2011 Search Marketing - Benchmark Report (PPC)

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MarketingSherpa 2011 Search Marketing Benchmark Report – PPC Edition
INTRODUCTION FROM HUBSPOT ABOUT THIS EXCERPT
When it comes to inbound marketing, combining PPC with SEO can often make for powerful results. When
used correctly PPC can be extremely valuable to organizations trying to attract traffic and leads to their
websites.

Many companies split their dollars between SEO and PPC, the idea being that PPC supports their search
presence until their organic rankings reach page one, at which point they end or reduce their PPC spend for
that keyword.

We also believe that PPC works well for testing. We use PPC for testing titles, offerings, email subject lines,
ad copy and keyword phrases. It lets us know right away what will work and what won’t.

We hope that the information in this excerpt from MarketingSherpa’s 2011 Search Marketing Benchmark
Report – PPC Edition will help marketers determine how best to spend their PPC dollars.

The pages we have chosen to sponsor show key benchmarks and metrics. We think this is important
information for companies to have because when you measure your efforts with those of other
organizations, similar in size and target market, you get a better sense of how you are succeeding. The
metrics in this excerpt cover each stage of the PPC process, from keywords to conversions.

We are only sponsoring a small percentage of MarketingSherpa’s 2011 Search Marketing Benchmark Report
– PPC Edition. To get a sense of what the complete 189 page report contains, we’ve also included the full
table of contents as well as the Executive Summary.

Enjoy!

The HubSpot Team

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2011 Search Marketing Benchmark Report – PPC Edition
Research and Insights on Optimizing PPC Campaigns
from Keywords to Conversions
Lead Author
Jen Doyle, Senior Analyst
Contributors
Sergio Balegno, Research Director
Production Editor
Brad Bortone, Editorial Production Manager
2011 Search Marketing Benchmark Report – PPC Edition

US $447 / ISBN: 978-1-936390-01
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i
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TABLE OF CONTENTS
Table of Contents .................................................................................................................... ii
Director's Note......................................................................................................................... 2
Executive Summary ................................................................................................................ 3

The state of PPC................................................................................................................................... 4
PPC maturity......................................................................................................................................... 4
Chart: PPC maturity....................................................................................................................... 4
Perceptions of PPC at budget time ....................................................................................................... 5
Chart: Perceptions of PPC at budget time ..................................................................................... 5
Perceptions on the most effective PPC objectives................................................................................ 6
Chart: The effectiveness of PPC objectives................................................................................... 6
Social impacts PPC performance ......................................................................................................... 7
Chart: Average clickthrough rates by social media use ................................................................. 7
Mobile search in its' infancy as a marketing tactic ................................................................................ 8
Chart: The impact of mobile search ............................................................................................... 8
Local search has reached maturity as a marketing tactic ..................................................................... 9
Chart: The impact of local search .................................................................................................. 9
Search partnerships............................................................................................................................ 10
Chapter 1: PPC Benchmarks ................................................................................................. 2
Budgeting for PPC ................................................................................................................ 12

Online marketing budgets ................................................................................................................... 12
Chart: Online marketing's share of the budget............................................................................. 12
Chart: Online marketing budget allocation................................................................................... 13
Chart: Online marketing budget allocation by organization size .................................................. 14
Chart: Online marketing budget allocation by primary market ..................................................... 15
Chart: Online marketing budget allocation by industry sector...................................................... 16
Chart: Online marketing budget allocation by PPC maturity ........................................................ 17
Perceptions of PPC at budget time ..................................................................................................... 18
Chart: Perceptions of PPC at budget time ................................................................................... 18
Chart: Perceptions of PPC at budget time by organization size .................................................. 19
Chart: Perceptions of PPC at budget time by primary market ..................................................... 20
Chart: Perceptions of PPC at budget time by industry sector ...................................................... 21
Chart: Perceptions of PPC at budget time by PPC maturity ........................................................ 22
Increasing PPC budgets ..................................................................................................................... 23
Chart: Expected changes in PPC budgets................................................................................... 23
Chart: Expected changes in PPC budgets by organization size .................................................. 24
Chart: Expected changes in PPC budgets by primary market ..................................................... 25
Chart: Expected changes in PPC budgets by industry sector...................................................... 26
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Chart: Expected changes in PPC budgets by PPC maturity........................................................ 27

Clicks are the greatest PPC expense ................................................................................................. 28
Chart: The allocation of PPC budgets.......................................................................................... 28
Chart: The allocation of PPC budgets by organization size ......................................................... 29
Chart: The allocation of PPC budgets by primary market ............................................................ 30
Chart: The allocation of PPC budgets by industry sector............................................................. 31
Chart: The allocation of PPC budgets by PPC maturity............................................................... 32
Google dominates PPC budgets......................................................................................................... 33
Chart: Search engine allocation of PPC budgets......................................................................... 33
Chart: Search engine allocation of PPC budgets by organization size ........................................ 34
Chart: Search engine allocation of PPC budgets by primary market ........................................... 35
Chart: Search engine allocation of PPC budgets by industry sector............................................ 36
Chart: Search engine allocation of PPC budgets by PPC maturity.............................................. 37
Investing in PPC ................................................................................................................................. 38
Chart: Actual PPC budgets.......................................................................................................... 38
Chart: Actual PPC budgets by organization size ......................................................................... 39
Chart: Actual PPC budgets by primary market ............................................................................ 40
Chart: Actual PPC budgets by industry sector............................................................................. 41
Chart: Actual PPC budgets by PPC maturity ............................................................................... 42
Target objectives................................................................................................................... 43
Perceptions on the most effective PPC objectives.............................................................................. 43
Chart: The effectiveness of PPC objectives................................................................................. 43
Chart: Very effective PPC objectives by organization size .......................................................... 44
Chart: Very effective PPC objectives by primary market ............................................................. 45
Chart: Very effective PPC objectives by industry sector .............................................................. 46
Chart: Very effective PPC objectives by PPC maturity ................................................................ 47
Chart: Very effective PPC objectives by social media use........................................................... 48
Marketer insights: PPC strategy development .................................................................................... 49
B2B marketers share insights on planning PPC strategies.......................................................... 49
B2C marketers share insights on planning PPC strategies ......................................................... 52
PPC metrics ........................................................................................................................... 54

Step 1: Keywords................................................................................................................................ 54
Chart: Number of target PPC keywords....................................................................................... 54
Chart: Number of target PPC keywords by annual PPC budgets ................................................ 55
Chart: Number of target PPC keywords by organization size ...................................................... 56
Chart: Number of target PPC keywords by primary market ......................................................... 57
Chart: Number of target PPC keywords by industry sector.......................................................... 58
Chart: Number of target PPC keywords by PPC maturity............................................................ 59
Chart: Most commonly used keyword match types...................................................................... 60
Chart: Most commonly used keyword match types by organization size ..................................... 61
Chart: Most commonly used keyword match types by primary market ........................................ 62
Chart: Most commonly used match types by industry sector....................................................... 63
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Chart: Most commonly used match types by PPC maturity ......................................................... 64

Chart: Keyword quality scores ..................................................................................................... 65
Chart: Keyword quality scores by organization size..................................................................... 66
Chart: Keyword quality scores by primary market........................................................................ 67
Chart: Keyword quality scores by social media use..................................................................... 68
Marketer insights: Best tactics in improving quality score ................................................................... 69
B2B marketers share insights in improving quality score............................................................. 69
B2C marketers share insights in improving quality score ............................................................ 71
Step 2: Clicks ...................................................................................................................................... 73
Chart: Average PPC clickthrough rate ......................................................................................... 73
Chart: Average PPC clickthrough rates by organization size....................................................... 74
Chart: Average PPC clickthrough rates by primary market.......................................................... 75
Chart: Average PPC clickthrough rates by industry sector .......................................................... 76
Chart: Average PPC clickthrough rates by social media use....................................................... 77
Chart: Average cost-per-click ...................................................................................................... 78
Chart: Average cost-per-click by organization size...................................................................... 79
Chart: Average cost-per-click by primary market......................................................................... 80
Chart: Average cost-per-click by industry sector ......................................................................... 81
Chart: Percentage of bad, unwanted or irrelevant clicks.............................................................. 82
Chart: Percentage of bad, unwanted or irrelevant clicks by organization size ............................. 83
Chart: Percentage of bad, unwanted or irrelevant clicks by primary market ................................ 84
Chart: Percentage of bad, unwanted or irrelevant clicks by industry sector................................. 85
Chart: Percentage of total inbound traffic from PPC .................................................................... 86
Chart: Percentage of total inbound traffic from PPC by organization size ................................... 87
Chart: Percentage of total inbound traffic from PPC by primary market ...................................... 88
Chart: Percentage of total inbound traffic from PPC by industry sector ....................................... 89
Chart: Percentage of total inbound traffic from PPC by social media use.................................... 90
Step 3: Conversions............................................................................................................................ 91
Chart: Defining a conversion ....................................................................................................... 91
Chart: Defining a conversion by organization size....................................................................... 92
Chart: Defining a conversion by primary market.......................................................................... 93
Chart: Defining a conversion by industry sector .......................................................................... 94
Chart: Defining a conversion by social media use ....................................................................... 95
Chart: Average PPC conversion rate........................................................................................... 96
Chart: Average PPC conversion rates by conversion definition................................................... 97
Chart: Average PPC conversion rates by organization size ........................................................ 98
Chart: Average PPC conversion rates by primary market ........................................................... 99
Chart: Average PPC conversion rates by industry sector .......................................................... 100
Chart: Average PPC conversion rates by social media use....................................................... 101
Chart: Average cost per conversion........................................................................................... 102
Chart: Average cost-per-conversion by organization size.......................................................... 103
Chart: Average cost-per-conversion by primary market............................................................. 104
Chart: Average cost-per-conversion by industry sector ............................................................. 105
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Chart: Average cost-per-conversion by social media use.......................................................... 106

Chart: Percent of total leads generated from PPC..................................................................... 107
Chart: Percent of total leads generated from PPC by organization size .................................... 108
Chart: Percent of total leads generated from PPC by primary market ....................................... 109
Chart: Percent of total leads generated from PPC by industry sector........................................ 110
Chart: Quality of leads generated from PPC.............................................................................. 111
Chart: Quality of leads generated from PPC by organization size ............................................. 112
Chart: Quality of leads generated from PPC by primary market ................................................ 113
Chart: Quality of leads generated from PPC by industry sector................................................. 114
Chart: Quality of leads generated from PPC by PPC maturity................................................... 115
PPC tactics – Optimizing every stage of the game for paramount returns................... 116
The effectiveness of PPC tactics ...................................................................................................... 116
Chart: The effectiveness of PPC tactics .................................................................................... 116
Chart: Very effective PPC tactics by organization size .............................................................. 117
Chart: Very effective PPC tactics by primary market ................................................................. 118
Chart: Very effective PPC tactics by industry sector.................................................................. 119
Marketer insights: PPC successes and challenges........................................................................... 120
B2B marketers share insights on their greatest successes and challenges with PPC............... 120
B2C marketers share insights on their greatest successes and challenges with PPC............... 122
Chapter 2: PPC Resources................................................................................................. 123
PPC Resources.................................................................................................................... 124

Majority of online marketers practicing tactics in-house.................................................................... 124
Chart: Online marketing resources ............................................................................................ 124
Chart: Online tactics done in-house by organization size .......................................................... 125
Chart: Online tactics done in-house by primary market ............................................................. 126
Chart: Online tactics done in-house by industry sector.............................................................. 127
Web analytics programs provide premium insights for PPC ............................................................. 129
Chart: The effectiveness of PPC tools ....................................................................................... 129
Chart: The effectiveness of PPC tools by organization size ...................................................... 130
Chart: The effectiveness of PPC tools by primary market ......................................................... 131
Chapter 3: Mobile search.................................................................................................... 132
Mobile search ...................................................................................................................... 133

The current impact of mobile search................................................................................................. 133
Chart: The current impact of mobile search............................................................................... 133
Chart: Receiving a great impact from mobile search by organization size................................. 134
Chart: Receiving a great impact from mobile search by primary market.................................... 135
Chart: Receiving a great impact from mobile search by industry sector .................................... 136
Chart: Receiving a great impact from mobile search by social media use................................. 137
The expected future impact of mobile search ................................................................................... 138
Chart: The expected future impact of mobile search ................................................................. 138
Chart: Expecting to be greatly impacted by mobile search by organization size ....................... 139
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Chart: Expecting to be greatly impacted by mobile search by primary market .......................... 140
Chart: Expecting to be greatly impacted by mobile search by industry sector ........................... 141
Chart: Expecting to be greatly impacted by mobile search by social media use........................ 142
Chart: Mobile media users within age and gender..................................................................... 143
Chapter 4: Local search...................................................................................................... 144
Local Search ........................................................................................................................ 145

Local search currently having a significant impact ............................................................................ 145
Chart: The current impact of local search .................................................................................. 145
Chart: Receiving a great impact from local search by organization size.................................... 146
Chart: Receiving a great impact from local search by primary market....................................... 147
Chart: Receiving a great impact from local search by industry sector ....................................... 148
Chart: Receiving a great impact from local search by social media use .................................... 149
Local search has reached maturity as a marketing tactic ................................................................. 150
Chart: The expected future impact of local search..................................................................... 150
Chart: Expecting to be greatly impacted by local search by organization size........................... 151
Chart: Expecting to be greatly impacted by local search by primary market.............................. 152
Chart: Expecting to be greatly impacted by local search by industry sector .............................. 153
Chart: Expecting to be greatly impacted by local search by social media use........................... 154
Local search tactics .......................................................................................................................... 155
Chart: Use of local search tactics .............................................................................................. 155
Chart: Use of local search tactics by organization size.............................................................. 156
Chart: Use of local search tactics by primary market................................................................. 157
Chart: Use of local search tactics by industry sector ................................................................. 158
Chart: Use of local search tactics by social media use .............................................................. 159
Chapter 5: The Search Engine Market .............................................................................. 160
State of the search market ................................................................................................. 161

Google holds their place at the top of the search market.................................................................. 161
Chart: Core search report - share of searches .......................................................................... 161
Chart: Core search report - volume of searches ........................................................................ 162
Chart: Search engine market share - spend .............................................................................. 163
Bing and Yahoo! alliance aims to even the playing field ................................................................... 164
Chart: % Change in total searches by search engine for 2009.................................................. 164
Chart: % Change in unique searches by search engine for 2009.............................................. 165
Chart: % Change in searches per search engine user by search engine for 2009 .................... 166
Search and social partnerships......................................................................................................... 167
Chart: Total unique visits to search engines and social sites for 2009-2010 ............................. 167
Chapter 6: Agency Perspectives ....................................................................................... 168
The agency perspective...................................................................................................... 169

Increasing client budgets .................................................................................................................. 169
Chart: Expected changes in Client's PPC budgets .................................................................... 169
Agencies rank the effectiveness of PPC tactics ................................................................................ 170
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Chart: The efficiency of PPC tactics – agency perspective........................................................ 170

Agencies' clients performance in quality score ................................................................................. 171
Chart: Average quality scores – agency perspective................................................................. 171
Agency insights: PPC successes and challenges............................................................................. 172
Agencies share insights on their greatest successes and challenges with PPC........................ 172
Appendix .............................................................................................................................. 175

Appendix 1 - Glossary....................................................................................................................... 175
Appendix 2 — Demographic Data for 2011 Search Marketing Benchmark Survey .......................... 184
Chart: Organization size of survey respondents ........................................................................ 184
Chart: Organization type of survey respondents........................................................................ 185
Chart: Primary target audience of survey respondents.............................................................. 186
Chart: Industry sector of survey respondents ............................................................................ 187
Appendix 3 - Research Partners and Other Data Sources Referenced ............................................ 188
Research partners ............................................................................................................................ 188
Referenced resources....................................................................................................................... 189
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DIRECTOR'S NOTE
Welcome to MarketingSherpa's 2011 Search Marketing Benchmark Report – PPC Edition.
th
When we began planning the 7 annual edition of this report, we realized that the sponsored search
advertising landscape was about to experience a dramatically more competitive year – much more so than
in recent years. It also became clear that the marketing community would need a comprehensive study
based solely on PPC research to support their campaign decisions, as they face new challenges within the
upcoming year. It also became abundantly clear that the amount of valuable research needed to cover this
and the new terrain of organic search would be enough to fill two benchmark reports – literally!
So, for the first time ever, the Search Marketing Benchmark Report is being published in two separate
editions. The PPC Edition provides all-new benchmark research and insights exclusively on the topic of PPC.
The companion SEO Edition focuses exclusively on the topic of search engine optimization. The goal of each
edition is to help you better understand what works in search engine marketing today.
PPC Edition Highlights
x Primary research survey providing the collective wisdom of 2,194 search marketers
x Benchmarks on PPC budgets, objectives, tactics and metrics
x The current and expected future impact of mobile and local search
x Search agencies provide their unique prospective on client PPC campaigns
x An overview of the search engine market from industry leading sources
This benchmark report is packed with useful information including 147 charts and analytical commentary,
hundreds of insights from search marketers and more. This information is actionable and highly necessary
to remain competitive in a quickly-evolving paid search landscape.
As always, we welcome your comments and look forward to hearing from you.
Best regards,
Sergio Balegno
Research Director, MarketingSherpa
@SergioBalegno
2
EXECUTIVE SUMMARY
Optimizing PPC campaigns from keywords to conversions
Between increased competition, the growth of social media, and the impact of mobile search, local search
and search partnerships, remaining a threat in the PPC arena will prove to be a continuous challenge in
2011. In order to achieve optimal impact, organizations will be challenged to execute the latest tactics and
develop more sophisticated processes from keywords to conversions, or else face being a powerless
contender in a losing battle.
Even though PPC has matured as a marketing tactic, the majority of organizations are surprisingly informal
with their execution of PPC. In order to receive paramount returns from this impactful tactic, organizations
are challenged to formalize their PPC processes from keywords to conversions.
Organizations are increasing PPC budgets for 2011 in part because of its effectiveness towards achieving
essential business objectives like increasing lead generation, website traffic and online sales revenue. With
these increased budgets, organizations will face increased competition, again making it even more
important to formalize their processes and become more efficient PPC marketers.
The growing traffic and popularity of various social media sites now compete with the search engines.
However, search engines are still receiving billions of searches per month and are continually releasing
innovations that improve search experiences. Social marketing is commonly being integrated into SEO
campaigns for improvements on the organic side and this report will reveal the surprising impact that social
marketing can have on PPC campaigns.
Two areas where search engines are releasing innovative improvements on the paid side include mobile
and local search. What is the current impact of these innovations, and how will they impact organizations in
the future? These key questions will be answered in this report.
Organizations will find that the key to success in today's PPC market and beyond is to take the necessary
actions to optimize for the latest PPC innovations and develop a more sophisticated approach by
formalizing PPC processes at every stage of the game; from keywords to conversions. In this first edition
PPC benchmark report, you'll find plenty of data on these topics, as well as valuable insights from PPC
marketers and agencies on their strategies, challenges and successes.
As always, we thank you for your interest in our research, and look forward to your feedback and stories of
success.
Best regards,
Jen Doyle
Senior Analyst, MarketingSherpa
@JenLDoyle
3
THE STATE OF PPC

If you're in the business of PPC, you understand the importance of staying abreast of the many changes that
occur from increased competition to new PPC innovations and features to social media's impact on search.
The constantly evolving environment of PPC requires a sophisticated level of execution for the practices
involved in this tactic. This section will cover PPC maturity, perceptions of PPC at budget time and its
effectiveness, social media's impact on PPC performance, the impact from search innovations in mobile and
local search, as well as search partnerships.
PPC MATURITY
CHART: PPC MATURITY
Q. Please select the statement below that best describes the process your organization uses to perform paid
search (PPC) practices.
We have no
process for
performing this
22%
We have a formal
process we
routinely perform
41%
We have an
informal process
we randomly
perform
37%
Source / Methodology: MarketingSherpa Search Marketing Benchmark Survey / Fielded April, 2010 N=2,194
The majority of organizations are surprisingly informal with the processes they use to execute this impactful
marketing tactic. In this year's study, 59% of organizations indicated that they do not have a formal process
they routinely perform for PPC. This is surprising, not only because of the level of sophistication PPC
requires, but also because since it can require significant investments to cover the price of clicks, it would
be expected that most organizations would execute this tactic in a highly formal manner. Additionally, there
are a number of tools available to organizations to aid in this process.
In order to achieve the greatest success from their PPC campaigns, organizations are challenged to become
more sophisticated with their PPC practices by formalizing their processes.
4
PERCEPTIONS OF PPC AT BUDGET TIME

CHART: PERCEPTIONS OF PPC AT BUDGET TIME
Q. Which statement best describes how paid search (PPC) is perceived by your organization at budget time?
PPC is not on
our radar. Let's
keep it that
The value of way.
PPC is unknown 8%
and something
we do only as
time permits. PPC is producing
Why invest measurable ROI.
more? Let's increase
15% budget liberally for
continuous
improvement.
44%
PPC is a promising
tactic and will
eventually produce
ROI. Let's increase
budget but do it
conservatively.
33%
This report includes a comprehensive section devoted to PPC budgets, including PPC's share of the online
budget, expected changes in PPC budgets for 2011, actual PPC budgets by organization size and industry,
and more. What this chart displays is the perceptions of PPC at budget time. The verdict is clear – the
majority of organizations perceive PPC as an effective tool for producing ROI, with 77% of organizations
indicating that PPC is either producing measurable ROI or that PPC is a promising tactic that will eventually
produce ROI. Organizations are acting on these perceptions with increased budgets.
With increased PPC budgets, organizations will be more enabled to raise bids and coverage for their PPC
ads. This increased level of competition challenges organizations to formalize PPC processes and become
more efficient at identifying new keyword opportunities, improving quality score and increasing
clickthrough and conversion rates to avoid getting priced out of the game, or not using their spend to its
greatest potential.
5
PERCEPTIONS ON THE MOST EFFECTIVE PPC OBJECTIVES

CHART: THE EFFECTIVENESS OF PPC OBJECTIVES
Q. In your experience, how effective has paid search (PPC) been at accomplishing the following marketing
objectives for your organization?
Very effective Somewhat effective Not effective
Increase lead
49% 38% 13%
generation
Increase website traffic 45% 49% 6%
Increase online sales

40% 40% 19%
revenue
Increase brand or
34% 49% 17%
product awareness
Increase offline sales

22% 42% 36%
revenue
Improve brand or
19% 53% 28%
product reputation
Improve public
6% 46% 48%
relations
PPC can require a significant investment of both time and money, but when executed effectively, the
rewards are well worth it. PPC has been rated as a very effective tactic in achieving increased lead
generation, website traffic, increased online sales revenue and increased brand or product awareness,
making this an important tactic for B2B and B2C organizations alike.
It's possible that the perception of PPC's effectiveness for increasing offline sales revenue is a result of
difficulties in tracking the original source(s) of offline sales. Additionally, the improvements PPC has on
website traffic and increased brand or product awareness will lead to an increase in offline sales revenue.
The effectiveness of PPC in improving brand and product reputation or public relations is undervalued, with
only 19% and 6% of organizations indicating that PPC was a very effective tactic in achieving these
objectives, respectively. PPC can be used to improve brand or product reputation and improve public
relations. Having a PPC ad appear above a direct competitor's ad conveys authority on the paid side of
search. Additionally, PPC can be utilized to address any negative press that may appear on search results
pages. These are just a couple of examples of how PPC can be used to improve reputation and PR.
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SOCIAL IMPACTS PPC PERFORMANCE

CHART: AVERAGE CLICKTHROUGH RATES BY SOCIAL MEDIA USE
Q. Please indicate your organization's approximate clickthrough rate for paid search engine traffic (PPC), not
including contextual or affiliate advertising.
Social Media Users Non-Social Media Users

6%
3%
Average clickthrough rate
For the purpose of this chart, and the entirety of this report, we refer to "social media users" as
organizations who indicated that they currently integrate social media with their search campaigns, and
"non-social media users" as those organizations that do not.
When organizations discuss integrating social with search, the conversation typically centers on organic
search. What this year's study revealed is that social marketing can impact PPC performance, as well.
Social media can be a very effective tactic in improving a number of soft business objectives, such as
increasing awareness, improving brand or product reputation and improving PR, along with a number of
hard business objectives. The improvements social marketing has on these soft metrics, however, is what
impacts the performance of PPC campaigns.
When a brand has an increased awareness and improved reputation and PR, search engine users are more
likely to click through from their PPC ads because they may have already heard of the brand, and may
already have a positive impression of this brand from things they've heard about it through social media.
Organizations that integrate social media with search campaigns experience improvements to PPC
campaigns in other key areas over organizations who do not integrate social media – all of which will be
reviewed in this report.
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MOBILE SEARCH IN ITS INFANCY AS A MARKETING TACTIC

CHART: THE IMPACT OF MOBILE SEARCH
How do you think mobile search is impacting your business currently and how do you think it will impact
your business in the next 1-5 years?
Current impact Expected future impact
47%
29%
28% 28%
24%
15%
Great level of impact Mid level of impact No impact
This chart shows the current level of impact mobile search is having on organizations, in comparison to the
level of impact mobile search is expected to have on organizations within the next 1 to 5 years.
Overall, the majorities of organizations are both currently having some level of impact from mobile search
and expect to be impacted within the next 1 to 5 years.
When considering a great level of impact, the expected future impact of mobile search exceeds the current
level of impact by 60%. When considering a mid-level of impact, the expected future impact of mobile
search exceeds the current level of impact by 68%. This indicates that organizations perceive mobile search
as a marketing tactic that is in its infancy and has not yet reached its full potential for impact. This is
expected because mobile search is a fairly recent search innovation.
In this report, we will analyze the impact of mobile search on various types of organizations, including
organization size, primary market and industry.
8
LOCAL SEARCH HAS REACHED MATURITY AS A MARKETING TACTIC

CHART: THE IMPACT OF LOCAL SEARCH
How do you think local search is currently impacting your business, and how do you think it will impact your
business in the next 1-5 years?
Current impact Expected future impact

37%
36%
35%
34%
30%
27%
Great level of impact Mid level of impact No impact
This chart shows the current level of impact local search is having on organizations in comparison to the
level of impact mobile search is expected to have on organizations within the next 1 to 5 years.
Much like mobile search, the majorities of organizations are both currently having some level of impact
from local search and expect to be impacted within the next 1 to 5 years.
The difference in the impact of local search is that the expected future impact does not vary greatly from
the current level of impact. When considering a great level of impact, the expected future impact only
increases by 11% over the current level of impact. When considering a mid-level of impact, the expected
future impact actually decreases by 3%.
This indicates that organizations perceive local search as a mature marketing tactic, and that it has reached
its potential for level of impact. Local search was introduced to the search market earlier than mobile
search, so the difference in maturity between these two tactics is expected.
In this report, we will analyze the impact of local search on various types of organizations and the use of
local search tactics.
9
SEARCH PARTNERSHIPS
The search engine market has recently undergone significant changes. For many years, Google has
dominated the space; however, the partnership of Bing and Yahoo! aims to make the search market a race
of two competing key players. In the upcoming months, the search alliance between Yahoo! and Bing is
planned to affect organizations with the transition of marketing on Yahoo! and Bing separately to
advertising on both search engines through one interface.
How does this alliance compete with Google's market share? In this report, you will receive data from
industry leading sources on the state of the search market including changes in search volume over the last
year for Bing and Yahoo!, and how they compare to Google as well as other search engines.
Social media's popularity growth has forced search engines to act more quickly. When social media began
offering search capabilities that displayed results as they were being published, search engines knew they
had to react. Search engines began partnering with social media sites to deliver real time search, which is
now available on Google, Yahoo! and Bing.
These partnerships are increasing the power of search engines and delivering more relevant, complete and
up-to-date results than ever before. The delivery of improved search engine advertiser experiences and
search user experiences, as a result of search and social partnerships, will solidify search's place in the
marketing mix for many years to come.
10
CHAPTER 1: PPC BENCHMARKS

This report begins with PPC benchmarks because this is the most pertinent data to many organizations. You
need to know if your PPC budget plans are in line with the competition in your industry or with other
organizations of your size and target market. You also need to know how your organization's performance
in various PPC metrics compares to those of other organizations in your industry, of your size, target
market, etc. You also need to know what the latest best PPC practices are so that they can be employed to
your benefit.
This first chapter of the 2011 Search Marketing Benchmark Report – PPC Edition will deliver in all of these
key areas, as well as provide you with insights collected during this study from other PPC marketers
candidly explaining their experiences with PPC.
Throughout this chapter, and for the entirety of this report, we are using the following definitions as
breakouts.
We are defining social media users as the respondents who indicated that they integrate their social media
tactics with their search campaigns, and the non-social media users as those who do not.
We are defining the following stages of PPC maturity: Phase I: Trial as those respondents who had no
repeatable process for performing PPC; Phase II: Transition as those respondents who had an informal
process that was randomly performed for PPC; and Phase III: Strategic as those respondents who had a
formal process for PPC that was routinely performed.
11
BUDGETING FOR PPC

In this section, we take a deep look into online marketing budgets and budgeting for SEO, including online
marketing's share of the overall budget, online budget allocation, SEO budget allocation, expected changes
in SEO budgets and actual dollar amounts of SEO budgets.
ONLINE MARKETING BUDGETS

CHART: ONLINE MARKETING'S SHARE OF THE BUDGET
Q. What percentage of your organization's total marketing budget is allocated to online marketing tactics –
including personnel, media, and other direct costs of online marketing?
81-90% 91-100%
5% 6%
71-80% < 10%

6% 18%
61-70%
3%
51-60%
3%
41-50%
8%
10-20%
31-40% 28%
5%
21-30%
18%
The majority of our respondents indicated that they were spending most of their marketing budgets offline,
with 64% of them indicating that they invest 30% or less of their total marketing budget into online tactics.
Budget, however, may not be an indication of participation level. In general, online marketing tactics tend
to be more cost effective than offline tactics, requiring less of an investment. Organizations may be
attempting to accomplish what they can online with the least possible cost by adding online marketing
responsibilities to existing staff. With offline marketing tactics, costs are usually fixed and unavoidable.
12
CHART: ONLINE MARKETING BUDGET ALLOCATION

Q. What percentage of your online marketing budget is allocated to each of the following tactics – including
personnel, media and other direct costs?
Overall Average
Website 25%
Paid search (PPC) 18%
Email 15%
Search engine
14%
optimization (SEO)
Social media 8%
Online display
5%
advertising
Other online marketing 5%
When looking at the online marketing budget, it makes perfect sense that websites top the list. The cost
and man hours required to design a website can be staggering. While many organizations don't require a
redesign of their website every year, the cost of those who did this year was significant enough to make
website's share of our respondent's budgets the greatest.
It's not surprising that paid search (PPC) and email came in above SEO. With PPC, there are significant costs
for clicks and agency costs. With email, there may be costs for list rental, email design, content creation and
email deployment.
The fact that SEO and social media are taking up less of the online marketing budget is a plus for these
channels. Both can be very cost effective, but generally require some financial investment and a
considerable investment of man hours.
13
CHART: ONLINE MARKETING BUDGET ALLOCATION BY ORGANIZATION SIZE
Sm (<100 emp) Med (100-1,000 emp) Lg (>1,000 emp)
26%
Website 26%
22%
17%
22%
14%
Email 16%
17%
17%
Search engine
12%
optimization (SEO)
9%
10%
Social media 5%
4%
4%
Online display
7%
advertising
10%
5%
5%
14
CHART: ONLINE MARKETING BUDGET ALLOCATION BY PRIMARY MARKET
Businesses (B2B) Consumers (B2C) Both (B2B & B2C)
27%
Website 23%
26%
17%
15%
16%
Email 13%
14%
14%
Search engine
13%
optimization (SEO)
17%
7%
Social media 8%
10%
5%
Online display
6%
advertising
5%
4%
5%
15
CHART: ONLINE MARKETING BUDGET ALLOCATION BY INDUSTRY SECTOR

Business / consumer services Computer hardware / software
Retail / ecommerce Education / healthcare
24%
22%
Website
23%
27%
16%
21%
Paid search (PPC)
26%
20%
16%
16%
Email
12%
13%
17%
Search engine 14%
optimization (SEO) 14%
12%
9%
8%
Social media
9%
8%
5%
Online display 7%
advertising 4%
5%
4%
5%
Other online marketing
4%
3%
16
CHART: ONLINE MARKETING BUDGET ALLOCATION BY PPC MATURITY
Phase I: Trial Phase II: Transition Phase III: Strategic
30%
Website 23%
19%
10%
29%
18%
Email 13%
14%
13%
Search engine
15%
optimization (SEO)
12%
10%
Social media 6%
5%
5%
Online display
5%
advertising
7%
4%
5%
17
PPC METRICS
It is critical for organizations to understand industry benchmarks for various performance metrics to
measure their progress against. In this section, you will be provided with over 50 charts of important PPC
metrics encompassing each stage of the game from keywords to conversions. This section is broken out into
three steps based on the way a search engine user executes their search activities; they first enter
keywords, then clickthrough, and then convert. For advertisers, however, all steps from keywords to
conversions require continued maintenance and optimization.
STEP 1: KEYWORDS
Effective PPC campaigns begin with excellent keyword targeting. In this section, you will receive metrics on
number of target keywords, commonly used match types and quality scores for various types of
organizations. You will also receive insights from other PPC advertisers on the best tactics in improving
quality score.
CHART: NUMBER OF TARGET PPC KEYWORDS

Q. Approximately how many key terms do your organization currently bid on?
Percent of respondents
1 - 100 34%
101 - 500 23%
501 - 1,000 11%
1,001 - 5,000 10%
5,001 - 10,000 5%
More than 10,000 2%
More than 20,000 4%
More than 50,000 10%
The majority of organizations are targeting 500 keywords or less for their PPC campaigns and this may be a
result of the bandwidth of their PPC teams. The lower the quantity of key terms that an organization bids
on, the amount of workload that is required to manage and optimize campaigns decreases. This could also
be a result of budgetary constraints, as the more keywords an organization bids on, the need for increased
budgets becomes greater.
54
CHART: NUMBER OF TARGET PPC KEYWORDS BY ANNUAL PPC BUDGETS

Less than $49,999 $50,000 - $99,999
$100,000 - $499,999 $500,000 or more
82%
1 - 100 5%
9%
0%
68%
101 - 500 18%
11%
0%
44%
501 - 1,000 22%
28%
6%
47%
1,001 - 5,000 6%
35%
6%
11%
5,001 - 10,000 22%
44%
22%
0%
More than 10,000 0%
50%
50%
14%
More than 20,000 0%
43%
43%
6%
More than 50,000 0%
13%
81%
The annual PPC budgets in the above chart represent search engine, contextual or affiliate advertising and
does not include in-house staff salaries. This chart demonstrates the relationship between number of target
keywords and PPC budgets. The number of keywords an organization targets increases as PPC budgets
increase.
55
CHART: NUMBER OF TARGET PPC KEYWORDS BY ORGANIZATION SIZE

43%
1 - 100 31%
14%
24%
101 - 500 28%
17%
10%
501 - 1,000 6%
19%
10%
1,001 - 5,000 8%
11%
2%
5,001 - 10,000 11%
8%
2%
More than 10,000 0%
6%
4%
More than 20,000 0%
8%
4%
17%
Because the number of keywords organizations are targeting with PPC is relative to the amount of PPC
budgets, and small organizations tend to have lower PPC budgets than medium- and large-sized
organizations, it is expected that small organizations would target fewer keywords on average than medium
or large-sized organizations.
56
CHART: NUMBER OF TARGET PPC KEYWORDS BY PRIMARY MARKET

36%
1 - 100 26%
43%
25%
101 - 500 20%
23%
7%
501 - 1,000 15%
14%
14%
1,001 - 5,000 7%
6%
4%
5,001 - 10,000 9%
3%
5%
More than 10,000 0%
0%
3%
More than 20,000 7%
3%
7%
9%
B2C organizations tend to have larger PPC budgets and more positive perceptions of the effectiveness of
PPC towards achieving various business objectives than B2B organizations or organizations with mixed
primary targets. The fact that B2C organizations are the most likely to be targeting more than 50,000
keywords in their PPC campaigns is a result of their budgets and perceptions of PPC.
57
CHART: NUMBER OF TARGET PPC KEYWORDS BY INDUSTRY SECTOR

25%
1 - 100 39%
30%
29%
34%
101 - 500 20%
9%
41%
6%
501 - 1,000 7%
22%
6%
9%
1,001 - 5,000 14%
9%
6%
0%
5,001 - 10,000 7%
9%
0%
3%
More than 10,000 7%
0%
0%
6%
More than 20,000 2%
4%
12%
16%
More than 50,000 5%
17%
6%
It's surprising that organizations in the computer hardware / software sector are the most likely to be
targeting 1–100 keywords for their PPC campaigns. These organizations generally require a large number of
keywords to cover a range of products, features and targets.
Earlier in this chapter, we learned that organizations in the computer hardware / software sector were the
least likely to indicate that PPC was producing measurable ROI, and to increase budget liberally for
continuous improvement. Perhaps these organizations would receive better returns from PPC by expanding
their targets.
58
STEP 2: CLICKS
Once a search engine user conducts a search a specified keyword, the next step is to click through on the
ad(s) that are most relevant to what they're looking for, or entice them in some other way. For advertisers,
this means executing a continual process of differentiating their ads from the competition on the search
engine results pages, refining account structure, optimizing ad copy and testing various positions to achieve
their greatest potential for clickthrough rates. In this section, we'll analyze PPC clickthrough rates, cost-per-
click, percentages of bad, unwanted or irrelevant clicks and total percentages of inbound traffic from PPC
for various types of organizations.
CHART: AVERAGE PPC CLICKTHROUGH RATE

Q. Please indicate your organization's approximate clickthrough rate for paid search (PPC) traffic, not
Overall Average
5%
This chart represents the overall average clickthrough rate for all participating organizations in this year's
study. Overall, approximately 5% of these organizations' ads that get displayed receive a click.
Clickthrough rates can vary drastically by industry and target market among other intricacies and this
section provides you with overall averages for various types of organizations. While these metrics are
important to consider, another important measurement of an organization's performance that must be
considered is an evaluation of their own historical performance for various metrics and whether figures are
improving or declining against that history.
73
CHART: AVERAGE PPC CLICKTHROUGH RATES BY ORGANIZATION SIZE

8%
5%
4%
Large organizations with more than 1,000 employees tend to have greater brand or product awareness and
reputation than organizations of small or medium sizes. It is this increased awareness and reputation that
results in a drastically higher clickthrough rates for large organizations.
74
CHART: AVERAGE PPC CLICKTHROUGH RATES BY PRIMARY MARKET

7%
6%
4%
B2B organizations receive a clickthrough rate that is approximately 75% lower than B2C organizations and
50% lower than organizations with mixed primary targets on average.
This is likely a result of two factors. First, this could be an indication of an educated audience for B2B
organizations. Other businesses may be more aware of the fact that PPC ads are sponsored and may rely
more on organic results. Additionally, B2B organizations may be less efficient in optimizing their campaigns
for higher clickthrough rates than B2C organizations or organizations with mixed primary targets.
75
CHART: AVERAGE PPC CLICKTHROUGH RATES BY INDUSTRY SECTOR

8%
7%
6%
2%
Organizations in the business or consumer services sector are the most likely to achieve the highest
clickthrough rates on their PPC ads. On average, 8% of the ads shown for organizations in the business or
consumer services sector receive clicks.
It is common for organizations in the services sector to have highly-localized businesses and stand to
receive high clickthrough rates through effective execution of geo-targeting.
76
CHART: AVERAGE PPC CONVERSION RATE

Q. What is your organization's conversion rate for paid search (PPC) traffic?
Paid search traffic
9%
Overall Average
When considering PPC advertising, a conversion rate is the number of conversions an advertiser receives on
their ads in proportion to the number of clicks. On average, organizations are converting approximately 9%
of clicks.
Like any PPC metric, conversion rates can vary dramatically depending on industry, primary market, etc. and
organizations need to measure their results based on their own historical performance along with industry
benchmarks.
96
CHART: AVERAGE PPC CONVERSION RATES BY CONVERSION DEFINITION

New lead created Online sale completed
Email address aquired Item added to online shopping cart
15%
10% 10%
9%
Average conversion rates
As we learned in the previous section, conversions can take place in a variety of formats based on an
organization's primary goals, and the above chart provides average conversion rates for various definitions.
The definition receiving the highest conversion rate is the action of a web visitor adding an item to an
online shopping cart. This is also the action that requires the lowest level of commitment. If web visitors
add an item to an online shopping cart, they are not agreeing to purchase that item. They are not
necessarily signing up to be contacted by a sales representative. They are not even necessarily opting into
an email list. It is this low level of commitment that causes the higher level of conversion.
97
CHART: AVERAGE PPC CONVERSION RATES BY ORGANIZATION SIZE

12%
9% 9%
On average, large organizations have significantly higher conversion rates than small- or medium-
sizedorganizations. Earlier in this chapter, we learned that large organizations were also likely to have
significantly higher clickthrough rates on their PPC ads.
It is because large organizations tend to have greater brand or product awareness and more established
reputations than small- or medium-sizedorganizations that they receive higher clickthrough and conversion
rates.
98
CHART: AVERAGE PPC CONVERSION RATES BY PRIMARY MARKET

12%
9%
8%
On average, B2B organizations tend to have the lowest conversion rates when being compared to B2C
organizations or organizations with mixed primary targets.
Other businesses may be more aware of the sales processes that typically begin for prospects post
conversion and may not be ready to be contacted by a sales representative. If a web visitor has this
knowledge, it requires a higher level of commitment to convert. As we learned when analyzing conversion
rates by various definitions, the greater the level of commitment that is required from the web visitor, the
lower the conversion rate tends to be.
99
CHART: AVERAGE PPC CONVERSION RATES BY INDUSTRY SECTOR

16%
11%
8% 8%
100
CHART: AVERAGE COST PER CONVERSION

Q. Please indicate your organization's approximate cost-per-conversion from paid search (PPC) traffic, not
Overall Average
$43.44
Average cost-per-conversion
Cost-per-conversion is the amount an organization pays for each web visitor that converts on their site. For
PPC advertising, organizations are paying approximately $43.44 per conversion on average.
Organizations may be willing to pay greater or lower amounts per conversion depending on the average
purchase amount or deal size of each conversion. Additionally, cost-per-conversion can vary greatly
depending on industry, target market, etc.
102
CHART: PERCENT OF TOTAL LEADS GENERATED FROM PPC

Q. Please indicate your organization's approximate percentage of total leads generated from paid search
(PPC) traffic, not including contextual or affiliate advertising.
Overall Average
16%
Percent of leads generated from PPC
The results of organization's percentages of leads generated from PPC correspond with the percentages of
inbound website traffic. The relationship between these two metrics indicates that PPC traffic on average
tends to convert at a similar rate as website traffic from other sources, such as organic search, direct visits
or other visits generated from marketing campaigns, such as email.
107
CHART: PERCENT OF TOTAL LEADS GENERATED FROM PPC BY ORGANIZATION SIZE

19%
16%
15%
On average, large organizations receive the greatest percentage of their leads from PPC when compared to
organizations of small or medium size. Large organizations also tend to have a lower cost-per-click and
higher percentage of total inbound traffic from PPC in comparison.
Because large organizations have a lower cost-per-click, they are able buy more traffic from PPC for the
same cost as small- or medium-sized organizations that tend to have a higher cost-per-click, and thus, PPC
represents a greater percentage of their total inbound traffic. It is natural for an increased percentage of
total inbound traffic to cause a greater percentage of total leads generated.
108
CHART: PERCENT OF TOTAL LEADS GENERATED FROM PPC BY PRIMARY MARKET

18%
16%
15%
The above chart is another representation of the relationship between the percentage of inbound traffic
generated from PPC and the percentage of leads generated from PPC. When we analyzed inbound traffic,
we learned that B2C organizations were the most likely to receive a greater percentage of their inbound
traffic from PPC and from the above chart we learn that these organizations are also the most likely to be
receiving a larger percentage of total leads generated from PPC.
109
CHART: PERCENT OF TOTAL LEADS GENERATED FROM PPC BY INDUSTRY SECTOR

20%
18%
16%
15%
110
CHART: QUALITY OF LEADS GENERATED FROM PPC

Q. How would you rate the quality of leads generated from paid search (PPC)?
Percent of respondents
69%
18%
13%
The quality is low The quality is mixed These are our highest quality
of leads
Organizations have a need not only for a high volume of leads, but also for leads of high quality and the
definition of a high quality lead will vary widely from one organization to another. The perception on the
quality of leads generated from PPC as a whole is that leads generated from PPC are of mixed quality.
In the 2011 Search Marketing Benchmark Report – SEO Edition, we learned that the majority of
organizations also perceive the lead quality from organic search to be mixed.
The mixed quality of leads generated from PPC is less of a reflection on this marketing tactic as it is on the
nature of modern buying cycles.
111
CHART: QUALITY OF LEADS GENERATED FROM PPC BY ORGANIZATION SIZE

78%
71%
66%
21% 20%
15%
13%
9%
7%
of leads
112
CHART: QUALITY OF LEADS GENERATED FROM PPC BY PRIMARY MARKET

76%
73%
60%
22%
17% 16%
9% 8% 8%
of leads
The level of response from B2C organizations in receiving their highest quality of leads from PPC far exceeds
the level of response from B2B organizations or organizations with mixed primary targets in the same
category.
B2C organizations are also the most likely to perceive PPC as a very effective tactic in achieving a number of
business objectives including increased website traffic, increased brand or product awareness, improved
reputation, and increased sales. Because of the benefits B2C organizations perceive from PPC towards these
business objectives, they are also more likely to perceive the leads generated from PPC as the highest in
quality.
113
CHART: QUALITY OF LEADS GENERATED FROM PPC BY INDUSTRY SECTOR

79%
77%
63% 63%
20% 20%
16% 17% 16% 17%
7%
3%
of leads
114
CHART: QUALITY OF LEADS GENERATED FROM PPC BY PPC MATURITY

Phase I: Trial Phase II: Transition Phase III: Strategic
74%
65%
63%
21% 21%
16% 16%
13%
11%
of leads
Organizations in the strategic phase of PPC maturity are the most likely to perceive leads from PPC as the
highest in quality and also the least likely to perceive leads from PPC as low quality. Because these
organizations have formal processes for PPC that can be routinely performed, they are likely more efficient
in their keyword research and targeting practices. Increased efficiencies in these areas of PPC can lead to an
improvement in the quality of traffic and leads generated.
115
Contact
Pamela Seiple
PR Manager, HubSpot
th
One Broadway, 5 Floor
Cambridge, MA 02142
pseiple@hubspot.com
908-347-2963
FACT SHEET
On the Web
• HubSpot Website: http://www.hubspot.com
• HubSpot Internet Marketing Blog: http://blog.hubspot.com
• HubSpot Company & Product News Blog: http://www.hubspot.com/blog
Overview
HubSpot is an Internet marketing startup whose software helps businesses get found online, generate more inbound
leads and convert a higher percentage of those leads into paying customers. HubSpot's software platform includes tools
that allow professional marketers and small business owners to manage search engine optimization, blogging and social
media, as well as landing pages, lead intelligence and marketing analytics.
• HubSpot was founded in 2006 by CEO Brian Halligan and CTO Dharmesh Shah and is based in Cambridge, MA
across the street from MIT, where the company was conceived.
• General Catalyst provided $5 million in VC funding in 2007.
• Matrix Partners provided $12 million in VC funding in 2008.
Products
• HubSpot offers inbound marketing software that allows you to:
o Generate more qualified traffic to your website
o Capture more visitors as qualified leads
o Convert more leads into paying customers
o Analyze and optimize every step of the process
• With the HubSpot inbound marketing software, you can:
o Quickly and easily edit your website
o Generate traffic by adding a business blog
o Improve search engine relevance, ranking and traffic
o Collect intelligence on prospects
o Analyze your lead generation trends
o Analyze search terms and traffic referrals
• HubSpot requires no technical background or IT support, allowing everyday business and marketing people to
easily generate leads and take advantage of Web 2.0 Internet marketing techniques. HubSpot's integrated
approach allows for a more efficient way of tracking/measuring the success of your online marketing programs.
Resources
• HubSpot is a leader in all topics inbound marketing and regularly provides free resources such as webinars,
whitepapers, eBooks, marketing tools, videos, communities, blog articles, studies and reports, etc.
• HubSpot offers free online tools at Grader.com that measure a variety of marketing initiatives’ effectiveness.
• HubSpot manages an inbound marketing community at InboundMarketing.com.
• HubSpot offers an ongoing marketing retraining program called Inbound Marketing University at
InboundMarketing.com/University.
• HubSpot produces a weekly Internet marketing video podcast called HubSpot TV at http://hubspot.tv.
Events, Accolades & Coverage

• HubSpot regularly speaks at, sponsors and participates in industry conferences and events such as OMMA
Global, PubCon, Business of Software, Search Engine Strategies, SMX, Venture Summit, IMS, etc.
• HubSpot has won awards and been recognized by a number of organizations such as NEDMA, Mass High Tech,
MassTLC, AlwaysOn, Red Herring, MITX, ad:Tech, etc.
• HubSpot has been featured in various media and publications including The Wall Street Journal, Boston Globe,
The New York Times, ABC News, Mashable, TechCrunch, etc.
###

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EXCERPT

2011 Search Marketing Benchmark Report – PPC Edition

To purchase additional copies of this report, please visit

Yes, bulk discounts are available for multiple copies. Contact:

Executive Summary ................................................................................................................ 3

Chapter 1: PPC Benchmarks ................................................................................................. 2

Budgeting for PPC ................................................................................................................ 12

Chart: Expected changes in PPC budgets by PPC maturity........................................................ 27

PPC metrics ........................................................................................................................... 54

Chart: Most commonly used match types by PPC maturity ......................................................... 64

Chart: Average cost-per-conversion by social media use.......................................................... 106

Chapter 2: PPC Resources................................................................................................. 123

PPC Resources.................................................................................................................... 124

Chapter 3: Mobile search.................................................................................................... 132

Mobile search ...................................................................................................................... 133

Chapter 4: Local search...................................................................................................... 144

Local Search ........................................................................................................................ 145

Chapter 5: The Search Engine Market .............................................................................. 160

State of the search market ................................................................................................. 161

Chapter 6: Agency Perspectives ....................................................................................... 168

The agency perspective...................................................................................................... 169

Chart: The efficiency of PPC tactics – agency perspective........................................................ 170

Appendix .............................................................................................................................. 175

PPC Edition Highlights

THE STATE OF PPC

PERCEPTIONS OF PPC AT BUDGET TIME

PERCEPTIONS ON THE MOST EFFECTIVE PPC OBJECTIVES

Very effective Somewhat effective Not effective

Increase website traffic 45% 49% 6%

Increase online sales

Increase offline sales

SOCIAL IMPACTS PPC PERFORMANCE

Social Media Users Non-Social Media Users

Average clickthrough rate

MOBILE SEARCH IN ITS INFANCY AS A MARKETING TACTIC

Current impact Expected future impact

Great level of impact Mid level of impact No impact

LOCAL SEARCH HAS REACHED MATURITY AS A MARKETING TACTIC

Current impact Expected future impact

Great level of impact Mid level of impact No impact

CHAPTER 1: PPC BENCHMARKS

BUDGETING FOR PPC

ONLINE MARKETING BUDGETS

71-80% < 10%

CHART: ONLINE MARKETING BUDGET ALLOCATION

Paid search (PPC) 18%

Other online marketing 5%

CHART: ONLINE MARKETING BUDGET ALLOCATION BY ORGANIZATION SIZE

Sm (<100 emp) Med (100-1,000 emp) Lg (>1,000 emp)

CHART: ONLINE MARKETING BUDGET ALLOCATION BY PRIMARY MARKET

Businesses (B2B) Consumers (B2C) Both (B2B & B2C)

CHART: ONLINE MARKETING BUDGET ALLOCATION BY INDUSTRY SECTOR

CHART: ONLINE MARKETING BUDGET ALLOCATION BY PPC MATURITY

Phase I: Trial Phase II: Transition Phase III: Strategic

CHART: NUMBER OF TARGET PPC KEYWORDS

101 - 500 23%

501 - 1,000 11%

1,001 - 5,000 10%

More than 10,000 2%

More than 20,000 4%

More than 50,000 10%

CHART: NUMBER OF TARGET PPC KEYWORDS BY ANNUAL PPC BUDGETS

CHART: NUMBER OF TARGET PPC KEYWORDS BY ORGANIZATION SIZE

CHART: NUMBER OF TARGET PPC KEYWORDS BY PRIMARY MARKET