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Fortune 500 Spending $1.2 Billion on Paid Search, Because They Can’t Rank Naturally!




Apparently Fortune 500 companies have money to burn on search marketing.

According to a new study from Conductor, only 25% of the Fortune 500’s combined targeted paid keywords–97,555 keywords, totaling a daily spend of $3.4M–ranked in the top 50 natural search results.

Think about that. These companies are collective spending $1.2 billion a year on paid search placement, yet 75% of these important keywords are not ranking organically inside the top 50 search results!

Even more staggering, only 2% of Fortune 500 domains analyzed had any significant number of search terms in the top results–which we presume means first page visibility.

When you break it down by company, only 0.6%, are achieving top 50 keyword placement. Which means that less than 1% of companies control the lion share of the  25% of keywords ranking inside the top 50! Talk about outliers!

Of course, this is one study, one snapshot of data, but it goes to show that in 2010, Fortune 500 companies still don’t have a handle on their SEO campaigns. They’d rather pay for their ignorance in search ads instead.

You can grab a copy of the report here.

  • http://www.toddmintz.com Todd Mintz

    Well, to be fair to them, they should be doing both paid and organic…

  • http://www.elixirinteractive.com fionnd

    I also think the SEO industry has some responsiblioty for our inability to educate the budget holders. As the next generation of CMO’s come along I think it will get easier as they are part of the digitial world. We ran CMO sessions at SES twice last year and very few SEO’s attended those sessions. We had panels of CMO’s not SEO’s and they were not well attended. One prominent blogger blogged that they did not see why a CMO was speaking on a panel at SES about search. The sessions were desinged to educate us the SEO community how to deal with the CMO and how to sell to them. The SEO’s want to hear from other SEO’s especially the rock stars. Great but if you cannot sell the services to the budget holders good luck!….

    I think instead of talking about why the spend is so low for organic SEO we should be putting our heads together about how to change this. Before you vote for the new SEMPO board read their BIO’s and their manifesto do not vote for anybody who does not understand that SEMPO has a responsibilioty here to as our Trade body. I see Seth whose company authored this report is running so start by voting for him since he seems to get it. And no I have never even met Seth so I am not shamlessly promoting a friend.

    • Rob

      the real rockstars dont have time to talk.

      My clients are making money, rankings grow daily, and the people that run these huge Fortune 500 companies could gain a lot by doing a simple read of this report and a Google search for an “SEO Company” then clicking onto the #1 company that does NOT use the keyword in their URL and calling 209-TOP-SEO1 to talk to me about getting the rankings they need. Now will that happen? Probably not, but until then, we are going to keep calling their competition and getting them rankings they can afford to invest in and grow with.

      Cheers,
      @RobertKafka

      • http://www.elxirinteractive.com fionnd

        Ha Ha Rob that is funny. Your’re right though since I starterd making money I have a lot less time on my hands to sit around talking about it.

  • http://www.shaneeubanks.com Shane Eubanks

    I saw this today as well and can’t say I’m surprised. What I’ve noticed is that most major corporations outsource a lot of their marketing….especially interactive marketing….to agencies, who then turn around and offer to manage big budget campaigns for various reasons that are long enough for an entire article in itself.

    In the past year, though, I have seen this shift with the down economy and tighter budgets. You are seeing people within corporations come up with better methods to increase ROI and get the most bang for the buck (more for less….right?). Because of this, SEO has become more important to increase traffic for the least amount of monetary investment.

    The faster that companies realize the importance of SEO and the positive impact in can have on their budget AS WELL as revenue, the better chance they have of dominating their “online” competition.

    Imagine how strong major corporations (or anyone for that matter) could be if they moved their money from paid search to seo.

    I’ll put it this way.

    1) Invest in paid search and the traffic stops coming as soon as you stop spending.

    or

    2) Invest in strong SEO and the traffic will continue to come even when budgets drop to 0.

    Which makes sense? (That’s a rhetorical question….)

    The best CEOs, VPs, Directors, Managers, etc are making the smart decision and improving the potential success of their companies.

    The other companies making the not-so-smart decision? Well…..it won’t be long until they’re 404’d.
    .-= Shane Eubanks´s last blog ..Apple Will Kill Adobe Flash =-.

  • http://csscreme.com/ Css Creme

    And another conclusion is that we can’t even imagine how much are they making with these $1.2 billion invested :SSS. Obviously a LOT!
    .-= Css Creme´s last blog ..Images Out of Bounds Photoshop Effects Tutorial =-.

  • http://www.weboptimist.com/ Richard V. Burckhardt

    Where do I apply?

    ;-)
    .-= Richard V. Burckhardt´s last blog ..108 Quick SEO Tips Even Mom Would Love =-.

  • http://www.findandconvert.com/blog/ Bernie Borges

    Many of these F500 firms advertise for short tail keywords like “mens shirts” and “financial software.” Such short tail keywords are very difficult to achieve organic rankings without years of focus and SEO best practices. I’ve always found it amazing how so many companies want to be found for short tail keywords and are willing to pay for it in PPC. Many of these companies seem unwilling to take a long term view of SEO and do all that it takes to get good ROI.

    As more and more universities are offering SEO education, perhaps more people will be skilled enough to work at F500 and achieve desirable organic rankings.
    .-= Bernie Borges´s last blog ..Outbound Marketing Meets Inbound Marketing =-.

  • http://www.getfoundfirst.com Stuart Draper

    Bernie brings up a VERY good point!

    Another interesting thing to consider with ROI on marketing and advertising dollars is time to recoup the investment and start earning money. PPC delivers guaranteed placement and a faster, more measureable ROI.

    And one other interesting point to consider: How many of these fortune 500’s are B2C’s versus B2B’s? B2B’s still do a lot of face-to-face business, not because they wouldn’t like to advertise online (much more cost effective than outside sales), but because the buyers/purchasers don’t look for them online.

    Do you agree/disagree? I would love to hear your opinion on my views of this date from Conductor.
    .-= Stuart Draper´s last blog ..One of the 8 Pillars of Success with Paid Search Success (PPC) =-.

  • http://www.fairytalebaby.com angela@tutu,baby boutique

    That is a crazy figure. And here we are commenting one by one the right way to get to the top. Goes to show, money rules!

  • http://techcrunchies.com Anand

    The study can’t be taken on face value..Most fortune 500 cos do rank for their own brand names – so it’s not that SERPS suck at showing relevant results. There are two reasons : 1) Using SEO techniques to rank for specific keywords would take away the professional nature of the site and 2) Most companies would also like to rank for their competitors’ keywords. (Like Pepsi might want to show up when someone searches Coke?)
    .-= Anand´s last blog ..US Internet Penetration By Age =-.

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  • http://www.agence-hyperclics-marketing.com Peter

    Fortune 500 culture has always operated on buying ads, not finding cheaper/better ways. Agencies could educate them to that type of placement… if they only knew or be able to guaranty visibility… Which they can’t. Another aspect is that ROI mesuring… Spend a billion AND make billions still makes sense to them. Why do it orherwise (If it ain’t broken…)…? Leave natural SEO to the smaller guy interested in showing up in natural SERPs… It’s the only easily accessible option/advantage left to him… Otherwise, he’s history.

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  • http://www.proturkey.com.tr hosting

    I think instead of talking about why the spend is so low for organic SEO we should be putting our heads together about how to change this. Before you vote for the new SEMPO board read their BIO’s and their manifesto do not vote for anybody who does not understand that SEMPO has a responsibilioty here to as our Trade body.

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