Tuesday, March 07, 2006

Paid Search Ad Spend Will Hit $10 Billion By 2009

eMarketer: forecasts that paid search advertising spending, slowing from its meteoric rise the last few years, will still hit $10 billion by 2009.

US paid search ad spending in the US in 2006 will grow by 26.2%, a full seven percentage points less than last year's 33.2% gain. After triple-figure growth rates earlier in the decade, more modest growth rates will prevail through the rest of the decade.

Clearly our growth rates are slowing, noting that the company's revenue growth is decelerating because of the law of large numbers. In other words, hyper-growth can't be sustained forever. And as Google goes, so goes the search marketing industry.

Finds the slowing growth rate expected. As this market matures, the search engines will need to refine and improve their products, which will create greater opportunities for search marketers to unearth more effective niches. Such maturity will include more vertical search for better targeting, and a sharp rise in local search, as both users and advertisers increasingly realize that the Internet is the best place to make contact with any kind or size of business. · Paid search ad spending in the US will top the $10 billion mark in only three years, in 2009. · Paid search ad spending growth will slow to 26.2% this year and 16.4% next year...but it will still continue at a rate that most other media would be delighted to have. · Paid search will continue to be the dominant form of online advertising, at around a 40% share of the overall market. · By 2010, local search ad spending will make up nearly 20% of all paid search spending. · In fact, the growth of local search will outstrip national search in every year from 2005 through 2010.

US Paid Search Marketing Publ 20060307