4.4.1. Direction of digital marketing budgets
Companies
Figure 14: Change in digital marketing budgets 2012 – 2013
Respondents: 327
While marketing and advertising budgets in general have been in a state of decline or at least flux, digital has managed to maintain its growth. After more modest gains over the last several years, the incline appears to be steepening. The percentage of respondents expecting “significant” growth in 2013 is a full 50% higher than those evaluating the current year.
26%
51%
16%
5%
2% 0%
37%
49%
10%
2% 2%
0%
0%
10%
20%
30%
40%
50%
60%
Significant growth
Some growth No change Some decrease
Significant decrease
No investment
2012 2013 Projected
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4.4.2. Budget for search engine optimization in 2012
Figure 15 shows how much companies have spent on search engine optimization over the last three years. Respondents have slowly but surely increased their budgets, and only 2% of respondents indicated that they spent no funds on search engine optimization at all.
Companies
Figure 15: What was your company’s budget for search engine optimization (organic search)? (Including agency, staff and technology costs)
Respondents 2010: 416 | Respondents 2011: 243 | Respondents 2012: 187 9%
4.4.3. Change in budgets for search engine optimization
Companies [Figure 16] are slightly more likely than they were a year ago to be anticipating increased SEO spending– 55% of respondents this year anticipated an increase, compared to 54% in 2011 and 52% in 2010.
Agency respondents [Figure 17] expect more robust growth from their clients: 75% anticipated an increase in SEO spending, and at percentages of growth higher than last year.
Companies
Figure 16: How much more or less do you expect to spend on search engine optimization in 2012 compared to 2011?
3% 4%
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Agencies
Figure 17: How much more or less do you expect your clients to spend on search engine optimization in 2012 compared to 2011?
Respondents 2010: 704 | Respondents 2011: 432 | Respondents 2012: 293
Note: 2010 series shows budget changes expected for 2010 compared to 2009.
1%
4.4.4. Expected search engine optimization billings
The amount of Agency billing for SEO services continues to increase. A significant drop in those spending less than $100k corresponds to higher number across the board, with the greatest increase in the $1 to $5 million range.
Agencies
Figure 18: What do you expect your firm’s gross billings will be in 2011 that are attributable to search engine optimization programs?
Respondents 2010: 703 | Respondents 2011: 429 | Respondents 2012: 293
Note: 2010 series shows gross billings expected for 2010.
47%
$10 million
More than $10 million 2010 2011 2012
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4.4.5. Budget for paid search in 2012
Both clients [Figure 19] and agencies [Figure 20] expect robust growth in their PPC spending. Many of the largest pay per click spenders doing so through in-house resources, and it’s at the top end of the spectrum where there’s the fastest growth, as those projecting over $10MM in spending more than doubled from 5% to 12% of the sample.
Companies
Figure 19: What was your company’s budget for paid search (PPC) in the last year?
(Including media, agency, staff and technology costs)
Respondents 2010: 372 | Respondents 2011: 219 | Respondents 2012: 184
Note: 2010 series shows last year’s data for 2009 budgets.
2%
Agencies
Figure 20: Approximately how much will your average client spend with you gross on paid search programs in 2012?
Respondents 2010: 600 | Respondents 2011: 375 | Respondents 2012: 267
35% 37%
17%
5% 6%
29%
42%
16%
7% 6%
24%
33%
19%
10%
14%
0%
20%
40%
60%
Less than
$10,000
$10,001 -
$100,000
$100,001-
$500,000
$500,001 - $1 million
More than $1 million 2010 2011 2012
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4.4.6. Change in budgets for paid search
Consistent with the last two charts and their view of the PPC market, planned changes to budgets indicate that marketers are less likely to remain on the fence (i.e. “About the same” spending) and are generally looking to spend more. However, the minority that is cutting its PPC spending grew
somewhat, from 10% to 17% of the sample. However, this group skews toward smaller companies, so the net effect is still quite positive.
Companies
Figure 21: How much more or less do you expect to spend on paid search in 2012 compared to 2011 and 2010?
Respondents 2010: 373 | Respondents 2011: 217 | Respondents 2012: 184
Note: 2010 series shows budget changes expected for 2010 compared to 2009.
4% 5% 7%
Agencies
Figure 22: How much more or less do you expect your clients to spend on paid search this year compared to last?
Respondents 2010: 600 | Respondents 2011: 379 | Respondents 2012: 348
Note: 2010 series shows budget changes expected for 2010 compared to 2009.
2%
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4.4.7. Flexibility in paid search budgeting
It’s been two years since we asked marketers about the flexibility of their paid search budgets, and instead of finding a move toward greater flexibility, the reverse seems to be true. Those describing themselves as having “a great deal of flexibility” dropped from 50% to 38% of the sample.
Companies
Figure 23: How much flexibility do you have to change paid search marketing budgets based on on-going return on investment (ROI)?
Respondents: 247
9%
53%
38%
No flexibility – budgets are fixed Some flexibility
A great deal of flexibility – budgets depend entirely on ROI
4.4.8. Expected paid search billings
With an expected rise in search spending [Charts 4.4.2-4.4.6] there’s a concurrent increase in anticipated agency billings.
Agencies
Figure 24: What do you expect your firm’s gross billings to be in 2011 that are attributable to paid search programs?
Respondents 2010: 595 | Respondents 2011: 374 | Respondents 2012: 366
Note: 2010 series shows gross billings expected for 2010.
47%
$10 million
More than
$10 million 2010 2011 2012
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4.4.9. Proportion paid to SEM service providers
Although agencies expect their overall billings to rise, it’s not related to an increase in the percentage they charge on top the buy. On the contrary, there’s a steady progression in those offing flat fees (nearly 50%) and a shift downward into the single digits for those maintaining a percentage model.
The same trend is evident in the agencies’ view [Figure 26], although their take on percentages skews higher in the 9%-17% of spend range.
Companies
Figure 25: What is the typical percentage you pay to your SEM service provider for paid search programs on top of the ad spend with search engines?
2011 Respondents: 195 | 2012 Respondents: 212
45%
12%
9%
6%
9% 8% 7%
3% 1%
49%
16%
13%
6% 7% 6%
0% 1% 1%
0%
20%
40%
60%
We pay flat fee
Less than 3%
3-5% 6-8% 9-11% 12-14% 15-17% 18-20% More than 26%
2011 2012
Agencies
Figure 26: What is the typical percentage you charge for administering paid search campaigns?
Respondents 2011: 341 | Respondents 2012: 231
30%
4% 5%
7%
16%
12%
10%
6%
4%
6%
36%
7%
4%
6%
13% 13%
11%
5%
3% 2%
0%
10%
20%
30%
40%
Flat fee Less than 3%
3-5% 6-8% 9-11% 12-14% 15-17% 18-20% More than 20%
Other
2011 2012
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4.4.10. Budget for social media marketing in 2012
The number of companies who reported having no budget at all for social media continued to decrease this year, and growth occurred for all brackets between the budget ranges of $25,000 -
$500,000 as companies bump up their spending.
Companies
Figure 27: What was your company’s budget for social media marketing in the past 12 months?
Respondents 2010: 304 | Respondents 2011: 189 | Respondents in 2012: 210 23%
4.4.11. Change in social media spend
Growth in social media spending by companies is predicted to slow, but not decline in the next year.
The number of companies expecting to spend more decreased 10%, corresponding with an 11%
increase in the number of companies saying that their spending would remain about the same.
86% of agencies continue to expect growth in the amount that their clients are willing to spend on social [Figure 29]. As the channel matures, fewer agencies are expecting spending growth above 50%;
the majority who are anticipating gains are expecting spending in the 10%, 20%, and 30% growth brackets.
Social growth should still be seen in perspective. It’s an early stage channel with no directly associated media spend, so budgets and billings are comparatively low with other channels, comparing better with email than paid search for example. In Figure 30 we see that while agencies expect their clients’
budgets for social to grow, that barely changes their billing profiles, as most see less than $100k from social media clients.
Companies
Figure 28: How much more or less do you expect to spend on social media marketing in 2012 compared to 2011?
1% 2% 1%
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Agencies
Figure 29: How much more or less do you expect your clients to spend on social media marketing in 2012 compared to 2011?
Respondents 2010: 532 | Respondents 2011: 391 | Respondents 2012: 309 1% 1%
4.4.12. Expected social media billings
Agencies
Figure 30: What do you expect your firm’s gross billings will be in the next year that are attributable to social media marketing?
Respondents 2010: 534 | Respondents 2011: 390 | Respondents 2012: 320
60%
27%
7%
3% 2% 1%
56%
25%
12%
6%
1% 1%
55%
30%
5% 7%
1% 1%
0%
20%
40%
60%
80%
$1,001 to
$100,000
$100,001 to
$500,000
$500,001 to
$1 million
$1 million to
$5 million
$5 million to
$10 million
More than
$10 million 2010 2011 2012
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