Search spend to increase 25% in 2007

New research indicates a large growth spurt for search engine marketing throughout 2007. More than 25% of companies with annual revenues over $50 million say they plan to increase their search spend by 25% or more this year.

by Kristina Knight

According to the report, from Jupiter Research, another 28% of companies say they will increase search spending between 11% and 25% as keyword prices continue to rise.

Why is such large growth expected this year? Keyword inflation is the main cause, according to lead report writer Kevin Heisler. “Because marketers with large companies anticipate including major search engines as part of their branding campaigns, they realize this tactic could result in additional expenses and are planning accordingly,” he said. “But the additional cost is just one of the challenges faced by marketers today.”

Other cost influencers include campaign management and tracking costs. However, the cost of keywords is likely the biggest factor behind the increases. From 2005 to 2006, the cost of the average keyword rose 4% YOY, however, in Q3 2006, a sharp increase of 16% was noted in keyword prices.

"Advertisers can mitigate the price increases by managing their Search Marketing initiatives more aggressively through technology and analytics," said Dean DeBiase, Chairman and CEO of Fathom Online. "The ability to monitor, measure and adjust is more important than ever to improve return on investment.”