Paid Search to Generate $10 Billion by 2009

While paid search advertising spending will slow from its meteoric rise during the last few years, it will still hit $10 billion by 2009, according to a new study from New York City-based Internet research firm eMarketer.

According to eMarketer, paid search ad spending in the US in 2006 will grow by 26.2%, seven percentage points less than last year's 33.2% gain. The channel, which had seen triple-digit increases earlier in the decade, will maintain more modest growth through 2009.

"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," said David Hallerman, a senior analyst at eMarketer and the study's author. "Such maturity will include more vertical search for better targeting, and a sharp rise in local search."

The study also found:
-- 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.

Nielsen Says U.S. Search Grew 39% in 2005

U.S. search volume in January 2006 was 39% greater than traffic at the same time last year, according to Nielsen//NetRatings. Online searches across 60 search engines in the U.S. rose from 4 billion at the beginning of 2005 to nearly, 5.7 billion by the end of January 2006, the Web measurement firm reported.

Those 5.7 billion searches conducted online mark the highest monthly traffic rate so far, Nielsen reported.

"Web users are conducting more searches not because they can't find what they're looking for but because search as a utility has become deeply ingrained into people's everyday lives," said Ken Cassar, chief analyst for Nielsen//NetRatings.

As to where those searches are taking place, Nielsen found that the top three engines' January market share remained relatively stable year over year. Google had 48.2% of search share for the month, a 1.1% increase over its portion of the traffic in the same month 2005. Yahoo! Search captured about 21.2% of search volume for the month, up less than 1% from 2005. And MSN Search market share declined 1.8% year-over-year to 12.8% of searches in January 2006.

Eaerlier last week, comScore Media Metrix put the growth in U.S. January searches from 2005 to 2006 at a lower rate of 11%. But that lower increase was due to a higher search count for January 2005 than Nielsen's. ComScore tabulated the total January search volume as 5.5 billion-- very close to Nielsen//NetRatings' 5.7 billion figure.

Survey Says 90% of Advertisers Will Use Online Media by 2008

More than 90% of advertisers expect to use online media by 2008, according to survey findings released Monday by the Burlingame, CA-based marketing research firm Outsell Inc.

Eighty percent of advertisers presently use online media. Companies with ad budgets less than $1 million advertising are shifting more of their advertising budgets to online media than larger businesses in general.

Advertisers surveyed consider Google more effective than Yahoo and MSN for keyword ads, and more effective than Yahoo for contextual ads.

Overall spending on online marketing is expected to grow 19% this year. Search engine marketing advertising spending is projected to grow 26%.

SEO Tips In A Sea Of Change

Waves of change have cascaded over the search marketing sector in the past year prompting changes in the methods, business and practice of search engine optimization.

Though many things have been altered, expanded or otherwise modified, the general search engine market share has not. Google remains the most popular search engine and continues to drive more traffic than the other search engines combined. Another thing that has not changed is the greater volume of site traffic generated by organic search placement over any other form on online advertising.

READ MORE: SEO Blog

2005 Online Ad Revenue More Than 412.5 billion: IAB

Internet advertising revenue for 2005 exceeded $12.5 billion, a 30% increase over the previous revenue record of $9.6 billion in 2004, said the Interactive Advertising Bureau.

Fourth-quarter 2005 ad revenue totaled a record $3.6 billion, making it the second consecutive quarter to surpass the $3 billion mark and the highest quarter reported, the two organizations said. Fourth quarter revenues represent a 35% increase over the same period in 2004 and a 17% increase over Q3 of 2005, said the IAB.

The 2005 fourth quarter and full year online ad revenue figures were estimated by surveying and aggregating data from the top 15 online ad sellers. The results were then extrapolated to calculate the total estimated industry revenue figure. Actual third and fourth quarter results will be reported in the full 2005 Internet Advertising Revenue Report, expected in April 2006.

READ MORE: IAB Web site