Search marketers turning to specialist agencies: WFA

The WFA’s latest survey, however only garnered 36 responses from global and regional marketers, who are members of the WFA, representing 36 multinational companies. While the sample size is not definitive, it provides a degree of insight into how the world's biggest advertisers are handling search, said the report.

Digital marketing spend has increased significantly since the last survey in 2009. According to the report, 40 per cent of respondents were spending over US$33 million in 2011, compared with 25 per cent in 2009. However spend is still significantly lower in Asia-Pacific and Latin America with 57 per cent and 54 per cent investing under US$6 million respectively.

The study also found that despite the steep increase favouring specialist search agencies, 55 per cent of marketers still use their media agencies for paid search marketing. Over a quarter (26 per cent, up from 17 per cent) choose to work with an international digital agency network, while 39 per cent work with specialist search agencies in at least one country. None of the survey’s respondents handled search internally, compared with six per cent in 2009.

Mobile and social search appears to still be in the early stages of inclusion in the marketing mix, with 66 per cent of respondents saying they don’t dedicate a specific budget to mobile search and 44 per cent not devoting any budget specifically to social search. Those who do choose to allocate roughly 1.3 per cent and 3 per cent of their search marketing budget to mobile and social search, respectively. There are exceptions however, and 6 per cent of respondents say they devote over a fifth of their search budget to social search.

Fixed-rate commissions are still the most popular method of remunerating search agencies, with a third of respondents opting for this method. Fixed or output-based fees are nearly as popular with 30 per cent of respondents using this method, a large jump from the 11 per cent recorded in 2009.

KPI dashboards are the method-of-choice for marketers looking to track the success of their search campaigns. On average, four different criteria are used to assess the performance of paid search budgets; the most popular being click-through rates (71 per cent), average cost per conversion (65 per cent) followed by cost per click (52 per cent), and conversion rates (48 per cent). Sales comes last (19 per cent) indicating that most respondents are using search marketing primarily at the early stage of the consumer journey.

There is also a clear trend toward streamlining and integrating search – 68 per cent plan to centralise more of their search spend in the next year. This is a response in part to the fact that nearly half (47 per cent) found they had been bidding against colleagues for the same search terms in the last year. Another reason is the lack of communication between agency suppliers; 44 per cent of respondents complained of a lack of collaboration between paid and natural search suppliers.

“Paid search is a powerful platform, and 84 per cent of those surveyed plan to increase spend in this area. However, it could be even more effective if there was greater transparency and clarity among media owners and agency suppliers,” commented Stephen Loerke, WFA managing director.