Search marketing spend continues to grow – SEMPO

SEMPO’s latest state of the market reports shows that spend on search engine marketing is still growing. As marketeers start to tighten their belts, which advertising medium will be hardest hit?

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Despite the gloomy economic situation in the US, spending on search engine marketing continues to grow beyond expectations, reaching $12.2bn in 2007.

This exceeded earlier predictions of $11.5 billion, and represents large rise on 2006’s figure of $9.4bn.

These are preliminary results from the Search Engine Marketing Professional Organization (SEMPO) 2007 State of the Market Survey, in which most marketers say that they will continue to increase the amount they spend on search marketing.

The search market seems to be growing as a result of marketers shifting spending from offline advertising, particularly magazines, newspapers and direct mail.

According to Kevin Lee from SEMPO’s research committee:

“I’m surprised we’re not seeing as big a shift from TV. Search is getting more budget from offline media that are usually used to narrow-cast, instead of TV and radio, which are broadcast media.” 

“As search becomes more recognized as something that brand advertisers can use, I’d expect to see more TV and radio dollars shift as well.”

Other figures from the preliminary report include:

  • North American spending on search engine marketing is now projected to grow to $25.2bn in 2011, up from SEMPO’s $18.6bn forecast of a year ago.
  • Paid search accounted for 87.4% of 2007 spending; organic SEO, 10.5%; paid inclusion, .07%, and technology investment, 1.4%.
  • Google AdWords is still the most popular search advertising program, but both Google and Yahoo sponsored search spending has decreased from a year ago.

We would agree with Kevin Lee – as budgets will innevitably face some ‘trimming’ over the coming months, it will be the big broadcast advertising spend that will be under greatest threat. The accountability / ROI that is possible from search engine marketing must surely be a more attractive option if you are under pressure to demonstrate the effectiveness of marketing spend?

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