The economy may be slowing, but spending on search engine marketing continues to rev up. The recently released
2007 SEMPO State of the Market Survey includes these remarkable findings.
- 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%
It seems as though nothing can stop the tidal wave transfer of advertising spend from traditional to online media. In fact, as I'm writing this post, a
breaking news story reports that CBS Channel 2 in Chicago has laid off 17 people, including news anchor Diann Burns and sports anchor Mark Malone. The story explains -
What happened at Channel 2 is endemic to nearly all broadcast and print outlets of late. With audiences and advertisers investing more time and money in digital platforms such as the Internet, old-style media have announced cutbacks to offset the slipping revenue.
It's important to note that nearly 90% of SEM spending goes to paid placement. For all the media focus on SEO and conversational marketing, paid advertising still works. In fact, it works better all the time because ads can be targeted with greater accuracy than in the old days of indiscriminately placed pop-ups. Geographic filtering allows PPC ads on search engines to reach more relevant searchers. Ad placement on blogs, RSS feeds, and social networking sites can be geared to the tastes of very specific subscribers. Many Internet-based business models hinge upon building a healthy revenue stream from advertisements on their Web sites.
The ability to focus advertising spend on the Web makes the (relatively) scattergun approach of traditional media advertising look less appealing than ever, now that business conditions are weak. With that in mind, 2008, despite a recession, may see more growth than ever in paid search engine marketing.
