How Much of Your Budget Are You Re-Allocating to SEM?

First thing’s first.  Despite what some people in the industry say search engine marketing, or SEM, refers to all forms of marketing, optimizing, and advertising through / to / with search engines.  Primarily that means paid search and search engine optimization plus all related disciplines and offshoots like local search, press optimization, etc.

Often people use SEM just to refer to paid search marketing, often also referred to as pay per click, or ppc (Google AdWords, Yahoo! Search Marketing, Microsoft adCenter, et al).  If I’m having a conversation with a prospective client who uses SEM that way, I’ll go along for the sake of conversation, but you, loyal reader, should know better.  Not picking on anyone here; there’s a lot of confusion around the term – even Google itself uses it this way in their AdWords testing materials.

Alright.  Now that we’re straight, let’s dive into SEMPO’s just released 2010 State of Search Engine Marketing Report, which you can buy here if you want to curl up with 112 pages and some cocoa late at night.  Here are some key findings taken from the report synopsis and MediaPost’s write-up (hence the dueling bullet point styles):

• The number of companies who engage in search engine optimization (90%) has remained steady since 2007, while the proportion of companies carrying out paid search marketing (now 81%) has increased from 78% in 2009 and 70% in 2008.

– Due to the poor economic climate, 2009 was a slow year overall, but had a significant upturn in the fourth quarter. Overall the market is estimated to grow by 14% in 2010, and reach a value of $16.6 billion by the end of this year.

– Forty-nine percent of companies have reallocated print ad budgets  to SEM; 36% have taken money from direct mail budgets; 24% are moving budgets from conferences and exhibitions; and 23% are moving from Web display advertising.

– Overall, companies expect to spend 43% more on SEO in 2010 than they did in 2009 (44 % specifically for North America) — a big rise, but slightly lower than the expected 46 % increase for 2009 when this survey was last conducted.

– More than half of the companies surveyed (52%) expect to spend more on SEO in 2010 than in 2009, while 37% of companies expect to spend more on paid search in 2010 than they did in 2009 (38 % for North America).

– Companies consider personalization to have the most significant impact on search, while agencies see the rise of local search as most significant.

On a personal level, we can confirm the above; we’re seeing more and more companies reallocating budgets from print, tv, and radio into search engine marketing and other forms of internet advertising whether for new or existing campaigns.

If you’re not already running SEM campaigns or one sort or another, the question you should be asking yourself is: “What do the other 81-90% of companies in the United States know that I don’t?“