Investment shifting from PPC towards SEO

According to eMarketer, spending on paid media worldwide will grow 5.7% this year and total US$542.55 billion. Not surprisingly, Google has the largest share of digital ad revenue – eMarketer estimates Google has 30.9% share of net digital ad revenue, whereas Facebook comes second with 12%. In terms of just search ad revenues, Google’s domination is even greater, with 55.2% share.

With these sorts of statistics, it’s easy to think only in terms of Google AdWords when it comes to search marketing.

However, it appears that increasing numbers of NZ businesses are starting to take their foot off the gas pedal when it comes to investing in Google AdWords. A comment we frequently hear is that it’s starting to get too expensive for many businesses.

AdWords is effectively an auction — as more businesses use it the competition increases and this drives up average cost per click prices. As a result, advertisers can end up paying more money for less and less traffic over time.

Engaging a specialist search agency which uses smart bidding tactics, rather than simply following Google’s standard advice to increase bids and budgets certainly helps, but for many advertisers there’s no denying that AdWords is getting more expensive. As a result, they are starting to focus attention on alternative ways to attract visitors to their websites.

In line with this, there was a report published this week by Borrell Associates which looked at total expenditure on digital marketing services in the US.

USA marketing spend

According to the report, US businesses spend almost twice as much on Digital Marketing Services ($613 B) as they do on advertising ($325B).

“Digital Marketing Services” encompasses things like website building, web hosting, SEO, reputation management, online ad production, online ad campaign management, app development, email marketing, and social media management.


Expenditures on things such as hosting, site design, and ad-management fees have slowed and instead more money is being ploughed into SEO, mobile media, and social media management.

What we found interesting was Borrell’s assertion that 87.5% of “online marketing support” is SEO-related spending and that total SEO spending will be just over $65 billion this year, growing to nearly $80 billion by 2020.


Why should you care?

Clearly the above relates to the US, a more mature online market than NZ. As such, it’s an indicator of what’s likely to eventually happen here and investment in SEO by NZ businesses will also increase.

If your search marketing strategy has been limited by just using PPC advertising it may be time to seriously consider augmenting this with SEO – particularly if AdWords is starting to get too expensive.

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About the Author Mark Sceats

Mark is a Partner and Senior Consultant at SureFire which he founded back in 2002. Prior to establishing SureFire he worked for KPMG Consulting. Today Mark heads up SEO, embracing the challenges that can come with complex website implementations. Outside of work, his interests beyond his family are running, snowsports, diving and fishing (badly).

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