Only 25 percent of search marketers use sophisticated bid strategies and measurement techniques, and those who do are more likely to be old-timers, big spenders and direct marketers. That’s according to JupiterResearch’s newly released semi-annual search marketing survey.
After surveying 538 marketers in August 2004, the researchers divided respondents into two categories — “Sophisticates” and “Unsophisticates.” Sophisticates bid on keywords based on historical data or cost of goods sold, and measured performance at the keyword or keyword group level. Only one in four marketers fell into the Sophisticates group, with the other three failing to use what JupiterResearch calls “intelligent” bidding and measurement techniques.
One of the main factors dividing the two groups was experience. Most of the “Sophisticates” had been doing search marketing between 2.5 and 3 years.
“There will be a lot more sophistication in the marketplace as new marketers gain tenure online,” said Nate Elliott, an analyst for JupiterResearch, which shares a parent company with this publication. “As they continue to gain experience and get better at search marketing, they become more sophisticated.”
Elliott and the other analysts also found larger marketers are more likely to use sophisticated bidding and measurement techniques. Thirty-three percent of Sophisticates had total marketing budgets of more than $1 million, when both online and offline spending were included. Only 17 percent of Unsophisticates had that large of a budget.
Direct marketers were more likely to be Sophisticates, the researchers found. Categories that tend to do more direct marketing, such as retailers, financial services companies, communications firms and education providers were more likely to fall into the Sophisticates category. Those that didn’t do as well include computer companies, travel companies, healthcare companies and professional services firms. JupiterResearch pegged these categories as traditionally reliant on branding-oriented techniques.
Other characteristics associated with Sophisticates include the use of more search engines and the use of more keywords. Thirty-nine percent of Sophisticates buy more than 1,000 keywords, compared to just 14 percent of Unsophisticates, the research found.
Elliott believes the eventual growth of Unsophisticates into Sophisticates will bring more rationality to the search marketplaces, because bidders that measure results intelligently are more likely to make appropriate, profitable bids.
“The industry needs more sophistication at the individual marketer level,” said Elliott. “If they’re not bidding properly, that doesn’t make any sense for the marketplace. That’s a bad thing for the marketer and a bad thing for the industry.”
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