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Performance-Based Ads Rise Like Cream in '09

Business-to-business marketers plan to raise spend on online performance-based ads in 2009 — at the expense of traditional display ads — as they seek clearer, more measurable returns during the economic downturn, according to a research report from Econsultancy, sponsored by Convera.

78% of advertisers plan to raise spending on CPA (cost-per-action/acquisition) formats this year; 67% plan to increase spending on cost-per-lead (CPL) ads; and just under half will increase spend on cost-per-click (CPC), reports MarketingCharts.

In contrast, only 29% say that spending on CPM (cost-per-mille/online display advertising) will increase this year.

Econsultancy's "Vertical Search (B2B) Report" 2009, is a follow-up to similar research conducted a year ago among publishers and advertisers. It explores a wide range of vertical-search-related issues including how digital marketing professionals are finding work-related information online, the benefits of industry-specific (vertical) search engines vs. popular search engines, and the challenges facing publishers and advertisers as they move online and attempt to monetize offerings.Key research findings:

  • Two thirds of respondents (67%) say that the "need to find information quickly" is the main advantage of vertical search engines from the perspective of business users.
  • The majority of publishers surveyed (53%) incorporate "basic" search site features on their site, compared with 41% who have integrated "more sophisticated" search tools. Only 6% have no site search features on their website at all.
  • Just more than one-third of publishers (37%) use in-house technology for site search. The remaining publishers either use search embedded within the content management system (22%), licensed technology (17%) or freeware such as open source technology (15%).
  • One-third of publishers surveyed (33%) offer the ability to search third-party content from their website, and a further fifth of publishers (18%) are planning to implement this in the future.
  • Overall, 91% of publishers surveyed make use of search log analytics, and 28% refer to this data frequently. Only a third of publishers (36%) say they derive strategic value from this data.
  • Since 2007, the proportion of respondents using vertical search engines (including site search on B2B trade websites) at least once a week for business searches has increased from 45% to 50%.

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  • Popular search engines are still much more likely than vertical sites or subscription resources to deliver useful and relevant B2B marketing information.

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  • Half of respondents have 30 or more work-related bookmarks or favorites in their browser menu, and 61% use such bookmarks frequently as a way of navigating to information.

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  • A quarter of internet marketing professionals (26%) use their mobile / cell phone for searching at least once a day, and 18% use their phone or device for a work-related search at least daily. Three-quarters (75%) of respondents say that the quality of the mobile search experience is average or poor, compared to only 25% who say that it is excellent or good.
  • 61% of respondents access work-related online networks (e.g. LinkedIn) at least once a week.
  • Digital marketing professionals are more likely than a year ago to be using widgets (either desktop or in-browser) that provide customized internet marketing and business information (now 47% of respondents compared with 35% a year ago).
  • Software-as-a-Service (SaaS) is being widely used by companies both for on-site search and for a range of other functions. More than half of survey respondents report that their businesses are using SaaS for email (77%), web hosting (74%), sales and marketing (62%), CMS (59%), file and assets storage (57%), site search (57%) and ad serving (51%).

"Publishers are facing extremely challenging times and, more than ever, need to think about how they can adapt to trends such as the growing appeal of performance-based advertising and the increased use of widgets," said Linus Gregoriadis, Econsultancy's research director.

About the study: The research is based on a survey of more than 500 media and internet marketing professionals, including 152 publishers and 118 advertisers. The survey was carried out online at the end of 2008.

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