For the past five years, I’ve sat down with my team at Anvil Media each December, to discuss the emerging search engine marketing opportunities and challenges.  A quick review of our 2009 SEM Predictions indicates we batted about 650, which isn’t bad, considering we try to avoid safe or obvious predictions.

In preparation for Online Marketing Summit in February, where I will be hosting a pre-conference SEM training and participating in an SEM expert panel, I’ve outlined what I feel are the biggest challenges companies will face in 2010, in terms of SEM programs execution.

Bigger Expectations, Fewer Resources

As marketing budgets and teams get trimmed, executives are putting increasing pressure on SEM to deliver. While SEM has been able to meet or exceed expectations of even the most skeptical managers the past few years, marketers are being asked to improve ROI, despite limited budgets and resources. 2010 may be the year the Grim Reaper comes reckoning, when SEM budgets get cut too close to the bone and is unable to meet aggressive marketing goals.

Validating SEM Efforts

As the old saying goes, what gets measured gets managed. This statement is particularly true for SEM, which means increasing accountability and scrutiny.  In response, internal SEM teams and vendors are providing metrics favorable to their job security.  Corporate marketers are now facing increasing pressure from executive management to validate SEM program efficacy. A cottage industry consisting of SEM audit software and services will emerge in the coming year, providing insights into the true performance of in-house and SEM vendors.

Bringing It Home

2009 was the year of “taking SEM in-house.” Unfortunately for SEM vendors, what we’ve seen thus far is likely the tip of the iceberg. SEM consultants and vendors will continue to face significant challenges in client retention, particularly with larger corporations that are most likely to build SEM teams in-house. While a general migration is unavoidable, there will always be a place for high-value SEM consultants.

True Integration

Although we predicted better integration between search and traditional marketing in 2009, we’re barely beyond the starting line. On the plus side, traditional marketers are finally acknowledging the power of SEM, even integrating it into various advertising campaigns. Unfortunately, the depth and breadth of integration is lackluster at best. Once SEM has a dedicated voice at the table and is integrated into all marketing activities, the ROI on marketing will become truly compelling.

The ‘A’ Word

Although analytics tools and techniques continue to evolve and improve across the board, challenges remain. A significant measurement challenge facing online marketers, is understanding attribution. The ability to track all marketing touch-points in the sales process, in order to understand which activities influence conversions and why, is the secret sauce. SEM professionals that master attribution have ultimate job security.

Search Meets Social

Perhaps the largest sea change in corporate marketing over the past year, was the embrace of social media.  Unfortunately, the social media gold rush has created confusion, poorly implemented and measured campaigns. SEM professionals find themselves at ground zero with opportunities to incorporate social media into their area of responsibility, but what does it mean and how will it work? Look for more definition, improved process, integration and accountability in 2010.

Keeping Up

Although SEM professionals continue to add responsibilities like social media to their plates, the associated increase in budgets and resources is not necessarily materializing. With limited bandwidth, keeping up with a dynamic, evolving and growing industry becomes increasingly challenging.  Marketers must get increasingly creative about how they identify, analyze and distribute valuable information to team members. Smaller in-house SEM teams will suffer the most in this scenario.

Managing Reputation

Although the growth of the online reputation management industry didn’t materialize in 2009 as we’d anticipated, it is still an unavoidable aspect of any SEM program. With the launch of Google’s social search, high visibility of customer reviews and related social media sites in search results, brands large and small can’t afford to ignore what people are saying. A company lacking a proactive reputation management program will not fare well in 2010 and beyond.

Going Global

Although International SEM has been a reality for many years, 2009 was a banner year in terms of adoption. With advances in translation technology and search products, even smaller regional companies have opportunities to go global very cost-effectively. Look for even greater levels of adoption of international SEO & PPC programs, particularly beyond Google to country-specific search engines. The challenge will be allocating proper resources to localize SEM programs for optimal ROI.

I’ve outlined nine of the biggest challenges SEM professionals will face in 2010, but it is by no means an exhaustive list and I encourage you to share your thoughts below. I look forward to seeing you at OMS 2010 in San Diego.