As Efficient Frontier reported on Monday that Facebook CPC rates have grown 40% quarter over quarter due to rising popularity, a study from SEMPO and eConsultancy suggests that nearly half of marketers are using CPC campaigns on the social network — 47% of North American respondents and 45% of those elsewhere in the world.

Beyond CPC campaigns, 84% of companies are using Facebook as a promotion tool versus 73% that said the same last year. While 75% have a Twitter presence, only 52% are using LinkedIn as a promotional tool. However, more than a quarter of North American operations are running PPC campaigns on LinkedIn.

In general, search marketing is expected to grow from a $16.6 billion industry in 2010 to a $19.3 billion dollar one in 2011. Efficient Frontier also reported that paid spend is up 17% during the first quarter of 2011 alone.

While Facebook may be bringing in more CPC revenue, advertising on the social network was not the most important issue to the majority of respondents. Around 80% said that the growth of the mobile Internet was “significant” or “highly significant.” Agencies and publishers both claimed local search had ascended in prominence, with agencies reporting 34% of client search budgets were spent at at a regional, city or sub-market level.

With the promotions of Calvin Wong to chief operating officer; Sushene Swenson to vice president of finance; and Jeremy Greenspan to vice president of Midwest sales, appssavvy added three new employees. Most recently East Coast sales manager for Betawave, Greg Ellis was appointed East Coast sales director. Sara Madsen, previously account director of client relations was named client strategist. Formerly the marketing manager for Gameloft, Kelly Gudahl has taken on the responsibilities of account manager.

PostRelease has appointed automotive digital marketing expert Tyler Tanaka to the new position of account director.

SEMPO announced the results of the election for its board of directors. Returning to the board are Chris Boggs, director of search engine optimization for ROSETTA; Massimo Burgio, founder and chief strategist for Global Search Interactive; Bruce Clay, president of Bruce Clay, Inc.; Dave Fall, SVP of product and operations of Clickable; Kevin Lee, CEO of Didit; and Jeffrey Pruitt, CEO of Acendant. New faces on the board include Rob Garner, strategy director for iCrossing; Mike Grehan, VP and global content director for Incisive Media; Kristjan Mar Hauksson, director of search and owner of Nordic eMarketing;Motoko Hunt, president and Japanese search strategist of AJPR; Dmitriy Minenko, online specialist in search engine marketing for Tourism British Columbia; Margaret Willette, search marketing manager for Intuit; and Michael Y. Xu, SVP of Beijing Gridsum Technology.

Search spend is more than $10 billion, and with ROI and performance-based results is now of primary importance to advertisers, but areas such as the words that aren’t being monetized can still be exploited, according to search panelists at the SES conference yesterday.

Populated by guys from Google, Microsoft, iProspect, SEMPO and Digitas, the State of Search discussion hit on some interesting points that I didn’t know, including the disconnect (still) between search marketers and their offline counterparts. Instead of intergrating marketing efforts, to refine advertising campaigns and see what works, search personnel still are working to convince management its value (though that is getting better).

Other interesting details:

- Two-thirds of online search users are driven to perform searches as a result of exposure to offline channels. TV and word of mouth influence over one-third.

Dollars spent online in order of revenue:

- Search
- Display Ads
- Video
- Rich media
- Classified
- Lead Generation
- Sponsorships
- Email

Search Barriers:

- insufficient personnel to manage programs
- risking ROI performance
- unable to meet financial targets
- difficulty proving effectiveness to management
- believe available technology unable to handle operational needs

– Express your opinion, comment below.

The survey cannot project the result of a shortage of search inventory (searches) caused by a major economic downturn. Search marketing spending is however, increasing at the detriment of print magazine advertising, website development and other marketing functions.

The survey by Radar Research was completed by 867 search engine advertisers and SEM agencies and administered via IntelliSurvey, Inc.

Key findings included:

• The North American SEM industry grew from $9.4 billion in 2006 to $12.2 billion in 2007, exceeding earlier projections of $11.5 billion for 2007.
• North American SEM spending is now projected to grow to $25.2 billion in 2011, up significantly from the $18.6 billion forecast a year ago.
• Marketers are finding more search dollars by poaching budget from print magazine spending, website development, direct mail and other marketing programs.
• Paid placement captures 87.4% of 2007 spending; organic SEO, 10.5%; paid inclusion, .07%, and technology investment, 1.4%.
• Google AdWords remains the most popular search advertising program, but both Google and Yahoo sponsored search spending has decreased from a year ago.

Jeffrey Pruitt, SEMPO president and EVP corporate partnerships for iCrossing stated “The spending statistics show search engine marketing continues to prove its worth in the larger marketing arena. However, in light of the concerns about the overall economy, it’s important to note some of this spending is the result of shifting marketing dollars from other offline and online marketing endeavors.”

The estimates in North American SEM spending increased from $18.6 billion to $25.2 billion. Many factors have created these assumptions including increased costs of keywords and PPC campaigns, advertiser demand, and greater consumer participation in search and increased interest in targeting, such as behavioral and demographic targeting of searchers, amongst others.

Gordon Hotchkiss, SEMPO chairman and president of Enquiro Search Solutions, Inc. added of the findings “While CPC price inflation has slowed, marketers are finally beginning to recognize the value of search, and we expect search prices will hold and may even continue to move upward based on survey data.”

According to the preliminary data, 59% of corporate advertisers see direct sales as the number one goal of SEM campaigns, beating out last year’s emphasis on brand awareness, which fell to 53%, and lead generation at 48%.

SEMPO is also finding that 42% of advertisers now have budgets dedicated entirely to SEM spending rather than ones siphoned off of spending for traditional campaigns. Organic search is the most popular form of SEM, with paid placement charting a close second.

“Search engine marketing has moved to the major leagues. Corporate advertisers are now dedicating funding to SEM and it makes sense they are expecting a clear return on investment from these new budgets,” said SEMPO president Dana Todd in a statement.

SEMPO will continue to collect survey data through the end of December to determine online search marketing trends and the industry attitude towards SEM spending. The organization is asking more than 1,000 marketing professionals to participate. The final results will be published in the first quarter of 2007.

“Corporate search marketers need help in convincing executives about budget needs, in determining the right skill set for hiring,” said committee co-chair Duane Forrester in a statement. “We also want to help people who are transitioning from bricks and mortar marketing to online marketing. There is a great educational need for people like myself, who basically are learning these tools on the job.”

Help will also come to search marketers from SEMPO’s in-house SEM committee, which formed last year to educate in-house SEM professionals about SEM tools like web analytics. In-house marketers can join SEMPO as individuals or as part of a corporate membership, and access any of its services. The organization is also recruiting members for its in-house SEM committee.

The survey found that 4/5 of advertisers said they were capable of handling an increase in PPC costs, but most of them could only handle a PPC increase of 30% or less. Three-quarters of all advertisers have also experienced a PPC cost increase over the last year. PPC marketers have responded by altering spending accordingly, and re-allocating funds from things like affiliate marketing, web development, and other forms of on- and off-line marketing and advertising.

“Despite increasing ad spend and year-to-year growth in the value of search engine marketing, we are likely nearing a pricing plateau as advertisers near their maximum efficiency,” said SEMPO chairman Gord Hotchkiss in a statement. Of the 553 respondents, 71% said they would try to increase their visitor conversion rate, and 62% said they would try to optimize their bidding strategies before reducing their ad spending.

Titled “The State of Search Engine Marketing 2005,” SEMPO’s report is based on an industry-wide survey of 553 respondents conducted by Radar Research and Intellisurvey. “This report confirms our belief that Search Engine Marketing has almost single-handedly revived a flagging online advertising marketplace after the stock market crashed in 2000,” said Kevin Lee, Chairperson of SEMPO, in the release. “As consumers have become increasingly reliant on search engines to navigate the Web, investors have shown a renewed interest in the digital technologies — and in search marketing in particular.”

The study found that four out of five advertisers utilize organic SEO, which accounted for approximately 11 percent of overall spending. It also revealed that paid inclusion accounted for just 4 percent of overall spending, with SEM technologies accounting for less than 2 percent of overall spending. The majority of SEM spending, however, was spent on paid placement, accounting for $4.7 billion (83%).

“The data shows that 2005 was a good year for search, but 2006 should be a great year,” SEMPO Research Committee Co-chair, Gord Hotchkiss said in the same release. “The growth shown has largely been driven by maturation in existing segments. Future growth will be fueled by an increased search presence from major advertisers and new monetization strategies from the major engines. The increased competitiveness in the marketplace will really drive the industry forward in the coming year.”