March 20, 2012

Marketing Research Chart: Allocation of online marketing dollars

SUMMARY: A website is commonly referred to as “the hub” as all lead generation activities, whether inbound or outbound, drive traffic back to the site. However, as the number of online tactics continues to grow, how will organizations allocate their online marketing budgets to accommodate these numerous tactics?

This week’s chart reveals the answer to this question, from a survey of more than 1,500 search marketers.
by Kaci Bower, Senior Research Analyst

PPC and website take biggest shares of online marketing budget

Q. What percentage of your online marketing budget is allocated to each of the following online tactics (including personnel, media and other direct costs)?

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Paid search, website management and design, and search engine optimization are the top three tactics to which organizations designate online marketing dollars.

Organizations devote one-quarter of their online marketing budgets to their websites. Even the best marketing efforts are for naught if the website is not optimized (in terms of performance and design) to communicate the “offer” and trigger a “response.”

Paid search also comprises 25% of the budget. Because SEO tactics often take time before having an impact on search rankings, many organizations use paid search to supplement SEO efforts.

Paid and organic search can work well together as a means for establishing authority on a search engine results page. Further segmenting the data, we found B2C organizations allocate more than half of online marketing dollars to PPC and SEO, which is more than their counterparts with primary business channels.

Advertising on social networks is gaining traction, particularly when viewed in light of the budget allocations of other tactics in this list. Companies focused on both business and consumer channels allocate nearly 10% of online marketing budgets to this area.

Organizations advertising in this arena need to bear in mind that social media users are focused on social interactions, unlike searchers who are seeking relevant information to a query. For this reason, social media ads may work better when they do not attempt to drive traffic off the social media platform, but instead aim to attract and engage fans.

PPC is the biggest area of investment for organizations of all sizes. Medium and large organizations direct 28% of online marketing budgets into this tactic, whereas small organizations set aside 24%.

Along with PPC, search engine optimization is another big area of investment for small organizations. On average, these organizations earmark 22% of online marketing dollars for SEO. They also designate a greater percentage of online marketing budgets for content marketing, a strong complementary tactic to SEO. Search engines index content, while people share content, making content good for an organization’s SEO efforts.

For additional research data and insights about PPC, download and read the free Executive Summary from the MarketingSherpa 2012 Search Marketing Benchmark Report – PPC Edition.

Useful links related to this chart

Marketing Research Chart: Biggest budget increases expected in inbound marketing

Marketing Research Chart: Tried-and-true tactics rank high in B2B marketing budgets

Marketing Research Chart: SEO budgets for 2012

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