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Video and mobile search is sparking the interest of North American search engine marketers

March 1, 2007

WAKEFIELD, Mass. (rushprnews ) 03/01/2007 -- Video and mobile search is sparking the interest of North American search engine marketers but they want to pay the same, or less, for these largely untested platforms, as they do for traditional search, according to the annual industry survey conducted by the Search Engine Marketing Professional Organization (SEMPO), www.sempo.org. For the first time, SEMPO has collected data on the business potential of targeted video and mobile search advertising.

Video Search

An emerging type of new media where no one wants to pay. Where have we heard that before? Cable TV, the first three years of PPC search -- these frontier technologies all experienced initial skepticism in the marketplace. Now they are part of the essential fabric of our economy. Video and mobile search will go through the same evolution.

According to the survey results, two in five respondents say they want to pay the same for video search as they pay for traditional search advertising. Another 13% say they want to pay less than for traditional search. Of the remainder who have some willingness to pay a premium, most would prefer to pay 20% or less as a premium.

SEMPO reports 66% of the respondents say they would be interested in contextually targeted advertising attached to video search results. However there is much more interest in video advertising attached to video search results as opposed to strictly text-based contextual ads. Some 53% say they are interested in video ads compared to 33% who indicated an interest in text only.

Mobile Search

There is even greater reluctance to pay a premium for mobile search. The SEMPO survey reports that almost half of the respondents will not pay any premium for mobile search. Almost 25% say they prefer to pay less for mobile search than for traditional search. Similar to video search, of those who are open to a premium, 20% is the cap.

The SEMPO report also shows 60% of the respondents are interested in contextually targeted advertising delivered to mobile search users.

Pricing Plateau

The reluctance to hike budgets for video and mobile search reflects the industry’s trend toward an overall pricing plateau, based on survey respondent feedback. SEMPO’s survey found that 25% of the respondents reported they had reached their pricing ceiling for paid placement, and of the remaining 75%, half said the most they could afford in a price increase was 30% or less.

“These numbers make sense,” says Kevin Lee, member of the Board of Directors of SEMPO and chair of its Research Committee. “They show that the search engine marketing industry has become more sophisticated, and thus keyword efficiency is at an all-time high.” However, Lee notes, the industry continues to grow, as evidenced by SEMPO’s report which shows advertisers spent $9.4 billion on search engine marketing (SEM) in 2006, a 62% increase over 2005 spending. SEMPO researchers also estimate SEM spending to double by 2011, at an aggregate total of $18.6 billion.

Speaking to the video and mobile search data, Lee says, “An emerging type of new media where no one wants to pay. Where have we heard that before? Cable TV, the first three years of PPC search – these frontier technologies all experienced initial skepticism in the marketplace. Now they are part of the essential fabric of our economy. Video and mobile search will go through the same evolution.”

SEMPO’s report, “The State of Search Engine Marketing 2006,” is based on an industrywide survey of 587 respondents – both agency and in-house advertisers – conducted in November and December 2006 by Radar Research, LLC and Intellisurvey. The report includes data on spending trends in paid placement, paid inclusion, organic search engine optimization (SEO) and SEM technology platforms.

About the Search Engine Marketing Professional Organization (SEMPO)

SEMPO is a global non-profit organization serving the search engine marketing industry and marketing professionals engaged in it. Its purpose is to provide a foundation for industry growth through building stronger relationships, fostering awareness, providing education, promoting the industry, generating research, and creating a better understanding of search and its role in marketing. SEMPO represents the common interests of more than 450 companies and consultants worldwide and provides them with a voice in the marketplace. SEMPO’s education and outreach initiatives are sponsored in part by Microsoft, Yahoo!, Google, Verizon Superpages.com, Atlas, and Search Engine Strategies. For more information, or to join the organization, please visit http://www.SEMPO.org.

About Radar Research, LLC

Radar Research is a Los Angeles-based research and consulting firm aimed at the nexus of media, technology, culture and commerce. It was founded by two former Jupiter Research analysts, Marissa Gluck and Aram Sinnreich. Radar conducts research on behalf of both corporate clients and non-profit organizations, such as DoubleClick, Sony Pictures Entertainment, Nielsen//Netratings, the Online Publishers Association and The Norman Lear Center. For more information, please visit www.radarresearch.com.

About IntelliSurvey, Inc.

IntelliSurvey helps organizations, including leading research firms and in-house researchers, make better business decisions by gathering intelligence from their customers, members, and prospects. For more information, please visit www.IntelliSurvey.com.

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