Marketing Sherpa – Search Marketing Benchmark Guide 2008

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

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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