SEMPO: Social PPC is Giving Google Adwords a Run for Its Money

This post first appeared on MediaPost Search Insider on April 27, 2011.

SEMPO has released its comprehensive “State of Search” report for 2011, and there are many key findings that are of interest to practicing search marketers, search strategists and PPC media buyers, to name a few. Over 900 agencies and companies from 66 countries were interviewed for the 133-page report. SEMPO research chair Marc Englesman of Digital Brand Expressions offered some key insights on the report for MediaPost. Of the findings, it is notable that social networks have become substantial alternative PPC networks, in some cases driving higher PPC participation than the Yahoo / Bing search alliance.

“The SEMPO Report clearly shows that Facebook has rapidly become a top PPC advertising vehicle,” said Engelsman. “This may be driven in part by companies looking to quickly and easily buy their way into social media presence instead of taking the time to build their digital outposts more organically. This would follow the trend we saw in the early times of SEO when many marketers decided to forego true search engine optimization in favor of paid search as a way to get fast visibility.

“The reality of Facebook’s PPC ad growth (and to a lesser degree, the growth we are also seeing in use of LinkedIn, YouTube, Twitter and mobile) means the PPC model has expanded well beyond traditional search engines, and marketers need to understand and budget for the growing opportunities in this arena.”

He also noted a key shift from in-house, back to managed and outsourced models for a company’s search and social marketing efforts. “The reasons for this seem to be a combination of lack of time and skill levels to keep up with the fast-changing developments in SEO, paid search and social media,” he said.

The report also highlighted the following key findings:

- SEMPO estimates that the North American search engine marketing industry will grow by 16% in 2011 to a value of $19.3 billion, up from $16.6 billion in 2010.

- The emergence of the mobile internet is having a major impact on search marketing, even more than personalization. Seventy-nine percent of companies consider this development to be “highly significant” or “significant,” and this percentage has jumped 14 % since 2010.

- The utilization of social networks for marketing and media continues to grow. The percentage of company respondents who say they use Facebook now stands at 84%, up from 73% last year. Three-quarters (74%) of North American agencies say their clients run PPC campaigns on Facebook. Three-fourths of companies (75%) use Twitter for brand promotion, and more than a quarter (27%) of companies now use LinkedIn specifically for PPC campaigns.
- Only 44% of companies are now executing search engine optimization in-house, compared to 51 % last year. Only 38 % of companies are managing paid search marketing in-house, compared to 47 % last year.
- Google continues to dominate as a search engine, from both an advertiser and agency perspective, with 95% of companies paying to advertise on Google AdWords.

- “More than half of companies (54%) expect increased spending on SEO this year, while only 10% expect to spend less. On average, companies expect to spend 43% more on SEO in 2011 than they did in 2010, the same average increase as was anticipated for 2010 in last year’s survey. ”
- Social media marketing budgets are still modest compared to search engine optimization and paid search, but 64 % expect social media budgets to grow in 2011.

- Around three quarters of North American agencies (74%) and two-thirds of those outside the U.S. and Canada (69%) say their clients use Facebook for paid search.

- Of all Google features and placements, local results (55%), multiple listings (47%) and maps (42%) are considered to have the most significant impact on companies’ search performance.
- Around half of client-side respondents use location-based ads (49%) to enhance their paid search performance, while product listings and product extensions are the least used Google features.
- There has been a significant increase in the proportion of companies saying that social media activity is primarily aimed at improving customer service and satisfaction, from 8% in 2010 to 13% this year. Fewer companies than last year say social media is about generating leads (-4%), but 3% more agencies than in 2010 say this is the main objective.

Overall, the survey underscores the importance of a search marketing mindset in the changing media landscape, as well as many other key findings. Click here to obtain a full copy of the report.

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The 90:20 Budget Conundrum: Are Marketers Unknowingly Reinforcing ‘Social’ As A PPC/Advertising Channel?

This post first appeared on MediaPost Search Insider on June 22, 2011.

Since the 2011 SEMPO State of the Market Survey was released back in March, I keep revisiting this one nagging data point, one that may be a sign for the reality of future marketing endeavors across social networks, and yes, social channels (“Social PPC is Giving Google Adwords A Run For Its Money”). The survey found that social PPC has emerged as a sort of third search channel for paid media buyers, meaning that they go to Adwords, Binghoo, and also a multitude of PPC channels like Facebook, LinkedIn and Twitter to round out their media spend. This data point leaves out all debate on the efficacy of these channels, but rather underscores the point that marketers and advertisers are in fact buying media with a PPC mindset towards these channels.

The problem is that we, as marketers, may be unknowingly reinforcing social as a PPC channel, while the greater opportunity lies in participation and content publishing strategies. But as search marketers, we’ve seen this movie before, and we know how it ends. So today I want to go over a loose history of the “ppc-ification” of the search channel as a much larger strategy, and how the same path may be happening to the balance of social participation vs. advertising marketing activities.

But first let’s go back to the basis of the 90-20 conundrum in search marketing, to better understand if we in fact may be headed down a similar path for “social” as a marketing “channel.”

The problem is this: 90% of spend goes toward paid search media channels, yet it only provides 20% of the return from the search channel as a whole.

For at least 10 years now, I have at various times dragged out my own slides and data points in making the case for proper budget alignment in the search marketing channel. Over and over again, using a client’s actual spend and conversion data from both channels, I revealed an unbalanced approach to budget allocation versus actual opportunity in the search channel. In almost every single historical case for my own clients, the spend is lopsided in terms of investment versus the potential for short- and long-term benefits from the channel.

I’ve since taken the liberty and rounded it off to the 90:20, meaning that for most marketers, 90% of their search marketing spend goes towards paid search, yet it may only represent 20% of the opportunity and return they are currently getting from the channel. Paid search may only represent 20% of the clicks. It may only represent 20% of the conversions, and 20% contribution to the bottom line. Conversely, only 10% of search budget may be going towards natural, yet it is generating 80% of the revenue or desired actions. This is true for marketers who may be getting anywhere from thousands to billions of dollars in return out of the search channel as a whole. Sure there are exceptions, but this remains the case for most enterprise and SMB marketers.

The purpose of my argument here is not to debate what the actual %ages are – it varies too much from marketer to marketer, anyway – but to shed further light on a fact that many of us know all too well, that paid search media is already maxed out for many marketers, while natural allocation has achieved only the tip of its true potential. Again, 90:20 is not a set ratio for every situation, but I rounded it off for this article to illustrate a greater point.

So why does this problem exist? If most searchers are clicking on the natural results, why don’t marketers shift more spend into natural search, or earned marketing approaches? The answer is simple:

Paid search makes it too easy for lopsided budget allocation. (Stay with me here — I’m getting to the point about social budget allocation).

Paid search is quick, and relatively easy to get started with. Most marketers don’t understand natural search and earned media, and they have organizational challenges with implementation. They do not measure the benefits of an earned media program in months or years, but rather as “what have you done for me lately,” meaning today, this week, and this month for paid search. Marketers have numbers to report, and they want to see the results right now to justify the channel upstream.

So for all of the evangelization and education, for all of the search conferences, for all of the columns and blogs read, all of the forums frequented, marketers still find themselves in this short history of the search marketing channel in an upside-down, disproportionate position of throwing 90% of search budgets at paid media. Make no mistake about it – I am not an SEO apologist, but rather an advocate for balanced allocation in the search channel as a whole, especially when the benefits are to the client, and also the consumer and searcher.

Which brings us back to the 90:20 “social” allocation conundrum.

My question for marketers is this: Has frustration with the difficulty of “social media optimization” as an earned effort (and its parallel to SEO) driven them to social PPC and advertising as a quick way to get involved in the channel and be “social,” even if it is paid media?

Again, my concern here is that the greater opportunity of social is participatory and earned, but with the rise of Social PPC and advertising, the trend seems to be that marketers are focusing on it as yet another paid channel. Are marketers somewhat unknowingly reinforcing this view, simply because social engagement is harder? Is it the “advertising” mindset that somewhat disintegrates all media efforts away from “earned,” and into “bought”?

I don’t have the answer right now, but I would say that this is one to watch. Based on my long experience in search marketing, I would say that a 90:20 ratio for paid versus participatory/earned spend appears to be where social media marketing is indeed headed.

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SES San Jose 2008, SEMPO Institute Training session

Back in Big D after almost a week at the Search Engine Strategies conference in San Jose.  I was there to co-present an eight hour session on the SEMPO Insititute’s Insider’s Guide, along with SEMPO Institute dean Terry Plank, and MSN’s Jorie Waterman.   

One other highlight was attending the Google Dance at Google headquarters in Mountain View.  The theme was “Glow in the Dark”, and the place was very lit up by night fall.  There must have been at least three thousand people there.  I took some interesting pics on my phone, and I will get those posted soon.

I also had the opportunity to judge the first SES awards.  Overall, a great show.

My interview with the Dallas Morning News

I was recently interviewed by the Dallas Morning News for a front page story in the May 18, 2008 Sunday Jobs section.  The writer covered the DFW SEM Association, SEMPO organization, and also how DFW is becoming one of the top national areas for SEM talent.