Google Poised To Become Top UK Marketing Vehicle, New Report Shows Breakdown Of UK Search Spend

Apr 18, 2008 at 10:50am ET by Greg Sterling

In its Q1 earnings report yesterday, Google announced that UK revenues were $803 million (£407 million), which was part of overall revenues from outside the US of $2.65 billion or 51% of Q1 total revenues for Google.

These figures prompted an item on a BBC blog to project that Google would overtake the UK’s “biggest commercial television business” ITV, which reportedly had revenues in 2007 of roughly £1.5 billion ($2.99 billion). If Google maintains its current pace in the UK it would make just over $3.2 billion (£1.6 billion) this year under current exchange rates.

Google reportedly now controls about half of the total UK online ad spend (estimated to be roughly £2.8 billion [$5.57 billion]). This comes as something of a shock to the writer, who warns, “You could not ask for a starker example of the threat to traditional media from the online world.”

The article also cites third party sources to say that Google dominates the UK paid search market with about an 80 percent share of the spend.

Separately, E-consultancy has put out the 50+ page UK Search Engine Marketing Report 2008 based on a survey of roughly 1,000 respondents from agencies and marketers about SEO and SEM spending and practices in the UK.

Here are some of the top-level findings:

–9% of companies surveyed are spending more than £1 million ($1.99 million) annually on paid search. One in six companies surveyed (16%) is spending at least £50,000 on SEO every year.

–According to agency respondents, the proportion of overall client online marketing budget going to search is 31% and is virtually identical to last year.

–Direct online sales is the most likely primary objective of paid search marketing… The next most likely PPC objective is lead generation (51%), which has dropped very slightly from 53% last year.

–In terms of SEO, the most common goal is driving traffic, cited as a primary objective by 63% of respondents. The importance of branding as a primary objective of SEO has increased significantly, jumping from 36% in 2007 to 44% in 2008.

–The number of clicks/visitors and number of sales are the two most commonly used methods for tracking return on investment for both paid search and SEO.

–Some 86% of responding organisations are paying to appear on Google’s sponsored listings. The percentage of organisations using Yahoo! for paid search has climbed from 45% to 49%, which shows that the gap is closing slightly. The proportion of advertisers using Microsoft’s Live platform has dropped slightly from 33% last year to 30% this year.

–According to company respondents, the biggest problems preventing paid search marketing success are as follows:

1) Keywords too expensive (38%) 2) Lack of internal resource (36%) 3) Lack of budget (34%) 4) Poorly converting website (29%) 5) Competition (28%)

Greg Sterling is a Contributing Editor at Search Engine Land, and writes a personal blog Screenwerk, examining the broader world of media and advertising. He also posts at a Local Mobile Search, which is focused on the mobile Internet.

See more articles by Greg Sterling >

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