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5 Reasons to Double Your Search Budget

  |  September 14, 2012   |  Comments

When you dig into the SEMPO State of Search 2012 study and overlay it with some of the changes going on in the ecosystem today, you may find that you can build a strong case to double your overall search and social budget, including PPC search, PPC social, SEO, and earned media social.

SEMPO is predicting that search will continue to grow a robust rate of approximately 19 percent overall. You may want to dig into the survey, however, to see how your opinions and priorities on search marketing and its importance to your company stack up with your competition. If you’re a member, you can download the SEMPO State of Search study for 2012 for free (if not, a great reason to become a member). Prior year studies are free to the public.

When you dig into the SEMPO study and overlay it with some of the changes going on in the ecosystem today, you may find that you can build a strong case to double your overall search and social budget, including PPC search, PPC social, SEO, and earned media social.

As a bit of history, along with others on the SEMPO research committee, for several years, I used to field the study along with a variety of research vendors (currently eConsultancy is the co-producer of the SEMPO study). My prior involvement and the fact that my firm manages millions in PPC spend monthly, and recently acquired a full service digital shop (Inceptor) provides me with a unique lens through which to access the report, the data and the evolution of the ecosystem.

A big challenge for marketers large and small this time of year is figuring out how large a budget to set aside for digital media overall, and then how to slice up that budget between earned and paid media (for example paid search vs. SEO investment), as well as for specific initiatives (Facebook, Twitter, LinkedIn, et al.).

My recommendation: go big. Ask for double the budget you would ordinarily ask for. There are lots of reasons, some of which are supported by the SEMPO study; others are outlined below using history as a guide to predicting the future.

The survey confirmed that getting appropriate budgets remains a challenge for SEM and online marketing teams and may in fact be more challenging than ever before. The SEMPO report stated:

“Getting budget for [SEM, social] ticked up as a challenge by between 5 and 11 percentage points. This appears to be an issue for the smaller organizations in the sample, but is interesting for its juxtaposition with overall positivity for digital budgets in general and SEM in particular.”

I see this as related to the perception among many SEM professionals that they should significantly ramp up their social media presence (both earned media social, which often is a catalyst to better SEO ranking due to links and perhaps even direct algorithmic effect and paid social media advertising). That leads us to our reasons and rationale that budgets should be doubled, not raised by a paltry 19 percent.

1. SEM & Social Spending Helps SEO & Earned Media Social

Google and Bing algorithms are all about measuring relevance signals for SEO ranking. Your other marketing generates interest and that often manifests itself into “Buzz” and PR within the social media ecosystem and blogosphere. That buzz reinforces your SEO strategy.

2. Everyone Else is Raising Budgets

If you want to beat the competition, you have to spend smarter and occasionally spend more as well. Let’s assume that you’ve spent the last few “lean years” learning how to spend smarter (although I certainly see evidence every day that some of you haven’t). Given that according to SEMPO your competition are ramping up, you should consider ramping up more than them. The SEMPO report states:

“Digital continues to be a bright spot in marketing, and within it, SEM and social shine. A whopping 86% of respondents predict digital budget growth, up from 77% in 2011, with 37% calling that growth “significant.”

Remarkably, only 4 percent predict a reduction in digital budgets.

3. You Need the Flexibility to Raise Budgets as the Ecosystem Changes

Retailers are getting a huge surprise this holiday season as Google launches PLA/Shopping in full force within the SERP. Every indication is that this will result in a greater volume of paid clicks as a percentage of total eCommerce searches, meaning that existing budgets arrived at in the beginning of the year will likely be 20-30 percent too low. Many retailers are scrambling to find budget because the ROI will be there. I wouldn’t be surprised to see similar rollouts that impact other industries from Google or Bing.

4. Tablets and Mobile

If your site is finally mobile ready, there will be a steady increase in mobile clicks from Apple devices. Plus, with the release of Kindle and other tablets, the incremental tablet and mobile search traffic will be significant. You may not see the in-device conversions on the smaller smartphone devices, but tablet conversion rates are often similar enough to the desktop and laptop rates that they justify the spend. If you’re willing to attribute influence, which you can’t easily measure, even smartphones may belong in your plan.

5. Attribution & Holistic Marketing Mix Models

Regardless of how you currently manage search, display, and social across the many devices, one thing is clear: last click attribution doesn’t fully capture the value of media, and that even includes the PPC search where last click is often found. The more you look at your data and apply best practices in marketing mix models, the more you have to spend. One reason is that you often can’t reduce your PPC bids because if you do that, your positions put you at a huge disadvantage at the last, most-important click.

So, as you prepare for Q4 and next year, get the biggest budget you can. You’ll probably need it.

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ABOUT THE AUTHOR

Kevin Lee

Kevin Lee, Didit cofounder and executive chairman, has been an acknowledged search engine marketing expert since 1995. His years of SEM expertise provide the foundation for Didit's proprietary Maestro search campaign technology. The company's unparalleled results, custom strategies, and client growth have earned it recognition not only among marketers but also as part of the 2007 Inc 500 (No. 137) as well as three-time Deloitte's Fast 500 placement. Kevin's latest book, "Search Engine Advertising" has been widely praised.

Industry leadership includes being a founding board member of SEMPO and its first elected chairman. "The Wall St. Journal," "BusinessWeek," "The New York Times," Bloomberg, CNET, "USA Today," "San Jose Mercury News," and other press quote Kevin regularly. Kevin lectures at leading industry conferences, plus New York, Columbia, Fordham, and Pace universities. Kevin earned his MBA from the Yale School of Management in 1992 and lives in Manhattan with his wife, a New York psychologist and children.

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