11 February 2009 | Author: L. Sutherland Head of Media Content

Search engine optimisation popularity to rise with ad prices

The power of search engine optimisation is never something to be underrated, but new findings from the Institute of Practitioners in Advertising (IPA) suggest that it could become even more popular for brands online.

Following research conducted by the IPA Search Group, a collection comprising of members from 23 leading search and media agencies, the IPA has warned that Google could see companies pulling their brands away from the search engine due to the rising costs of the click process.

However, this increase in cost per click (CPC) has not been supported by a rise in click-through rates (CTR). In fact, the report found a decline in CTR on Google in the last 21 months.Newmediaage.com reported that during this period, 90 core brand terms from a variety of verticals were tracked and an increase CPC from 16p to 28p was revealed. This rise was accompanied by a decrease in the average CTR to the tune of 20.9 per cent, down from 28.9 per cent.

According to Newmediaage, Arjo Ghosh, the chairman for the IPA Search Group, said that search was a utility for brands which couldn't be ignored but also suggested that the increase was concerning.

He indicated that some brands may have to rethink their campaigns and consider taking business elsewhere if prices continue to rise, despite the stronghold Google has on the market. He said: "This year there's a danger that they'll start to take a second look at it [ad spend] compared to other opportunities.
"We could see a continued increase in bid cost to a point where some brands begin to look at other channels as they may present better value for money,"

A spokesman for Mountain View giants Google however rebuffed the report's claims, stating:

"As search marketing is a dynamic ad platform, there are any number of different variables that cause CPC to shift and CTR to change over time, including consumer behaviour, seasonality, the quality of natural search results and increased competition.

"A chart showing average CPC and CTR over time doesn't paint a complete picture."

Maybe it isn't the full picture but could it be a damming one for the currently undisputed kings of the internet? No matter how big a name - or how popular a brand - value for money is always going to be the bottom line for any ad spend so it's in Google's best interests to remember that remaining competitive is crucial even when you dominate the market.

In these recession tinged times finding the biggest return for your money is paramount, and rising CPC ads could actually result in an increase in brands plumping for search engine optimisation techniques as they hunt for the most efficient way to put their cash to work.

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