SEARCH ENGINE MARKETING 2007 - BUYER'S GUIDE

Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 1 Other related E-consultancy reports: Search Engine Optimisation Best Practice Guide http://www.e-consultancy.com/publications/seo-guide/Paid Search (PPC) Best Practice Guide http://www.e-consultancy.com/publications/paid-search-marketing-ppc-bestpraccticeguide/E-consultancy /Neutralize UK Search Engine Marketing Report http://www.e-consultancy.com/publications/search-engine-marketing-report-2007/SEO – Request for Proposal template http://www.e-consultancy.com/publications/sem-seo-rfp-request-for-proposal/PPC Advertising – Request for Proposal template http://www.e-consultancy.com/publications/sem-ppc-rfp-request-for-proposal/SEO Business Case http://www.e-consultancy.com/publications/sem-seo-business-case Paid Search Marketing Business Case http://www.e-consultancy.com/publications/sem-ppc-business-case Search Engine Marketing A Buyer’s Guide E-consultancy August 2007 Copyright © E-consultancy.com ltd 2007 – not for distribution to nonsubsccriber without written permission Table of Contents Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 2 1. Introduction Error! Bookmark not defined. 2. Executive Summary Error! Bookmark not defined. 3. The Market Error! Bookmark not defined. 3.1 Market Definition and Focus of Report ....................Error! Bookmark not defined. 3.2 UK Market Value and Growth...................................Error! Bookmark not defined. 3.3 Drivers of Growth and Market Trends .....................Error! Bookmark not defined. 3.4 Return on Investment case for Search Engine MarketingError! Bookmark not defined. 3.5 Strengths, Weaknesses, Opportunities and Threats (SWOT)Error! Bookmark not defined. 4. Costs and Pricing Models Error! Bookmark not defined. 4.1 Different Fee Structures ............................................Error! Bookmark not defined. 4.2 Cost of SEO ...............................................................Error! Bookmark not defined. 4.3 Cost of Paid Search ...................................................Error! Bookmark not defined. 5. Tips and Pitfalls -Finding the right supplier Error! Bookmark not defined. 5.1 What type of SEM? ....................................................Error! Bookmark not defined. 5.2 What kind of service is most suitable for your company?Error! Bookmark not defined. 5.3 What type of agency are you looking for?.................Error! Bookmark not defined. 5.4 Do you fully understand your own role and potential internal barriers to success?Error! Bookmark 6. Market Positioning Charts Error! Bookmark not defined. 6.1 Explanation for Chart 1 – Business Focus ................Error! Bookmark not defined. 6.2 Explanation for Chart 2 – Type of Service (Part 1)...Error! Bookmark not defined. 6.3 Explanation for Chart 3 – Type of Service (Part 2) ..Error! Bookmark not defined. 6.4 Explanation for Chart 4 – Company Culture............Error! Bookmark not defined. 7. Search Engine Marketing Services Matrix Error! Bookmark not defined. 8. Supplier Marketplace and Profiles Error! Bookmark not defined. 8.1 Advertising.com – Company & Service Details ........Error! Bookmark not defined. 8.2 Barracuda Digital – Company & Service Details ......Error! Bookmark not defined. 8.3 Bigmouthmedia – Company & Service Details.........Error! Bookmark not defined. 8.4 ClickThrough Marketing – Company & Service DetailsError! Bookmark not defined. 8.5 DBD Media – Company & Service Details................Error! Bookmark not defined. 8.6 dgmSearchLab – Company & Service Details ..........Error! Bookmark not defined. 8.7 DoubleClick – Company & Service Details ...............Error! Bookmark not defined. 8.8 eConversions – Company & Service Details.............Error! Bookmark not defined. 8.9 Efficient Frontier – Company & Service Details ......Error! Bookmark not defined. 8.10 Greenlight – Company & Service Details................Error! Bookmark not defined. 8.11 High Position – Company & Service Details ...........Error! Bookmark not defined. 8.12 I-Spy – Company & Service Details ........................Error! Bookmark not defined. 8.13 Latitude – Company & Service Details ...................Error! Bookmark not defined. 8.14 Leapfrogg – Company & Service Details.................Error! Bookmark not defined. 8.15 MediaCo – Company & Service Details...................Error! Bookmark not defined. Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 3 8.16 NetBooster – Company & Service Details...............Error! Bookmark not defined. 8.17 Netizen Digital – Company & Service Details .........Error! Bookmark not defined. 8.18 Netrank – Company & Service Details....................Error! Bookmark not defined. 8.19 Neutralize (*\*) – Company & Service Details .......Error! Bookmark not defined. 8.20 Optimize – Company & Service Details..................Error! Bookmark not defined. 8.21 Propellernet – Company & Service Details .............Error! Bookmark not defined. 8.22 Receptional – Company & Service Details .............Error! Bookmark not defined. 8.23 Relevant Traffic – Company & Service Details.......Error! Bookmark not defined. 8.24 Site Visibility – Company & Service Details ...........Error! Bookmark not defined. 8.25 Spannerworks – Company & Service Details .........Error! Bookmark not defined. 8.26 Steak Media – Company & Service Details.............Error! Bookmark not defined. 8.27 Stickyeyes – Company & Service Details ................Error! Bookmark not defined. 8.28 Summit Media – Company & Service Details ........Error! Bookmark not defined. 8.29 Tamar – Company & Service Details ......................Error! Bookmark not defined. 8.30 The Search Works – Company & Service Details...Error! Bookmark not defined. 8.31 Vertical Leap – Company & Service Details............Error! Bookmark not defined. Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 4 1. Introduction E-consultancy’s buyer’s guides are the ideal starting place for anybody researching new service providers in interactive market sectors. They contain in-depth vendor profiles, to help you quickly evaluate suppliers, as well as market analysis to help you put things into perspective. Vendors/service providers are selected for the report based on a combination of factors, not limited to but including: • Analysis of capabilities (services /products) • Clients and Partners • Experience (qualifications /trade bodies /case studies /client lists) • Expertise (by sector /topic), • UK status (a UK office is preferred, occasional exceptions are made) • Ability to take on and fulfil new projects • Recommendations from trusted sources (or anecdotal evidence to the contrary) • Google visibility • Business model (a high % of turnover should be related to these services) • Company website E-consultancy does not explicitly recommend any of the suppliers featured in these guides, principally because it is impossible for us to work with all of them to form a firsthaan opinion. But we do believe -based on an intensive and careful selection process -that the chosen service providers represent quality. Buyer’s Guides are updated on an annual basis, so the information contained within is recent and thus valid. Send any questions or comments to Linus Gregoriadis, head of research (linus@e-consultancy.com). 1.1 About E-consultancy E-consultancy is an online publisher of best practice internet marketing reports, research and how-to guides. E-consultancy, named Publisher of the Year at the 2006 AOP Awards, also publishes buyer’s guides and has a directory of 100,000+ third party internet marketing white papers. E-consultancy has more than 100 events lined up for 2007, including roundtables and monthly Supplier Showcases, where six suppliers pitch to an audience of pre-qualified buyers at a Central London venue. E-consultancy has 53,000 registered users and more than 145,000 unique users sessions per month (audited by ABC Electronic). It is popular among internet professionals because of its time-saving advice and insight. The company also provides a range of public and in-house training programmes, such as seminars and workshops. http://www.e-consultancy.com/about/Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 5 E-consultancy: The UK market for Search Engine Marketing will be worth an estimated £2.22bn in 2007, up 58% from 2006. 2. Executive Summary Although the stunning growth rates seen in previous years are no longer apparent, the search market remains extremely buoyant, with UK spending on paid search continuing to increase at more than 50%. We expect the SEO market to surpass paid search in terms of spending growth this year, albeit from a much smaller base. The primary driver for this growth is simply due to the fact that more and more marketers are recognising the benefits of paid search and SEO. Valuation summary: • The UK paid search market will reach £1.97bn, up 56% from the previous year. • Spending on SEO will increase 68% to just over £250m, around 11% of the overall search market. Trends within this market include: • Increased focus on organic search. • Greater ‘savviness’ about paid search ROI. • More complexity and integration with other marketing channels. • Sector consolidates as agencies seek broader range of skills. • New platforms offer further growth potential. 2.1 Further Reading E-consultancy publishes reports, hosts events and organises training to help companies work smarter and get the best out of the web. Some related reports include: • Search Engine Optimisation (SEO) – Best Practice Guide http://www.e-consultancy.com/publications/seo-guide/• Paid Search Marketing – Best Practice Guide http://www.e-consultancy.com/publications/paid-search-marketing-ppc-bestpraccticeguide/• E-consultancy /Neutralize UK Search Engine Marketing Report http://www.e-consultancy.com/publications/search-engine-marketing-report-2007/• SEO – Request for Proposal template http://www.e-consultancy.com/publications/sem-seo-rfp-request-for-proposal/Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 6 • PPC Advertising – Request for Proposal template http://www.e-consultancy.com/publications/sem-ppc-rfp-request-for-proposal/• SEO Business Case http://www.e-consultancy.com/publications/sem-seo-business-case • Paid Search Marketing Business Case http://www.e-consultancy.com/publications/sem-ppc-business-case Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 7 3. The Market 3.1 Market Definition and Focus of Report This report, which is an updated version of our 2006 Search Engine Marketing Buyer’s Guide, covers both search engine optimisation (aka SEO, organic search, or natural search) and paid search (aka PPC, paid listings, or pay-per-click). Search Engine Marketing (SEM) is about making your product, services or brand visible to searchers and using relevant content to attract visitors to your site. • SEO involves a variety of techniques, such as link-building and site optimisation, which are used to improve your natural search engine rankings (i.e. the listings on search engine results pages which are not paid for). • Paid-search marketing is the process of using paid-for -or sponsored -listings to make your product, services or brand more visible on search engines. The Buyer’s Guide is aimed at those who want to learn more about the UK marketplace for Search Engine Marketing, with an analysis of the key trends and challenges within this rapidly developing sector. Many of these trends are relevant for organisations outside the UK. Ideally, this report should be read in conjunction with our Search Engine Optimisation (SEO) – Best Practice Guide and Paid Seach Best Practice Guide, which contain comprehensive practical guidance around SEM. A key part of this buyer’s guide is the Supplier Marketplace and Profiles section (Section 8), which contains profiles of agencies providing SEO and/or paid search services. Please note that this Buyer’s Guide contains profiles of agencies rather than the search engines themselves. Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 8 3.1.1. Who do we profile in this report? Each of the 31 agencies profiled in Section 8 offers Search Engine Marketing (SEM) services and meets the criteria explained above in the Introduction. We have not included suppliers whose offering is restricted to a technology platform (i.e. for bid management and/or for tracking). Most of the featured suppliers focus exclusively on SEM but we have also included some agencies with a broader service offering which includes search. The suppliers with a wider proposition have only been included if they generate significant revenue from Search and are deemed to have sufficient expertise in this area. The profile for each supplier makes it clear what proportion of revenue comes from Search Engine Marketing, and how this is split between SEO and PPC. Agencies do not pay E-consultancy to be included in buyer’s guides. Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 9 3.2 UK Market Value and Growth E-consultancy: The UK market for Search Engine Marketing will be worth an estimated £2.22bn in 2007. The UK search market remains extremely buoyant and we forecast that it will grow by 58% during the year, up from £1.41bn in 2006. The value of paid search will near the £2bn mark, reaching around £1.97bn, up 56% from the previous year. The SEO market will increase 68% to just over £250m, surpassing paid search in terms of growth for the first time. Our estimate is bullish even though we expect the growth rate to be slower than in 2006, when the overall search market grew by around 65% to a value of £1.41bn. Notes on methodology: We have made our calculations after interviews with executives from Search Engine Marketing agencies as well as analysis of turnover figures where they have been made available. The executives we have consulted are all senior figures within the industry (i.e. managing directors, marketing directors and technical directors) working at some of the largest agencies within this market. Our valuation for 2007 reflects the total amount of money that is spent on Search Engine Marketing in the UK, including media spend and money spent on agency services such as paid search management and SEO. The vast proportion of our topline market valuation is in fact media spend on Paid Search. Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 10 3.3. Drivers of Growth and Market Trends 3.3.1 Increased focus on organic search While the paid search market in the UK continues to grow rapidly, the last few years have also seen brands spending more on developing their organic search presence. E-consultancy estimates that paid search accounts for around 89% of the overall search market in the UK, and that it grew at a faster rate than SEO (67% compared to 50%) in 2006. However, our figures indicate that SEO spending is increasing more quickly than paid search spending in 2007, albeit from a much smaller base. The main drivers behind this trend are as follows: • Increased competition and keyword inflation Paid search holds many advantages over SEO as a medium for advertisers, including the fact that results can be predicted more accurately and generated more quickly. For campaigns like charity appeals, where immediacy is required, paid search is a better fit than the longer-term play of SEO. But increasing competition has seen click costs reach a level in many sectors where there is little or no margin for advertisers, and where investment in SEO has become a more attractive proposition. Rosie Freshwater, director of Leapfrogg, says companies are “far more willing to allocate their marketing budget to natural SEO, rather than the instant gratification of PPC. More companies are seeing the benefit of long term SEO campaigns to build an established presence over a period of time.” 3.4 Return on Investment case for Search Engine Marketing Investment in Search Engine Marketing can offer businesses a range of advantages ranging from highly tangible revenue increases to softer benefits such as improved brand perceptions. Effective SEM can help you … Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 11 3.5 Strengths, Weaknesses, Opportunities and Threats (SWOT) This section is a ‘SWOT’ analysis of the market for search engine marketing. It also serves as a summary of some of the points made above. 3.6.1 Strengths • Growth in Search Engine Marketing remains strong as this form of marketing continues to attract increasing levels of investment from businesses, as the benefits become more widely understood. o The prevalence of broadband means internet usage continues to grow. o More people are searching for goods and services on the internet. 4. Costs and Pricing Models 4.1 Different Fee Structures This sub-section is taken from our SEO Best Practice Guide in which we outline different fee structures employed by SEO agencies. 1. Consultancy basis based on day rates up to an agreed maximum, e.g. £3,000 per month. With this approach regular review meetings are required so the client can determine they are getting value for money. 2. Results-based… • SERPs position. • Volume (traffic number). • Volume (traffic costs). • Sales /Cost (CPC). • Return on investment. Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 12 5. Tips and Pitfalls -Finding the right supplier 5.1 What type of SEM? In order to identify the right SEM provider for your business it is important to understand that different companies have different types of expertise and experience. So, in order to get the right fit with your own organisation, the first step is to identify exactly what SEM services you need, according to your short-term and long-term business goals. The detailed company profiles and market positioning charts contained in this guide will help you to find the right match. This section contains some key questions and considerations to keep in mind -and some pitfalls to avoid. Our SEO Best Practice Guide and Paid Search Best Practice Guide are also essential reading to help you in a number of relevant areas including find the right supplier, managing your resources internally and pulling together an RFP. These separate RFP proposal documents, again available to E-consultancy subscribers, are also worth consulting: SEO – Request for Proposal template http://www.e-consultancy.com/publications/sem-seo-rfp-request-for-proposal/PPC Advertising – Request for Proposal template http://www.e-consultancy.com/publications/sem-ppc-rfp-request-for-proposal/Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 13 6. Market Positioning Charts 6.1 Explanation for Chart 1 – Business Focus The vertical axis of this chart indicates to what level the agency provides a full SEM service as distinct to focusing solely on one particular area. The horizontal axis indicates whether an agency sees itself as specialising more in SEO or paid-for services. For example, a position in the top left of this chart indicates a supplier who can provide you with a full SEM service (SEO and paid-for) but specialises in SEO approaches. Focus on particular area(s) of SEM Offer Full SEM Service Specialists in Site Optimisation Approaches Specialists in Paid For Approaches Where we are now Where we are going Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 14 6.2 Explanation for Chart 2 – Type of Service (Part 1) The vertical axis of this chart indicates the extent to which an agency offers automated approach to SEO as distinct from fully manual optimisation and submission. The horizontal axis shows the extent to which an agency’s approach requires input from a site development team. A position in the bottom right of this chart therefore indicates a vendor with a manual optimisation and submission service, but one requiring little input from your site development team Manual Optimisation and Submission Fully Automated Approach Require little or no input from site developers Require significant input from site developers Where we are now Where we are going Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 15 6.3 Explanation for Chart 2 – Type of Service (Part 2) The vertical axis of this chart shows the level to which an agency offers real time versus retrospective reporting. The horizontal axis reveals an agency’s ability to offer tracking of search visitors through to a point of purchase. A positioning on the top right of this chart shows an agency offering real time reporting, tracking search traffic through to the point of purchase, ultimately offering the opportunity to evaluate ROI on an ongoing basis. Retrospective Reporting Real-time Reporting Report Solely Through Positions Achieved Ability To Track Search Traffic Through To Sales Where we are now Where we are going Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Buyer’s Guide: Search Engine Marketing (2007) Copyright © E-consultancy.com ltd 2007 – not for distribution to non-subscribers without written permission 16 6.4 Explanation for Chart 4 – Company Culture The vertical axis of this chart shows the company's preferred working style in terms of whether they are more process-oriented or flexible and ad hoc. The horizontal axis shows the agency’s size relative to its rivals in the market place. 7. Search Engine Marketing Services Matrix Flexible, ad hoc approach Predictable and process-driven Small compared to competitors Large compared to competitors Where we are now Where we are going Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007 Sample only, please download the full report from: www.e-consultancy.com/publications/search-engine-marketing-buyers-guide-2007