pe

rce

nta

ge

of

resp

on

de

nts

Is retention of search staff a problem?

Base: 100

NoYes

“Half of advertisers who said ‘yes’ to this question also answered ‘yes’ to finding it hard to find skilled search staff in the first place. Hinting at a disconnect in what they think they need and what they really need from a search expert.”

Jack Wallington Chair of IAB Search Council

“Half of advertisers who said ‘yes’ to this question also answered ‘yes’ to finding it hard to find skilled search staff in the first place. Hinting at a disconnect in what they think they need and what they really need from a search expert.”

Jack Wallington Chair of IAB Search Council

Search qualifications unimportant for 53%

Base: 100

Pe

rce

nta

ge

of

resp

on

de

nts

4. DATA

What data DON'T you have, that you feel would be useful for your business?

Top responses:

1. Competitor data / benchmarking

2. Conversion attribution models

3. Advanced SEO

4. Cross media influence (online and offline)

5. Specific vertical information

Base: 40

“This Barometer, the IAB’s Vertical Search Toolkits, Customer Conversion Journey study and our joint TV and Online research with ThinkBox should go a long way to address points one, two, four and five. Obviously more work needs to be done to raise awareness of these projects however, because they’re freely available on iabuk.net.” Jack Wallington Chair of IAB Search Council

“This Barometer, the IAB’s Vertical Search Toolkits, Customer Conversion Journey study and our joint TV and Online research with ThinkBox should go a long way to address points one, two, four and five. Obviously more work needs to be done to raise awareness of these projects however, because they’re freely available on iabuk.net.” Jack Wallington Chair of IAB Search Council

Clear appetite for advanced data

Yes, I have enough

Yes, but I would like

more

No, but I have some

No, I have none

Don’t know

Audience data (demographics)

33 51 13 4 7

Performance data 42 46 6 3 10

Cost parameters 40 42 13 0 11

Value attribution to multiple clicks on a user journey (last click wins etc)

21 35 24 11 17

Base: 108

When you plan a search campaign do you feel you have sufficient data on the following...

“This really encompasses the feeling of the market currently. The engines are capable of providing much data but share comparably little at the moment. They’re moving on all the time, but the sharing of more in depth consumer data will only increase the value of search as a planning and insight tool. “ - Graham Everitt, Reform

“This really encompasses the feeling of the market currently. The engines are capable of providing much data but share comparably little at the moment. They’re moving on all the time, but the sharing of more in depth consumer data will only increase the value of search as a planning and insight tool. “ - Graham Everitt, Reform

Average of 58% have insufficient data

Which web metrics are most important to your business for judging success?

Base: 105

Per

cent

age

of r

espo

nden

ts

Who owns this data internally?

Base: 103

54% don’t know who owns their search campaign intellectual property

Base: 108

Do you know who owns the intellectual property of your search campaign data?

“With many businesses now dependent on search for revenue, this is a concerning figure!” Graham EverittReform

“With many businesses now dependent on search for revenue, this is a concerning figure!” Graham EverittReform

“It’s really important that brands not only own their data but can see it raw and pure - not just through the lens of a performance deal that can obscure the true costs.” Andrew Girdwood BigMouthMedia

“It’s really important that brands not only own their data but can see it raw and pure - not just through the lens of a performance deal that can obscure the true costs.” Andrew Girdwood BigMouthMedia

5. MEASURING SUCCESS

61% of websites underperforming

Base: 107

How do you rate your website at achieving your marketing objectives?

Over a third conducting advanced website testing

Base: 103

Do you use A/B testing and Multivariate testing for your landing pages?

“Advertisers conducting both A/B and Multivariate testing were much more likely to rate their website as ‘good’ at meeting objectives. Proving how essential these practices are to successful search marketing.”

Jack Wallington Chair of IAB Search Council

“Advertisers conducting both A/B and Multivariate testing were much more likely to rate their website as ‘good’ at meeting objectives. Proving how essential these practices are to successful search marketing.”

Jack Wallington Chair of IAB Search Council

6. INTEGRATION & FUTURE

Almost a third of advertisers believe search is fully integrated

Base: 108

To what extent is search integrated with your wider marketing mix? (e.g. TV, print, outdoor, online display)

However…100% of agencies on the IAB Search Council believe all of their clients can do more to integrate search with the rest of the mix

However…100% of agencies on the IAB Search Council believe all of their clients can do more to integrate search with the rest of the mix

Do you agree with these statements?

7. SUMMARY

Summary

1. Integration opportunity - only 28.7% of advertisers said search is fully integrated with the rest of the marketing mix, yet 99% said there is a greater opportunity to integrate and 100% of Search Council agencies felt all of their clients could do more to integrate.

2. Brand building – 78% said search can build brand either directly or as part of the full user journey, reflected by actual use. 70% include brand building as a primary objective of SEO and over 50% for PPC.

3. Budget – 99% of SEO budgets and 90% of PPC budgets will stay the same or increase in 2010 (55% and 43% increase respectively).

4. Website effectiveness – only 37% of websites are ‘good’ at achieving objectives, leaving much room for improvement once consumers reach their destination.

5. Strong understanding – majority understand the main principles of SEO and PPC, but few have enough information about new or advanced tools and data.

6. Efficiency of search – cost, value and resource are clear concerns at the moment indicating a shift in advertiser attitudes to search whereby reviewing and optimising activity is currently of greater importance.

7. Intellectual property – over half of advertisers don’t know who owns their most valuable search asset, the intellectual property. Advertisers must address this immediately.