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Search Marketing Spending and Trends

Search dominated by paid placement, more SEO to come.

New data provided by the Search Engine Marketing Professional Organization (SEMPO), based on research conducted by Radar Research, sheds light on how search marketing dollars are being spent.

In 2008, $13.5 billion was spent on search marketing. The space was mostly made up of paid placement and search engine optimization (SEO), with a sliver going to technology providers whose software assisted in the execution of search campaigns. Paid search ads saw 88% of the total pie, SEO only 11%.

The ratio of paid placement to SEO will change in the future.

“Internet users prefer organic listings to paid search. They generally find them more relevant—or simply more acceptable—than advertising,” said eMarketer senior analyst David Hallerman. “Therefore, they tend to click on organic results more often than on paid search ads.”

SEO is also cost-effective and works across all search engines. In addition, an optimized site doesn’t drop off the first results page even when a marketer’s spending slows or stops, as paid search does.
“Marketers are realizing that even if optimization’s effects are not as obvious as paid search advertising,” added Mr. Hallerman, “SEO delivers longer-term results that support any search marketing campaign.”

Search marketing spending will thrive in the coming years. SEMPO estimates that $14.7 billion will be spent in 2009.

Other sources are not quite as bullish, but they only cover the US, so it not surprising that the figures are lower. Myers Publishing, Credit Suisse, Oppenheimer and Co. and Barclays Capital all had lower 2009 projections, $13.0 billion, $11.6 billion, $11.6 billion and $11.2 billion, respectively.

eMarketer currently estimates that search ad spending in the US will reach $12.3 billion in 2009. But revisted figures are due out soon. Watch for them.

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