Search engine marketing spending is growing at a rapid pace and the industry as a whole. According to Search Engine Marketing Professional Organization (SEMPO), the Search Engine Marketing (SEM) spending grew at 30% in 2007.The increased growth in search marketing is due to marketers shifting the portion of their spending from other traditional sources to search engine marketing.



•SEM spending higher than the expected

Search engine marketing spendings are higher than the expected. North American search engine marketing industry grew to $12.2 billion in 2007, a 30% increase over 2006’s spending of $9.4 billion. The spending exceeded earlier projections of $11.5 billion for 2007. The spending statistics show that the search engine marketing continues to prove its worth in the larger marketing arena.

•Increase in growth of SEM at the expense of other sources

The increase in growth of the search engine marketing is due to marketers shifting the portion of their spending from the traditional sources to the search marketing. According to SEMPO, marketers are gradually re-allocating budgets from the traditional sources to search marketing. This change is due to consumers relying mostly on search engines to conduct pre-purchase research about products.

•Advertisers ready to bare hike in paid placement prices

As the search engine marketing industry is performing well, the advertisers are ready to bare rise in paid placement prices. According to SEMPO, 75% advertisers are ready to bare hike in paid placement prices. This is because, paid placement is more popular among them as they captured 87.4% of 2007 spending. When compared to that, organic SEO had 10.5%, paid inclusion had 0.07% and technology investment had 1.4%.

•Percentage splits in SEM spending show little change in each category

The percentage splits in SEM spending showed little change in each category. In paid placement, search media firms share 90% of the spending compared with 3% for SEM agencies and 7% for in-house organizations. In paid inclusion, the situation is similar, with search media firms accounting for 90% of the spending and remaining 10% for SEM agencies. In organic SEO, it’s quite opposite, with in-house organizations sharing 80% of the spending, compared with 20% for SEM agencies. The search media firms which were accounting for major spending in paid placement and paid inclusion have no share in organic SEO.

•Spending on SEM estimated to be higher

The spending on the search engine marketing is estimated to be higher. According to SEMPO, the reasons behind the higher estimates are rise in costs of keywords and pay-per-click campaigns, greater consumer participation in the search, increased interest in behavioral and demographic targeting of searchers and some other reasons.

Search engine marketing spending is increasing as marketers shifting the portion of their spending from traditional sources to search marketing. This is because of consumers relying more on search engines to conduct pre-purchase research.