SEO can have an amazingly positive impact on the fortunes of businesses, especially those who rely on their website as a key sales channel. As an SEO firm this is something we regularly see and it’s very gratifying.

However, despite the real difference a well thought out & executed SEO campaign can make to a business, it won’t work miracles! It’s not a universal panacea that will make a business successful – if the core basics of the business are flawed, getting your website SEO’ed won’t magically fix things. As the old saying goes, you can’t make a silk purse out of a sow’s ear.

Whenever we get asked to do SEO work for businesses in this situation we decline, suggesting they first address the fundamental flaws in their website, business model etc. Only then can we help them. Taking money for doing SEO work when you know it won’t help a client is unethical & plain wrong.

We only want to work for clients where we know we can make a positive difference.

PJ Fusco has written a great article about this in Clickz called ‘SEO can’t fix stupid‘.  Worth reading.

In a recent posting I celebrated the fact NZ online advertising spend continues to grow & that paid search is now the major component.

However compared to Australia, NZ is still well behind the curve in terms of adopting online marketing.

According to latest IAB figures NZ online spend accounts for only 8% of total advertising spend, whereas in Australia it is around 25%.

The difference in the NZ & AU markets is very obvious when paid search spend is examined.

• In NZ paid search for the year ending June 09 was only NZD$67 million (36% of total online spend).

• In stark contrast paid search spend for the same period in Australia was AUD$884 million (49% of total online spend).

• Reduced to a per capita basis, Australian paid search spend is AUD $42 per person. By comparison NZ’s is only AUD $13.  So proportionately the Aussies are spending 3 x more than we are in NZ.

Damn, I hate it when the Aussies beat NZ!

A lot of ad agencies have been resistant to paid search, despite its unquestionable effectiveness when compared to other media. I think there are a number of factors for this:

Commission (or lack of)
Google PPC media charges are non-commission bearing & this would have to be the number one reason most agencies have actively ignored search until now. The view many seemed to have was that every dollar spent on search effectively cost them lost commission they could earn on traditional commission-bearing media. As a result media plans that should have included search didn’t, or at best it was token.

Obviously the advertising world remuneration structure is changing dramatically. Ad agencies are having to adapt & come up with alternative charge models, such as a transparent management fee on top of media charges.

Measurability
Search is highly measurable & some cynics suggest that not all agencies have liked the associated accountability this brings.

Skills Shortage
There’s a shortage of truly skilled search marketing practitioners in NZ, as there is in other markets. Google have done a great job making the AdWords interface relatively easy to use & training agency staff. However running complex search campaigns takes significantly more time & effort than most agencies realise. As a result many struggle to make money from paid search compared to other ‘set & forget’ type media.

Client Ignorance
Until recent times search has been a relatively arcane subject & many clients simply weren’t aware of the benefits of search. This has changed & smart marketing managers are increasingly demanding that media plans from their agencies feature a decent search component.

The good news is that things are gradually changing & increasingly agencies are being compelled to factor search into the media mix. This sea change is clear when you look at the latest IAB figures which show advertisers are shifting spend online & a major part of this is search.

According to IAB, New Zealand television ad revenues were down 13.3% for the first half of 2009 compared to the same period last year. In stark contrast online advertising grew 7%. Online represented 8.3% of all NZ adspend in 2008, and given the current trends, IAB expect it to exceed 10% for the full 2009 year.

One of the key drivers in this growth has been paid search. It’s now the biggest online advertising channel & as at Q2 paid search accounts for 36.3% of all online spend (up 26.14% on the same period last year).

The IAB expects growth in paid search to continue and eventually account for about 50% of online spend, as in other more developed markets like Australia & UK.

Love it or loathe it, advertising agencies really can no longer ignore search. As a result many ad agencies have either been trying to develop skills in-house to manage paid search campaigns (not as easy as it sounds), or have decided the better path is to partner with independent specialist agencies like SureFire Search (shameless plug). An example of this is Ogilvy who use SureFire to provide search marketing services to their clients.

NZ marketers are finally realising the value of search marketing.

Latest figures from the IAB show online advertising spend continues to grow & that paid search is now the biggest online marketing channel in NZ.

Hallelujah!

At last we’re starting to catch up with other markets where 50% or more of online spend is invested in paid search.

There are plenty of good reasons for this level of investment. Here are 3:

1. Traffic from search engines – by definition, people actively interested in finding out more about your company & products – is highly valued by marketers. These visitors are more engaged than other site visitors, viewing more than twice the number of pages per session & spending twice as much time onsite.
2. Search engines are now seen by users as an arbiter as to the sites – and brands – of value. In one study by Yahoo! & Compete, 61% of users responded that they expect brand leaders to consistently appear in the top search engine results.
3. In their annual polling of marketers as to the most effective forms of offline & online advertising, both eMarketer and MarketingSherpa have consistently concluded that, along with email marketing, SEO & Paid Search Marketing are the strongest tactics producing the best Return on Investment (ROI).

In summary, the reason marketers are increasingly investing in search is simple – it works! And very cost effectively compared to other channels.

If you’re not doing it yet, maybe it’s time you gave it serious consideration. Your competitors probably are…