With search engine marketing predicted to reached $16.6 billion by the end of this year, it’s easy to see why marketers are focusing on the best way to determine which keywords to purchase.  At the same time, consumers are getting  more savvy about using online search. For example, Experian Marketing Services reports that 23% of searches now contain at least 5 keywords. And marketers know that there is seasonality to search terms. During the 2009 holiday season, searches on words related to coupons and store locators soared. So how do marketers go about determining which keywords to purchase?

MarketingSherpa took a look at at the various research methods used and the results varied by the size of a firm’s marketing budget.

Companies with a Search Engine Marketing budget of over $25,000 reported the following tactics to be highly effective:

  • Analyzing site log files  for highly converting keywords 85%
  • Analyzing site log files for frequent keywords 54%
  • Internal site search analysis 46%
  • Competitors’ sites 38%
  • Competitive tools (i.e. SpyFu) 31%

Companies with a SEM budget of less than $10,000 reported the following tactics to be highly effective:

  • Analyzing site log files  for highly converting keywords 54%
  • Analyzing site log files for frequent keywords 54%
  • Internal site search analysis 30%
  • Competitors’ sites 26%
  • Keyword suggestion tools (i.e. Word Tracker) 26%

MarketingSherpa analysts believe that companies with larger PPC budgets rank most tactics higher than companies with smaller budgets because “expertise may play a role in how successfully search marketers employ the tools at their disposal.” One might also argue that firms with smaller SEM budgets may not sufficiently budget for the effort it takes to fully research keyword strategy.

Writing for MarketingSherpa, Jen Doyle rightly proclaims that “it’s imperative that marketers know and use the same language used by their consumer target, and emphasize words that lead to the highest conversion levels.”

[Source: The 2010 digital marketer. Experian Marketing Services. 2010. Web. 6 May 2010; Doyle. Jen. Keyword Research Tactics Ranked by Efficiency. 6 Apr. 2010. Web. 5 May 2010]