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April 11 2007

Marketers see Google's dominance as a risk

Google continues to take the biggest share of the search engine marketing budget from UK company with most companies rating the search engine as the best for return on investment. However, more than half believe that Google has an unhealthy dominance of the UK search engine marketplace and that its dominance represented a risk of some sort (albeit a low risk in some cases).

Some 80% of company respondents who expressed a preference in a survey conducted for E-consultancy's UK Search Engine Marketing Report 2007 said they rated Google as the best search engine for return on investment compared to 11% for MSN and 8% for Yahoo!. Some 22% of company respondents said that Google's dominance was "a risk" and 9% said it was a "high risk".

Linus Gregoriadis, E-consultancy's Head of Research, said: "Google's dominance in the marketplace is seen as a two-edged sword. On the one hand, the fact that Google generates such a high proportion of the search volume means that many advertisers feel they can focus their efforts on this search engine with good returns.

"On the other hand, an over reliance on Google is seen as a potential risk to businesses. Many advertisers would like to see more competition from the other search engines."

Another issue for companies is rising click costs. Some 44% of UK company search marketers said this was significantly impacting their return on investment from search, compared to a quarter of respondents (22%) who said that this was not an issue.

Despite this, for paid search, half of respondents who know their return on investment say they are getting returns in excess of 300%. Just under a quarter of respondents (22%) say they are getting an ROI of 500% or more.

For SEO, the returns can be even greater. Two thirds of respondents (68%) are getting a return in excess of 300%. Some 40% of respondents are getting a return of 500% or more.

As far as budgets are concerned, some 56% of UK respondents said that their companies spend more than £10,000 annually on paid search, while a quarter of UK respondents reported spending of more than £100,000 annually. Most companies have budgeted to spend more over the next year.

Other key findings of the research were as follows:

  • Just under half of respondents (48%) said that their companies carry out paid search exclusively in-house. Some 57% of companies do SEO exclusively in-house.


  • The four paid search services most commonly used by companies using agencies are as follows: Keyword research (50%); ROI tracking and analysis (47%); Automated bid management (33%); Landing page optimisation (31%).


  • The four SEO agency services which responding companies are most likely to be using are as follows: Position monitoring (41%); Keyword research; (40%); Search strategy definition (36%); Site technical audit (34%).


  • On average, company respondents say that they spend 32% of their total marketing budget on online marketing. On average, they spend a third of their online marketing budget on Search (32%).


  • On average, 61% of search engine marketing budget is spent on paid search and 33% is spent on SEO.


  • Overall, respondents believe that SEO is more important than PPC in terms of impact on brand.


  • According to company respondents, lack of internal resource is the biggest problem preventing success for both paid search and SEO.


    • Emma Herrod

    This article is tagged as: Google e-consultancy UK Search Engine Marketing Report 2007

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