UK companies have ramped up their investment in paid search and SEO this year as the economy has emerged tentatively from recession, according to research published today.

The proportion of companies saying they plan to increase spending on search engine optimisation (SEO or natural search) over the next year has increased to 60% from 55% last year.

Pay-per-click search advertising is also buoyant, with 52% of companies planning to raise their budgets for paid search over the next 12 months compared to only 45% who said they would do so in 2009.

While the majority of companies are increasing their search budgets, only 14% said they are planning to decrease their paid search spending and only 4% plan to spend less on SEO.

The UK Search Engine Marketing Benchmark Report, published by Econsultancy in association with digital agency Guava for the fourth year running, is based on the largest annual UK survey of search marketers and is regarded as a bellwether for the search industry.

Econsultancy’s UK Research Director Linus Gregoriadis said: “Search marketing was pretty resilient during the recession but there has nonetheless been a marked increase in both SEO and paid search investment this year.

“Companies continue to report an increased media cost for paid search, and in particular for Google AdWords, but this has not stopped the majority of companies increasing their Google investment. Sixty per cent of company respondents said they are investing more on Google than they were a year ago, compared to only 10% who are spending less.”

More than two thirds (69%) of search advertisers using Google say that prices for the keywords they routinely bid on have gone up in the last year. An even higher proportion of agencies (71%) say this is the case.

The research, based on a survey of 500 client-side marketers and agencies, also found that 65% of companies are planning to increase their spending on social media marketing over the next 12 months, an increase from 48% in 2009.

Search marketers are increasingly focusing on social media marketing because of the opportunities to increase traffic and links.

More than half of companies (56%) are planning to boost social media budgets by more than 20%, while 15% are planning to increase their social media spending by more than 100%.

Guava Sales Director Martin Dinham said: "We are pleased to see that the SEM Market is holding up as, even in a difficult economic climate, businesses recognise that SEO and PPC continue to deliver return on investment.

“There are also some interesting sub trends identified, notably the rise of social media and the high proportion of paid search users who continue to rely on manual management of their campaigns. We hope that the marketplace finds this fourth year of the report useful."

Other key findings:

-) The vast majority of companies (83%) carrying out search engine marketing pay to advertise on Google, although this figure has dropped 2% since last year. Use of Yahoo has declined more sharply, from 44% last year (and 49% in 2008) to 36% this year.

-) Microsoft, which launched Bing last year, has fared better. Just over a third of companies (34%) now use its search engine for paid search compared to 30% last year.

-) The vast majority of companies (81%) now market themselves on Twitter, making this the most widely used social media website for marketing and putting it slightly ahead of Facebook (78%). The proportion of companies who say they use Twitter for marketing has increased massively from 49% last year, and just 3% in 2008.

-) Less than half of companies (45%) carrying out paid search marketing are using a third party bid management technology for their PPC activity.

The full Econsultancy / Guava UK Search Engine Marketing Benchmarking Report 2010 is available for download at:

http://econsultancy.com/reports/uk-search-engine-marketing-benchmark-report

Email or call Linus Gregoriadis for a complimentary copy of the report and / or further information.

Email: linus.gregoriadis@econsultancy.com

Tel: + 44 (0) 20 7269 1465 or + 44 (0) 7956 5645713.

About Econsultancy

Econsultancy is the leading source of independent advice and insight on digital marketing and e-commerce. Our reports, events, online resources and training programmes help a community of over 80,000 registered marketers make better decisions, build business cases, find the best suppliers, look smart in meetings and accelerate their careers.

Join Econsultancy today to learn what’s happening in digital marketing – and what works.

Call us to find out more on +44 (0)20 7269 1450 or contact us online.

http://econsultancy.com

About Guava

Guava is a fresh thinking, highly energetic digital marketing agency with over 200 employees and offices in the UK, Denmark and Sweden.

Guava offers considerable expertise across the spectrum of digital communication, including Search Marketing (SEO and Paid Search) Web Development and Social Media. Guava currently works with clients including Confused.com, Argos, Homebase and The Royal Mail.

For more information about the search engine marketing services provided by Guava, please contact Martin Dinham on 0870 0630707 or email uk@guava.com.

For more information please visit http://www.guava.co.uk/

Published on: 11:19AM on 4th June 2010