June 5, 2007, 12:00 AM

More marketers see value in measuring their paid search ROI

The number of search marketers measuring return on investment on their campaigns has grown to 88% since 2005, says a new study from iProspect.

The “iProspect Search Marketer Measurement and Performance Study,” released at the 2007 Internet Retailer Conference and Exhibition, has found that the number of search marketers measuring return on investment on their paid campaigns has grown to 88% since 2005.

The goal of the study, conducted with JupiterResearch, was to gain an understanding of search marketer behavior based on measured results and personal performance evaluation. Trending behavior was based on data from previous studies. The fact that the number of marketers able to measure campaign ROI has grown by 9% since 2005 underscores the dwindling number of marketers who fall short in this area, according to iProspect.

Though surprised that the figure wasn’t larger, iProspect president Robert Murray says it still shows that more marketers are motivated to measure the ROI of their search programs. “Given the substantial investment that search marketing requires, I can’t imagine not measuring ROI,” he says. “It’s become mandatory as senior management is increasingly demanding that the cost be justified.”

In other findings related to search marketer performance evaluation trends, the study determined that the number of search marketers whose performance evaluations are based upon search metrics has jumped to 86%. In 2005, 19% of search marketers did not have their performance evaluation tied to search metrics. Today that number has shrunk to 14%, representing a 5% increase in marketer performance evaluations based upon search metrics.

The study also found an increase in search marketer job performance evaluations tied to business results such as total sales, return on advertising spend and ROI. Specifically, the percentage of search marketer evaluations tied to total sales increased by 16%; those evaluations based on return on advertising spend increased 13%, while those based on ROI rose 6%.

“With more search marketers tracking and measuring the performance of their campaigns, they have the information they need to tie their efforts to actual business results,” Murray says. “Increases in this area should continue.”

The study also found that 50% of search marketers have their performance based on total sales, while 49% percent are based on ROI and 42% are based on return on advertising spend. “Those numbers tell an interesting and encouraging story,” he says. “They speak to the increased sense of control and ownership felt by search marketers, and the increased sophistication of senior executives as it pertains to search.”

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