In a report released today, the Search Engine Marketing Professional Organization (SEMPO) found that in 2005, advertisers in the U.S. and Canada spent $5.75 billion on Search Engine Marketing—a 44% increase over the year before. The study—which covers various aspects of search spending, including payments to search engines and search-related media companies, search engine marketing agencies and in-house expenditures in support of such programs (paid placement, paid inclusion, organic search engine optimization and search engine marketing technology platforms), also projects that by 2010 SEM spending in North America will reach $11 billion.
Titled “The State of Search Engine Marketing 2005,” SEMPO’s report is based on an industry-wide survey of 553 respondents conducted by Radar Research and Intellisurvey. “This report confirms our belief that Search Engine Marketing has almost single-handedly revived a flagging online advertising marketplace after the stock market crashed in 2000,” said Kevin Lee, Chairperson of SEMPO, in the release. “As consumers have become increasingly reliant on search engines to navigate the Web, investors have shown a renewed interest in the digital technologies — and in search marketing in particular.”
The study found that four out of five advertisers utilize organic SEO, which accounted for approximately 11 percent of overall spending. It also revealed that paid inclusion accounted for just 4 percent of overall spending, with SEM technologies accounting for less than 2 percent of overall spending. The majority of SEM spending, however, was spent on paid placement, accounting for $4.7 billion (83%).
“The data shows that 2005 was a good year for search, but 2006 should be a great year,” SEMPO Research Committee Co-chair, Gord Hotchkiss said in the same release. “The growth shown has largely been driven by maturation in existing segments. Future growth will be fueled by an increased search presence from major advertisers and new monetization strategies from the major engines. The increased competitiveness in the marketplace will really drive the industry forward in the coming year.”