I’m not kidding. While they might like you personally, most companies engaged in SEM are beyond disappointed with their returns, according to a new study from SEM firm [x+1].
First, the good news: Almost half of respondents—48.6%—said that the economy has had no impact on their SEM budget. And these aren’t little companies: 39% of these companies represented had a marketing/advertising budget of $5 to $10 million, and 7.5% had even more than that.
Also good: of those surveyed, 55.2% said that the champion of SEM in their company was at the director-level or above—with the CEO being the champion in 13.1% of companies.
But there looks to be quite a bit of bad news here. (I did say your clients hate you, didn’t I?). When asked how highly they’d rate their companies’ SEM performance, only 20% rated it a 6 or 7 out of 7:
Perhaps emblematic of this problem was the respondents’ ratings of their effectiveness. Of those targeting 30-100 keywords with individual landing pages, twice as many were dissatisfied or very dissatisfied with their performance:
In ranges above this, results were not much better, though fewer keywords yielded more satisfaction:
- Only 14% were satisfied or very satisfied with this capability at the 500+ keyword level. Nearly half (48%) were very dissatisfied or dissatisfied with it.
- A higher percentage (40%) were satisfied or very satisfied with their ability to optimize for 30 or fewer keywords and redirect to a pre-built landing page, an easier but less effective method.
The survey also looked at SEM conversion lift:
- 15.9% said they had not noticed a big difference in conversion rates
- 35% percent of respondents said they saw lift conversions of 5%-20% through the use of SEM
- 10.3% said they consistently saw lift rates above 20%.
This may be a case of overpromising or poor tracking, however.
If you’re thinking you’re safe because you’re in-house (or not), sad to say you’re wrong. A little under 50% of respondents were using a dedicated in-house team, while almost 40% were using an outside consultant or agency. And we’d better look out: of those surveyed, 51.4% held the SEM decision-making power in their companies—and they could be acting soon.
[x+1] did have some recommendations to improve SEM performance, especially dynamic landing pages and rule-based ad targeting. What do you think? Are their findings accurate or skewed? And will their suggestions help satisfy your clients better, or do you have a better idea?