SEMPO (Search Engine Marketing Professional Organization) recently released its “The State of Search Engine Marketing 2004” report, summarizing trends in the SEO industry for last year. According to the survey, online advertisers spent over $4 billion for search engine marketing in 2004.
Of this amount, $3.3 billion was spent on Paid Placement ads such as Google AdWords or Overture. Organic SEO captured a mere $500 million, though 90-percent of the advertisers say they engage in both Paid Placement and SEO.
So, why is more money being spent on Paid Placement than on SEO? I believe the simple answer is that Paid Placement cost more – a lot more. The reason advertisers are spending only one-sixth of the money on SEO is because SEO provides a much greater ROI.
The most often stated reason that companies turn to SEO Firm is because they want to reduce or eliminate their Pay Per Click (PPC) campaigns. With the cost of PPC keywords rising so rapidly, many small-to-medium size firms simply do not have the budgets to compete with larger firms. Turning to a company such as SEO Firm helps even out the playing field by competing in the organic listings instead of PPC.
Most likely the trends from 2004 will continue throughout 2005 as well. Advertisers state they are willing to spend up to 33-percent more on their keywords for PPC campaigns this coming year. At some point though, advertisers will get weary of continuing to pay the big bucks with no end in sight and focus more on their organic listings as revenue generators.
