SEM Soars

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sem13.jpgADOTAS – SEM spending exceeded estimates in 2007 and, based on survey responses by marketers and agencies, the search marketing industry will continue its growth in the same manner according to findings of the 2007 State of the Market survey by the Search Engine Marketing Professional Organization (SEMPO), released today at the SES conference.

The survey cannot project the result of a shortage of search inventory (searches) caused by a major economic downturn. Search marketing spending is however, increasing at the detriment of print magazine advertising, website development and other marketing functions.

The survey by Radar Research was completed by 867 search engine advertisers and SEM agencies and administered via IntelliSurvey, Inc.

Key findings included:

  • The North American SEM industry grew from $9.4 billion in 2006 to $12.2 billion in 2007, exceeding earlier projections of $11.5 billion for 2007.
  • North American SEM spending is now projected to grow to $25.2 billion in 2011, up significantly from the $18.6 billion forecast a year ago.
  • Marketers are finding more search dollars by poaching budget from print magazine spending, website development, direct mail and other marketing programs.
  • Paid placement captures 87.4% of 2007 spending; organic SEO, 10.5%; paid inclusion, .07%, and technology investment, 1.4%.
  • Google AdWords remains the most popular search advertising program, but both Google and Yahoo sponsored search spending has decreased from a year ago.

Jeffrey Pruitt, SEMPO president and EVP corporate partnerships for iCrossing stated “The spending statistics show search engine marketing continues to prove its worth in the larger marketing arena. However, in light of the concerns about the overall economy, it’s important to note some of this spending is the result of shifting marketing dollars from other offline and online marketing endeavors.”

The estimates in North American SEM spending increased from $18.6 billion to $25.2 billion. Many factors have created these assumptions including increased costs of keywords and PPC campaigns, advertiser demand, and greater consumer participation in search and increased interest in targeting, such as behavioral and demographic targeting of searchers, amongst others.

Gordon Hotchkiss, SEMPO chairman and president of Enquiro Search Solutions, Inc. added of the findings “While CPC price inflation has slowed, marketers are finally beginning to recognize the value of search, and we expect search prices will hold and may even continue to move upward based on survey data.”

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