There are 200 million searches that occur online each day, but only 2.7 million pieces of direct mail in the mail stream each day, said Patricia Neuray, vice president of sales at Overture.

"At the end of the day, it comes down to getting a click for you and we do that better than any other direct marketing vehicle," Neuray said.

The panel of search engine executives to a standing-room only crowd on the exhibit floor at the Adtech conference at the New York Hilton on Monday, was kicked off by moderator Masha Geller, who asked: "What are the common misconceptions out there?"

People think if their company is already showing up in an engine, then they don’t have to pay for performance, said Jay Bean, founder/COO, ah-ha.com. "If you pay, you can guarantee your placement and title."

Marketers new to the medium don’t understand that they have to track response. "You have to track down to the keyword level," said Bean.

Marketers also purchase too few keywords. "We have Fortune 500 companies who buy only five or 10 keywords and they should be buying 5,000 or 10,000," said Tim Armstrong, vice president of advertising sales at Google.

Another misconception: people think their company has to come up first in the search listing. "But we find second, third and fourth position sometimes performs better," said James Beriker, CEO of Search123. "Don’t let your ego rule that you have to fall first," he said.

Search titles and descriptions [the language used behind the scenes on a Web site to attract a high placement] need to be as specific as possible," cautioned Neuray. "Making them general gets you a lot of clicks, but not a lot of conversions on the back end."

"Is every brand right for paid search?" Geller asked.

"We have 75,000 advertisers of all sorts," Neuray said, as others chimed in that all sectors do well with SEM.

When pressed, Armstrong of Google admitted that packaged goods companies looking to SEM for branding "are probably going down the wrong path."

"If it’s a general branding campaign for ‘Tide gets your clothes whiter,’ it doesn’t work," he said. "If it’s a campaign for an individual Tide product, it works."

Predictions for next year? Growth, growth and more growth.

"Now there are 100,000 advertisers using SEM," Armstrong of Google, said. "It will go up to 250,000." Plus, more customers will renew and there will be more competition, he added.

"The space will have a 30% growth beyond the $1.4 billion a year business it is now," said Dan Ballister, vice president of sales at FindWhat.