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The effectiveness of Google is unrivalled in the Search marketplace but there is a high level of concern among businesses about the search engine's unprecedented power, according to new research.

The UK Search Engine Marketing Report, published by E-consultancy and Neutralize (*\*), has highlighted the dominance of Google over its main competitors.

The overwhelming consensus of opinion following a survey of more than 700 internet marketers (including both agency and company respondents) is that Google is the best search engine across a range of criteria including return on investment, quality of traffic and pay-per-click management tools.

For return on investment, Google is rated as the best search engine by 80% of company respondents compared to 11% for MSN and 8% for Yahoo!.

Google is reaping the benefits of a thriving market ... and so are its business customers, according to the research.

Six out of 10 marketers are planning to increase both their paid search and natural search budgets over the next 12 months, a higher percentage than for any other digital marketing channel.

Among those who know their returns from Search, half of respondents are getting an ROI of more than 300% from PPC. For natural search, two thirds of respondents are getting returns of more than 300%.

On the face of it, everything seems to be rosy in the search engine marketplace (unless, of course, you are one of Google's competitors struggling to erode its market share).

However, there are warning signs for Google that its growing dominance is not a reason for unbridled celebration. (And these findings are even more pertinent in the light of its recent acquisition of DoubleClick).

Just over half of UK company respondents (54%) believe that Google "has an unhealthy dominance of the UK search engine marketplace".

And some 60% of  company respondents said that its dominance represented some kind of a risk (made up of 9% who said it was a "high risk", 22% who said it was "a risk" and 29% who said it was a "low risk").

It is also worth noting that 43% of company search marketers said that rising click costs were significantly impacting their ROI from Search. Increasing CPC costs are a natural result of the sector becoming more competitive but the perception remains for many businesses that Google is eating into their profits.

Ashley Friedlein, E-consultancy's CEO, has previously written about how an addiction to Google can be dangerous for companies.

It is clear from our research that many companies would welcome increased competition in the marketplace and these sentiments are likely to become stronger as Google continues to dominate not just search engine marketing, but digital marketing as a whole.

Its foray into pay-pay-action marketing, its launch of Google Analytics and Google Checkout and, most recently, its acquisition of DoubleClick, will all serve to increase concern that it has too much influence and dangerous level of knowledge about what both businesses and consumers are doing.

Google is spreading its tentacles far and wide but this research serves as a reminder that it is through its uncomplicated Search proposition that it has grown into such a powerhouse.

It will be interesting to see whether Google can maintain its overwhelming pre-eminence in the search marketplace now that Yahoo! and MSN have launched improved Search platforms. Watch this space. 

The E-consultancy / Neutralize (*\*) UK Search Engine Marketing Report (available to subscribers) has findings on the following topics:

  • Type of search activity and search services
  • Search budgets
  • Objectives and effectiveness
  • Search engines
  • Search problems and issues
Linus Gregoriadis

Published 16 April, 2007 by Linus Gregoriadis

Linus Gregoriadis is Research Director at Econsultancy. Follow him on Twitter or connect via LinkedIn or Google+.

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