SEM Spending

Internet Retailer released results from a survey regarding Internet companies and their involvement in Search Engine Marketing. The article reveals that companies are engaging in more pay per click advertising than natural search engine marketing. However, the survey reports that companies feel that natural search engine optimization converts better than PPC. Companies are definitely taking notice of the importance of search engine optimization and the effects it can have on a company’s bottom line.

Search Engine Optimization is critical for many online businesses. In fact, 30.2% of retailers that were surveyed claim that SEO is responsible for 50% or more of their company’s sales. An interesting fact, three quarters of companies that practice search engine optimization manage their program in-house. The majority of respondents also say that they have no plans to outsource their search engine optimization efforts.

Pay per click advertising can be a slippery slope with many failures compared to few successes. Companies can advertise for months, all the while losing money with sub-par conversion rates. Research and trial and error are the two most effective ways to figure out how to advertise with PPC successfully. One quarter of respondents claim that they bid on less than 50 words, while 15% bid on 10,000 words or more. Over 50% of companies surveyed that use PPC have conversion rates of 4% or less and only 7.8% of companies convert at over 15% using PPC.

Search Engine Optimization is clearly a very important piece of an online company’s puzzle, but it still isn’t clear if natural search or paid search is more effective. An optimal mix of natural and paid search will increase revenues, but only if researched and planned well. Google is the search engine that companies should be focusing on as they address the highest level of traffic and offer the highest potential return on investment.