Recently we have had many conversations about the future of Internet marketing versus traditional advertising and I recently read an article that supports a few assumptions. Market research and statistical resource, eMarketer’s latest report titled Search Marketing Trends: Back to Basics claims that search marketing budgets, especially SEO budgets will increase in the next five years.

I guess what I take from this is that people are realizing that paying for paid search engine results leads to a higher ROI, as long as you are converting those clicks to leads, and utilizing SEO is an extremely important consideration that is actually projected to grow at a faster rate. You can also see there will be downward trends for contextual advertising and paid inclusion.

Contextual advertising is essentially a method of displaying ads that are related to the text your are viewing on a particular page. When contextual advertising came on the scene it offered a huge advantage because you could have your ad on a page that was mostly relevant to what the user was looking at. Over the years contextual advertising has certainly had it’s critics. There were and still are many opportunities for wasted clicks and impressions.

Ask yourself —Are your ads really being displayed on a page that relates to your most important keywords. Is your ad being associated with a story that you want to be associated with? Is the site so busy that the ads don’t even stand out. There are certainly pros and cons, but as you can see the projection is that this method is losing favor.

With the rise of Google and it’s separation from the crowd, paid inclusion is less of a concern for marketers. At last check Google demands over 72% of all U.S. searches conducted. Yahoo, Ask.com, and MSN received approximately 16 %, 4 % and 4 %, respectively. So that goes to show you where you should spend your SEM dollars. You do not need to pay to get listed on Google so paid inclusion is not an emphasis for most companies anymore. There is still value in being listed in online directories because Google still cares about where you are listed but it makes perfect sense that the trend is downward.

Based on these stats, marketing budgets are trending toward a focus on search engine advertising/optimization and Google is the obvious leader of the pack for SEM.

It is clear that companies (your competitors) are and will be spending their money on SEO and SEM. That means making sure your website is optimized for organic results (free results) and strategically positioned for paid placement on search engines should and must be a priority for all of us.