Does economic uncertaintly push online ad spend into SEM?

March 19, 2008

According to SEMPO (the Search Engine Marketing Professional Organization) it does.

Apparently money is shifting into search and away from print and classified at an increasing rate. The reason for this I’d surmise is that search is being seen as a way to follow consumers rather than just trying to put an ad in front of them. It’s now widely accepted that most markets have a need to be active in search so it’s natural for spend to shift towards it.

Key findings from the SEMPO study are:

  • 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 percent of 2007 spending; organic SEO, 10.5 percent; paid inclusion, 0.07 percent, and technology investment, 1.4 percent.
  • Google AdWords remains the most popular search advertising program, but both Google and Yahoo sponsored search spending has decreased from a year ago

Here’s how the spend is shifting:

Shifting to search is great for all the SEO agencies out there but is also going to make their jobs a lot harder as they have to work for their money to get clients to the top of the listings. As competition grows, so it becomes more difficult to get dramatic improvements in position, some SEO agencies have had an easy ride in recent years and that’s going to get harder.

Other developments will also affect SEO such as the introduction of semantic search technology (as announced by Yahoo recently). Developments such as this could change the rankings entirely and again will mean the agencies have to stay ahead of the game and work hard (not a bad thing).

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One Response to “Does economic uncertaintly push online ad spend into SEM?”

  1. Making Money Online Says:

    Wow, that’s so interesting.. Cool!


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