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SEMPO Highlights U.S. Bancorp Piper Jaffray Research that Demonstrates the Value of Search Engine Marketing

San Jose, CA, August 20, 2003 – The Search Engine Marketing Professional Organization (SEMPO) held its inaugural meeting this evening at the Search Engine Strategies 2003 Conference & Expo. One of the highlights of the meeting was U.S. Bancorp Piper Jaffray's industry research that demonstrates search engine marketing has the lowest cost-per-lead and the highest return on investment (ROI) of any component of the marketing mix.

Safa Rashtchy, U.S. Bancorp Piper Jaffray's Senior Research Analyst, Internet Media and Marketing, said, "The search market has become the Holy Grail of Internet advertising and continues to grow faster than our expectations. We believe search is actually gaining some market share from other types of online marketing. Our initial estimates of $7 billion by 2007 is most likely to be too conservative and we believe that we are still at the early stages of an expanding and large market."

In March 2003, U.S. Bancorp Piper Jaffray published an industry report titled "The Golden Search - Dynamics of the Online Search Market." Its key findings included the following:

  • Online search industry represents a major growth market, growing at a compounded rate of 35% annually. The key driver of growth is the increased popularity of search as the most efficient way to find products and information, and simultaneously the rise of search as the best way for advertisers to find and acquire customers.
  • There are more than 550 million global searches performed daily on the Web. Internet users in the United States alone perform about 245 million searches per day.
  • Because of potency and high ROI of search, online merchandisers and businesses are likely to use it more, at least in the 20% to 30% range of their marketing budgets, as a customer acquisition vehicle.

The U.S. Bancorp Piper Jaffray search engine research also found that paid listings of the type offered by Overture and Google have the highest overall satisfaction and ROI of various Internet advertising methods.

Types of advertisingOverall satisfactionReturn on investment
Paid listings (Overture, Google)  41%29%
Opt-in e-mail  33%24%
Paid inclusion  31%23%
CPC banners  21%16%
CPM banners  19%12%

Source: Jupiter Media, Harris Interactive

U.S. Bancorp Piper Jaffray also compared the cost per lead across various direct marketing methods. Using data from Jack Meyers LLC and The DMA, U.S. Bancorp Piper Jaffray estimated that the cost per lead was $0.29 for search, $0.50 for e-mail, $1.18 for the yellow pages, $2.00 for banner ads, and $9.94 for direct mail.

Because of its high conversion ratio of visitors to buyers and its relatively low cost, U.S. Bancorp Piper Jaffray estimated the average acquisition cost using search is about $10 to $15 versus the online average of $38.

Click here for a copy of the complete report.

About the Search Engine Marketing Professional Organization (SEMPO) 
SEMPO is a global non-profit organization serving the search engine marketing industry and marketing professionals engaged in it. Its purpose is to provide a foundation for industry growth through building stronger relationships, fostering awareness, providing education, promoting the industry, generating research and creating a better understanding of search and its role in marketing.

Representing thousands in 40 countries, SEMPO has more than 800 members. It represents the common interests of companies and consultants worldwide and provides them with a voice in the marketplace. SEMPO's education and outreach initiatives are funded in part by Yahoo!, Google, SMX, Search Engine Strategies, DoubleClick, Baidu, and MediaPost.

 

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