Article | MarketingSherpa

Jun 17, 2008

Article

New Chart: Is Paid Search Getting Too Expensive?

SUMMARY: Search marketing continues to show good ROI despite rising costs. And those marketers who enhance their knowledge of analytics will see their investment in both, search engine optimization and paid search, yield positive returns.

In our latest chart, we break down the value for SEO and PPC marketing and answer the question: Is paid search becoming too expensive?

New Chart: SEO & PPC Marketing Continue to Improve ROI
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Click here to see larger, printable version of this chart

This week’s chart shows the improving return on investment for organic search (SEO) and pay-per-click (PPC) marketing. It comes straight from Sherpa’s upcoming Search Marketing Benchmark Guide 2009.

For years, Sherpa has asked marketers to gauge the ROI of search using the scale above. Recently, there has been an expectation that the needle for PPC would drop because of rising costs. That hasn’t happened so far.

Let’s look at SEO first. One-fifth of respondents called SEO their “strongest tactic” for ROI – up 3 percentage points from 2007 to 21%. Also, “good ROI” jumped 2 points to 38%. More importantly, we see a 6-point drop (28%) in those who call the results of SEO “hard to gauge.” That’s a direct result of the proliferation and integration of analytics.

Smart marketers have moved beyond the basics of top referral pages. They are looking deeply into how traffic is generated and how that traffic differs by source. For many, traffic driven by natural search converts at a higher rate than any other.

Paid search also fared well in this year’s benchmark research. The number of marketers calling it their “strongest tactic” dropped a couple of points, but the percentage designating it as having “good ROI” rose markedly by 7 points (20%). This was the result of two shifts: a drop in those who found search a “low value” tactic as marketers either improved or eliminated their paid search spending; a drop in those who find it “hard to gauge.”

Key takeaway: Knowledge trumps rising costs in search. Marketers who are devoted to understanding their analytics and have the discipline to keep learning will continue to see positive returns from their search investment.

Useful links related to this article

Not a Subscriber to Sherpa’s Chart of the Week? Click Here to Get a New Chart Delivered to Your Inbox Every Tuesday!
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Sign Up for New Newsletter for Search Marketers: SherpaSearch Is Coming June 26:
http://www.marketingsherpa.com/page/Search-Marketing-Ne
sletter-2008

Be notified when the 2009 Search Marketing Benchmark Guide is released:
http://www.sherpastore.com/Search-Marketing-Benchmark-2
09.html

More Research Data from Sherpa:
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earch

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New Chart: Is Paid Search Getting Too Expensive?

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