Paid Placement'
Let me preface this report by citing advertisers in 2004 have spent 4 Billion
dollars on search engine marketing according to (SEMPO) the Search Engine
Marketing Professional Organization.Let me preface this report by citing
advertisers in 2004 have spent 4 Billion dollars on search engine marketing
according to (SEMPO) the Search Engine Marketing Professional Organization.
Website marketers cited Search engine positioning was the top method to drive
traffic to their sites (66%), followed by email marketing (54%). Source: Direct
Marketing Association. Accordingly, the most cost effective way to market your
web site online is to obtain several top 10-search engine rankings in the major
search engines for your keywords. According to a recent Jupiter Research Survey,
searching on the search engines is one of the main uses of the Internet among
79% of users. Source: September 2002 Jupiter Research Survey. So that being the
case, whatever your promoting youll want to make sure it can be found on the
first page of the search engines results page.The reason is numerically simple.
An Iprospect Survey in 2002 reported that 78% of web users abandon their search
if the first 3 pages don't provide an answer to their question, and 28% dont
scroll past the 2nd page of results. Source: Media Post article reporting
results of Spring 2002 IProspect survey.Combine those facts with the Internets
explosive growth rate of 1.8 Million people worldwide going online every week
for the very first time, Source: Official Guide To Internet Promotion and you
can soon appreciate what a top 10 ranking can mean to you. Google receives
approximately 39.4% of all search engine traffic. Yahoo receives approximately
30.4%. Theyre simply the largest search engines being utilized online today.
Bringing up the rear is MSN at 29.6%, and AOL 15.5% then Ask Jeeves with 8.5%.
Source: Nielsen//NetRatings January 2004How much traffic is that? Well, Google
and its partner sites were reporting a whopping 250 million searches a day in
February 2003. Overture and its partners were reporting over 167 million
searches per day. Inktomi reported 80 million followed by LookSmart with 45
million per day. FindWhat reported 33 million while Ask Jeeves reported 20
million, Alta Vista reported 18 million and finally Fast reported 12 Million
searches per day. Source: Searchenginewatch.com 2004.With all said, you can
easily see how your search engine rankings are directly proportional to the
traffic your web site receives, and your site traffic is directly related to
your potential to profit online. Oh, and in case your wondering how much money
is spent online; a recent Forrester Research Report indicated that online
spending reached $95,700,000,000 million in 2003! That's a cool 95.7 billion
dollars. Projected online spending is estimated to grow to $229 billion in 2008!
A whopping 139% increase in online spending! Source: Forrester ResearchNow with
these facts in mind Im confident you can clearly see what a top 10-search engine
ranking can mean for your bottom line. Although it does leave a question
unanswered in my mind, what has a higher ROI organic search engine optimization
or paid search?According to SEMPOs key analysis, the U.S. & Canadian SEM
Industry Size Estimate by tactic in 2004, organic SEO accounted for 12% of the
market share or $492,057,200 while Paid Placement accounted for $3,341,878,176
or 81.8%.Interestingly, 9 out of 10 respondents are actively engaged in organic
SEM marketing programs accounting for 89% of the respondent advertisers. This
trend can be contributed to the average cost of popular keywords continuing to
escalate. If the escalation continues to rise it could make paid search engine
advertising exponentially cost prohibitive for all but the largest advertisers
the 900lb gorillas!Simply put, ROI is outpacing inflation: SEMPOs key analysis
indicates advertisers could afford to pay on average 33% more for their keywords
and remain profitable, while they say prices have gone up 26% on average in the
last 12 months. Thats leaves a 7% advertising margin to maintain current profits
for 2005!SEMPOs data also noted that advertisers will get smarter about managing
their paid placement programs before they cut back on spending.This is also
consistent with a report released by Nielsen/NetRatings indicating that the
growing demand for search engine advertising is outstripping the supply of
currently available advertising space.These findings seem to indicate the
inventory of keywords is approaching a critical demand problem however; most
advertisers felt they still have some degree of price flexibility in their paid
placement programs before they will reach the threshold of diminishing returns.
Is there any wonder why organic search engine positioning has gained popularity
for online marketers in 2004? Could it be higher (ROI) return on investments?
SEMPO also cites that 43% of advertiser respondents have shifted their budgets
away from other marketing programs for Organic SEO.So what does it all mean? Let
the numbers speak for themselves. Organic SEO is undeniably gaining favor over
the lower ROI paid advertising. This is evidenced by virtue of the fact that
paid advertising is becoming less profitable. Although paid advertising will
continue to hold a large portion of the market share, as paid advertising
returns diminish and keyword costs soar my early 2005 forecast is for the
materialization of a progressive organic SEO market trend to facilitate the need
for advertising space. ABOUT THE AUTHOR Lawrence Deon is an SEO/SEM
Consultant and author of the popular search engine optimization and marketing
model Ranking Your Way To The Bank. http://www.rankingyourwaytothebank.com
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