‘Search marketing spend to slowdown’

Forrester’s search engine marketing forecast says marketers in Western Europe are also seeing SEO cannabilise their paid search budgets in response to rising cost per click (CPC) rates.

While paid search spending marked a 24% year on year growth from 2009 to 2010 and a 31% year on year increase from 2010 to 2011, this is set to slowdown to 19% this year (see table below).

Forrester analyst Darika Ahrens says: “It’s not so much a case of paid search being less relevant, but that search and the process of “getting found” across channels has become more diverse with the advent of social media, growth in mobile search, and shifting budgets to SEO.”

Former search budgets are set to fund “mobile and social experiments”, Forrester suggests. In 2011, 44% of European marketers said they would increase their mobile budgets, while 41% say they will do the same with social media.

Companies like mobile operator Three says spending on mobile, tablet and social ads are now considered “business as usual”.

Despite paid search’s apparent decline, it will still continue to dominate digital marketing spend. Forester predicts it will increase from €11bn in 2010 to reach €20bn by 2016, outpacing display media spend.

SEO, meanwhile, is expected to reach €2bn in 2016, up from €1bn in 2012 (see year on year growth rates in table below).

Forrester recommends marketers should optimise their search and display bids together by using a bidding platform like Efficient Frontier or IgnitionOne to place budget across a mix of paid search, display and social media to achieve the best results in line with these trends.

Its report also suggests marketers should develop mobile search strategies that embrace its three principals of convenience: “immediacy, simplicity and context”. Forrester gives the example of Adidas’ mobile search strategy that includes links to nearby store locations, a coupon and phone numbers as part of its listing optimised for the keyword “women’s Adidas”.