The majority of search marketers are pleased with the return on investment (ROI) they are seeing from search, and plan to invest more in the coming year, according to a new report from JupiterResearch.

In the survey, titled “US SEM Executive Survey, 2007: Understanding the Increasingly Sophisticated Search Marketer,” 65% of advertisers said they expect to increase investment in search, while a mere 7% were likely to cut spending. The rest expected search spending to remain constant.

Other findings:

  • 26% of large advertisers in companies with revenues of $50m + plan to increase spending on search marketing by over 25% this year.
  • 28% of these advertisers plan spending increases of between 11 and 25%, while 21% said investment in search will remain the same.
  • Of these ‘larger advertisers’, 27% were ‘very satisfied’ with ROI, 40% were ‘satisfied’, 25% were neither, while just 9% were unhappy with their returns.

The survey also found that, though smaller advertisers, defined as companies with less then $1m in annual revenue, were less satisfied overall with search marketing ROI. 13% were ‘very satisfied’ with ROI, 37% were satisfied, 28% were neither, while 22% were either ‘dissatisfied’ or ‘very dissatisfied’.

Among the concerns raised by search advertisers was rising keyword prices – all levels of advertisers reported this as their biggest problem.

The next biggest concern was the ability to measure the offline impact of search marketing, while tracking ROI was another problem for many.

JupiterResearch analyst Kevin Heisler believes that the latter problems are due to advertisers not correctly implementing analytics:

“Direct response marketers by far have been better at measuring ROI. Branding measurement is more complex, and many marketers are not using the right metrics or analytics goals,” he said. “Overall, many marketers are not using analytics to their fullest extent, although they’ve really closed the gap in the past year.”

These results, along with another recent survey by Internet Retailer, show that advertisers and retailers have faith in search engine marketing’s ability to deliver results.