Paid Search: New Study Reveals Industry Growing Pains

Large search marketers seeking new technologies -- 92% willing to spend an average of 22% more on SEM programs when key impediments are removed, according to a new research report

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Search marketing has become a strategic imperative for many companies, but the lack of technology and infrastructure to support search marketing poses a serious problem for advertisers looking to grow their PPC spend. This represents a potential Achilles heel for search industry growth

San Francisco, Calif. (PRWEB) October 15, 2008

Even as the global economy falters, spending on paid search advertising remains on a growth trajectory, expected to reach more than $26.8 billion by 2011. New data shows the largest search marketers would spend even more if they could, according to a recent study by JupiterResearch, a Forrester Research company, commissioned by Marin Software. The data reveals that 92% of large search marketers would increase their pay-per-click (PPC) spend an average of 22% if major technology and management impediments were resolved. Since large search marketers account for the lion's share of industry spend projections, this equates to billions of incremental paid search dollars ready to be unlocked over the next five years as enabling technologies gain greater penetration in the market.

These are among the key findings in "Large-scale Paid Search: Challenges and Opportunities", a study that examines different aspects of the paid search advertising market and is based on a survey of large search marketers, spending at least $50,000 per month on PPC advertising.

"While paid search market growth remains strong, our research shows that the industry has matured to a point where new technologies and approaches are needed to support and evolve large search marketing programs," said Kevin Ryan, search industry marketing expert and chief executive officer of Motivity Marketing. "Next-generation search management applications are now hitting the market and quickly gaining in popularity, which should facilitate increased spending at the company level and drive additional growth in the search industry as a whole."

Other findings of the industry report include:

Search Marketing is Becoming Increasingly Complex

  • 85% of marketers responded that the complexity of paid search management is growing.
  • 44% said that running a well-managed, large-scale search marketing campaign is more difficult than running an election campaign for public office.

Search Marketers Would Spend More if They Had the Right Technology

  • Respondents said they would spend an average of 22% more on paid search advertising if they had access to the tools and techniques they need to manage larger paid search programs.
  • 92% of companies would increase PPC spend if key impediments were resolved in PPC management.
•Many search marketers manage all aspects of their search campaigns through Microsoft Excel rather than through one single solution; 77% said their paid search campaigns would be more effective it they could manage them all from one application.

Marketers Spending More than $500K Per Month Are Having the Most Trouble

  • 78% believe managing large keyword lists is cumbersome.
  • 59% cite they currently have insufficient personnel to manage their paid search campaigns.
  • 69% said existing applications are not robust enough for their needs.

In spite of these challenges, search marketing remains a top priority for marketers. Some 79% of respondents are spending more on paid search management every year, and the majority of advertisers (67%) reported that increasing the use of PPC campaigns is a top strategic initiative going forward.

"Search marketing has become a strategic imperative for many companies, but the lack of technology and infrastructure to support search marketing poses a serious problem for advertisers looking to grow their PPC spend. This represents a potential Achilles heel for search industry growth," said Marc Barach, chief marketing officer of Marin Software. "The next wave of paid search growth will rely on large advertisers using professional second-generation applications to manage the complexity of their PPC programs, so they can cost-effectively grow their program spend without requiring added resources."

About Marin Software
Marin Software provides an enterprise-class paid search management application for advertisers and agencies. Marin Software's "No Black Box" methodology offers serious search marketers unprecedented control and transparency over their SEM programs. Marin Search Marketer® addresses the workflow, analysis, and optimization needs of large-scale advertisers and agencies, saving time and improving the financial performance. Marin offers pay-as-you-go pricing and is designed for those who are spending at least $50,000 monthly on paid search. Customers include Avenue A | Razorfish, a division of Microsoft (Nasdaq: MSFT), Zappos.com, and ZipRealty (Nasdaq: ZIPR). Marin is backed by Benchmark Capital and Amicus Capital.

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