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SEO & PPC budgets set to double by 2014

Good news for those of us in the SEO industry as new figures from Forrester predict spend will increase steadily over the next 5 years.

The chart below shows the predicted increase in spend for the US – it’s fair to assume the UK market will follow the same trends.
SEO & PPC spend

According to the report interactive marketing will near $55 billion and represent 21% of all marketing spend in 2014 as marketers shift dollars away from traditional media and toward search marketing, display advertising, email marketing, social media, and mobile marketing. This cannibalization of traditional media will bring about a decline in overall advertising budgets, death to obsolete agencies, a publisher awakening, and a new identity for Yahoo!

Although the figures are pleasing it’s hard to see how PPC spend can increase much further in developed markets. Most clients we work with running maximum budgets to gain every click possible and a lot of markets are already saturated.

Natural search on the other hand has huge potential because of the large disconnect between the amount people are happy to spend on PPC and the amount they spend on SEO. In some industries brands are spending 10-20 times as much on PPC as SEO and yet natural search drives over 75% of all search traffic.

SEO drives 75%+ of all search traffic, yet garners less than 15% of marketing budgets for SEM campaigns. PPC receives less than 25% of all search traffic, yet earns 80%+ of SEM campaign budgets.

The big difference between PPC and SEO is the ability to easily broad match across loads of keyphrases – with SEO you need to work on difficult things like building up trust and expanding content using an intelligent site structure. It’s far easier (and perhaps even cheaper in the short term) to just buy keywords than to create tens of thousands of optimised landing pages.

Via Marketing Pilgrim

BY Patrick Altoft AT 3:35pm ON Wednesday, 8 July 2009

Patrick Altoft is Director of Search at Branded3 and has worked in the SEO industry for over 10 years. With experience across some of the worlds largest brands as well as startup businesses Patrick is well known in the industry and speaks regularly at the major SEO conferences and events. Follow Patrick on Twitter or Google+

Comments

  • http://www.blogstorm.co.uk Patrick Altoft

    By the way, this obviously means that by 2014 the search results are going to be massively competitive so now is the time to invest in SEO, don’t wait until everybody is spending twice as much.

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  • http://BestInternetMarketingCompany.com BestInternetMarketing

    Thanks for sharing. I would tend to agree w/your comments regarding PPC saturation. While SEO may not be cheap, it is getting more and more cost effective relative to PPC, which in many cases has reached a point of little to no ROI. It will be interesting to see how all of this develops over time.

  • http://www.crearedesign.co.uk Creare-Website-Design

    In terms of our Business, it’s certainly heading towards that the large majority of clients are interested in SEO and taking up our SEO packages, so it’s no real surprise that this will be a market that continues to grow.

  • Rahul Pandey

    I am feeling good :)

  • http://quillcards.com David

    I have a newbie question that I’ve had in the back of my mind for a while.

    If a company pays a lot for PPC ads, and gets lots of hits, do those hits translate – in Google’s eyes – to the company appearing higher up the list for those keywords in natural search?

  • http://www.blogstorm.co.uk Patrick Altoft

    @David – No, they are totally separate.

  • http://thesmallbiznest.wordpress.com TheSmallBizNest

    For smaller organizations, I think PPC simply serves as a keyword research tool. Once you identify the keywords that convert, redirect the funds to SEO projects and boost organic rank.

    I would like to see SEO vs. PPC pertaining to the following:

    Average conversion rate
    Average cost per acquisition
    Average value per customer
    ROI

  • http://www.hubtonomy.com Hubtonomy

    I suppose this is both good and bad news. good that the internet economy is set to grow but bad as this means more competition.

  • http://www.absoluteinternetmarketing.co.uk/web_marketing simoncolley

    It is good to hear there’s still plenty of room for growth but i agree with PPC saturation, the cpc is only going to keep increasing , therefore generating a good roi is going to become more difficult especially in sectors that are already pretty established. Although on another note, a friend of mine operates a niche site and it’s cheaper for him to run ppc ads for some terms than seo because the cpc rate is so low…how long that continues for is anyone’s guess, but this instance is probably a minority.

  • http://www.goodtherapy.org counseling

    Never knew that there is so much budgetary gap between paid searches and SEO.

  • http://getgreatarticles.weebly.com Tess

    Great news as far as I am concerned about increased SEO! In my ghostwriting services, I write for many SEO and internet marketing firms and their clients. It’s always good to know you have job security. Thanks for the awesome information.

  • http://bloggerpinnacle.com joabng

    more and more that we shall start using the SEO now.

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  • Ecommerce Help – Tyrone Shum

    Economic Boom once again and so the people will soon have prosperity but it is not always as if we have to take the chances. In SEO and paid searches issue, there is indeed a wide gap in terms of payment and also of the work given or executed. Thus, it is far more important to look very closely on this matter especially if you are new in the business because success also depends on the backbones of your business. Without market, there will be no business.

  • http://www.usdigital.co.uk Tom web

    I tend to agree. We have seen a massive increase in PPC and SEO.

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  • http://www.findaracehorse.com racehorses

    My PPC spend for our website is going through the roof. I am throwing more money at online and reducing my print expenditure. I agree with the above forecast

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