Six out of 10 companies are planning to increase their search engine marketing budgets in the next 12 months, according to a report by E-consultancy and Neutralize (*\*) which has highlighted the continued buoyancy of the Search marketing industry.

The UK Search Engine Marketing Report 2007 contains a comprehensive analysis of the UK Search environment following a survey or more than 700 internet marketers carried out in March 2007.

The research, the most comprehensive UK-based study of its kind, found that 60% of UK companies are increasing their budget for paid search in the next 12 months. Over the same period 62% will be making more investment in search engine optimisation (SEO) to increase natural search engine visibility.

Some 56% of UK respondents said that their companies spend more than £10,000 annually on paid search (i.e. sponsored listings). A quarter of UK respondents (25%) reported spending of more than £100,000 annually.

The overwhelming consensus from survey respondents was that Google is the best search engine across the following five criteria: return on investment, quality of traffic, volume of traffic, customer service and PPC management tools.

Some 80% of company respondents who expressed a preference said they rated Google as the best search engine for return on investment compared to 11% for MSN and 8% for Yahoo!.

However, the survey results were not all good news for Google.

More than half of UK company respondents (54%) believe that Google has an unhealthy dominance of the UK search engine marketplace and 60% said that its dominance represented a risk of some sort (including low risk).

Some 22% of company respondents said that Google’s dominance was “a risk” and 9% said it was a “high risk”.

Linus Gregoriadis, E-consultancy’s Head of Research, said: “Google’s dominance in the marketplace is seen as a two-edged sword. On the one hand, the fact that Google generates such a high proportion of the search volume means that many advertisers feel they can focus their efforts on this search engine with good returns.

“On the other hand, an over reliance on Google is seen as a potential risk to businesses. Many advertisers would like to see more competition from the other search engines.”

Another issue for companies is rising click costs. Some 44% of UK company search marketers said this was significantly impacting their return on investment from search, compared to a quarter of respondents (22%) who said that this was not an issue.

Despite this, for paid search, half of respondents who know their return on investment say they are getting returns in excess of 300%. Just under a quarter of respondents (22%) say they are getting an ROI of 500% or more.

For SEO, the returns can be even greater. Two thirds of respondents (68%) are getting a return in excess of 300%. Some 40% of respondents are getting a return of 500% or more.

Despite this success, the survey also revealed a lack of measurement around return on investment (ROI). Four out of ten company search marketers (43%) do not know their ROI from paid search and 61% do not know their ROI from Search Engine Optimisation, the survey has shown.

The number of respondents who are not effectively tracking their ROI from search engine marketing outweighs the number of people who are doing so, both for paid search and for SEO.

Lucy Cokes, Managing Director of search agency Neutralize (*\*), said: “It is very reassuring seeing the continued positive attitudes towards search engine marketing in the UK and the great returns people are achieving, also the increased investment both paid and organic search will receive.

She added: “It is clear there is still progress to be made in terms of tracking and analysis, and quantifying the return on investment against other marketing methods.”

Other key findings of the research were as follows:

-) Just under half of respondents (48%) said that their companies carry out paid search exclusively in-house. Some 57% of companies do SEO exclusively in-house.

-) The four paid search services most commonly used by companies using agencies are as follows: Keyword research (50%); ROI tracking and analysis (47%); Automated bid management (33%); Landing page optimisation (31%).

-) The four SEO agency services which responding companies are most likely to be using are as follows: Position monitoring (41%); Keyword research; (40%); Search strategy definition (36%); Site technical audit (34%).

-) On average, company respondents say that they spend 32% of their total marketing budget on online marketing. On average, they spend a third of their online marketing budget on Search (32%).

-) On average, 61% of search engine marketing budget is spent on paid search and 33% is spent on SEO.

-) Overall, respondents believe that SEO is more important than PPC in terms of impact on brand.

-) According to company respondents, lack of internal resource is the biggest problem preventing success for both paid search and SEO.

The full E-consultancy / Neutralize (*\*) UK Search Engine Marketing Report 2007 is available for download at:
Journalists can email or call Linus Gregoriadis for a complimentary copy of the report and / or further information.
Tel: + 44 (0) 207 681 4051 or + 44 (0) 7956 5645713.
About E-consultancy
E-consultancy is an online publisher of best practice internet marketing reports, research and how-to guides. E-consultancy, named Publisher of the Year at the 2006 AOP Awards, also publishes buyer’s guides and has a directory of 100,000+ third party internet marketing white papers.

E-consultancy has 50,000 registered users and more than 145,000 unique users sessions per month (audited by ABC Electronic). It is popular among internet professionals because of its time-saving advice and insight.

About Neutralize (*\*)
Neutralize (*\*), the sponsor of this research, is a search engine marketing agency based in the UK, specialising in enterprise Search Engine Optimisation and advanced Pay Per Click Management.

Its rapidly expanding team is dedicated to providing top quality services to those companies serious about their success online.

They are a Google Qualified Company and Google Enterprise Partners, dedicated members of the Nominet Steering Committee and members of the Search Marketing Association (UK).

For more information about the search engine marketing services provided by Neutralize (*\*) please contact Martin Dinham on +44 8700 630707 or email

Published on: 12:00AM on 11th April 2007