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Search Marketing Shows Strength in 2006SEMPO, the Search Engine Marketing Professionals Organization, has released the results from its annual "State of Search Engine Marketing 2006" report. |
North American advertisers spent $9.4 billion on search engine marketing (SEM) in 2006, up 63 percent over the $5.75 billion spent on search in 2005, and beating last year's estimate of $7.2 billion. Spending is projected to grow to $18.6 billion by 2011 in North America, 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. That's a significant increase from last year's projection of $11.1 billion in 2010.
Out of the total 2006 spend, $8 billion, or 86 percent of that going to paid search, and $1.1 billion, or 12 percent of overall spending to search engine optimization (SEO). Spending on SEM technologies, including leasing, agency solutions and in-house development, accounts for 1.3 percent of overall spending, or $122 million; and paid inclusion accounted for 1.0 percent of spending, or $94 million.
The spending does not correlate with adoption in each case, since most companies tend to spend decidedly less on their SEO efforts, but are committed to engaging in SEO at some level. More than 76 percent of respondents take part in organic SEO activities, and 71 percent do paid search. Participation in paid inclusion is waning, with less than 20 percent of respondents taking part, compared to 40 percent in 2005.
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Added: Tue Feb 13 2007