A survey by the Search Engine Marketing Professional Organization (SEMPO) found that nearly everyone running a paid search campaign tosses some cash in Google’s direction.
With $9.4 billion spent on North American search engine marketing in 2006, it is easy to see why Google has remained the dominant power in SEM. If it is a given that advertisers will spend money on AdWords, no one is going to displace them from their perch.
SEMPO said the roller coaster ride should continue upwards for SEM as a whole through 2011. Then, the market should hit a plateau of $18.6 billion in spending. Here’s how SEMPO sees the trend taking shape:
While the SEM industry faces challenges in improving search inventory, monetizing multi-word search phrases, increasing transparency and reducing complexity, it will still experience significant growth. Much of this growth is driven by strong advertiser demand, rising keyword pricing and cost per click, a second wave of small-to-midsized businesses discovering the efficacy of search and better search technology. Search media firms will also improve their niche offerings and increase local search inventory.
Even though Google owns the market, advertisers continue to play the field. Yahoo and Microsoft figured prominently in the plans of marketers in 2006:
Close to every search engine marketer (96%) is advertising with Google AdWords. More than 4 out of every 5 advertisers (86%) have run campaigns on Yahoo! Sponsored Search. In one year, MSN has made tremendous progress: in 2005 only 29 percent of respondents said they were using MSN; in 2006 that number rose to 68 percent.
Meanwhile, other advertising channels are losing out to SEM:
More than a third of advertisers (36%) report their funding for paid placement programs and organic SEO came from newly created budgets in 2006. Advertisers that are shifting their budgets towards search engine marketing are primarily shifting budget from offline marketing channels such as print magazine advertising (20%), direct mail (16%), TV advertising (13%), and print newspaper advertising (13%).
When the publisher of the New York Times comes out and says “I really don’t know whether we’ll be printing the Times in five years, and you know what? I don’t care either.”, it really makes those budgetary shifts stand out for people.
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