Search Marketing Yearly Spend Soars!

Paying to drive visitor search traffic and push up site rankings appears to have once more been favoured by UK companies backing short term ROI over long term organic listings and establishing social media presence.

According to a new Search Engine Marketing report of more than 500 companies and agencies, UK firms have been increasing their investment in paid search and SEO over the last 12 months, even though lack of internal resources is the biggest problem affecting the success of marketing strategies by this method.

The findings show that almost half of UK businesses (49%) are now spending at least £50,000 a year on paid search marketing, up from 45% last year and 39% in 2008, while there has been a significant decrease in the proportion of those who spend less than £5,000 a year on paid search, from 25% last year to 14% this year.

The focus by business owners, together with their website design and marketing agencies, on search engine optimisation, shows to have intensified as figures indicate SEO spending has undergone similar increases. The percentage of companies spending at least £50,000 a year on SEO has climbed slightly from 20% last year to 22% this year. The equivalent figure in 2008 was 16%.

The percentage of companies planning to raise pay per click budgets again in 2011 is up from 45% to 52%, with increased SEO spending to rise from 55% in 2009 to 60%.

Despite the increased levels of spending on PPC and SEO, around 40 per cent claimed lack of resources prevented their online marketing campaigns from being as successful as they could have been. In addition, nearly a third complained of lack of performance with poorly converting websites.

Not surprisingly, the vast majority of companies (83%) are paying to advertise on Google, though this has fallen slightly by 2% since last year. The use of Yahoo has declined sharply, from 44% last year and 49% in 2008 to just 36% this year. Meanwhile, use of Bing has increased by 4%, with 34% of companies using Microsoft’s search engine for PPC campaigns.

Despite the increasing widespread use of the key social media services such as Twitter and Facebook, the reticence by business owners to truly understand its potential for developing long term brand identity is reflected in the relatively modest budget spends compared to SEO and PPC. More than half of companies (57%) are spending less than £5,000 annually on this global messaging medium.

However, a large proportion( 65%) of companies stated they were planning to increase their spending on social media marketing over the next 12 months, with over half planning to boost social media budgets by more than a fifth, while 15% are planning to increase their social media spending by more than 100%.

Once again, the biggest factor preventing further investment appeared to be, according to 64 percent, the inability  to measure ROI from social media marketing as effectively as they would like.

As the mobile internet revolution continues and a variety of ‘tablet’ platforms emerge to propel the online conversation beyond static deskbound PC search behaviours, there is a real danger that many businesses will be left on the sidelines through lack of audience engagement.