2006 - Search Engine Marketing Is a Rocket: Spending Is Up
62%; Advertisers Spent a
Total of $9.4 Billion in
2006, according to SEMPO Survey of SEM Industry
Direct sales ROI and expanding small business market
are two main factors driving SEM growth.
North American advertisers spent $9.4 billion on
Search Engine Marketing (SEM) in 2006, a 62 percent
increase over 2005 spending,according to an
annual industry survey conducted by the Search
Engine Marketing Professional Organization (SEMPO)
www.sempo.org.
SEMPO researchers also estimate SEM spending to
double by 2011, at an aggregate spending total of
$18.6 billion.
The
report, "The State of Search Engine Marketing 2006,"
collected data on spending trends by agencies and
in-house advertisers. The SEM programs surveyed
include paid placement, paid inclusion, organic
search engine optimization (SEO) and SEM technology
platforms. The report is based on an industrywide
survey of 587 respondents - both agency and in-house
advertisers - conducted in November and December
2006 by Radar Research, LLC and Intellisurvey.
"These spending figures show that 2006 was a
watershed year for the SEM industry".
Read full report
SEMPO's survey found
organic SEO (tactics for improving a website's
non-advertising rank in search engines) is still the
most popular form of SEM, with almost three-quarters
of advertisers using this method, with paid
placement a very close second at 71 percent.
However, in dollars, paid placement accounted for 86
percent of total spending, or $8 billion.
Organic SEO accounted for
$1.1 billion in spending, or 12 percent. Paid inclusion continues its decline, accounting for
one percent of total spending, or $94 million. SEM
technology platforms account for the remainder, at
1.3 percent, or $122 million in spending.
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The SEMPO survey
also found that MSN is gaining on Google and Yahoo!,
now ranking third in paid placement SEM. In one
year, MSN has made tremendous progress: in 2005 only
29 percent of respondents said they were using MSN;
in 2006 that number rose to 68 percent.
Google AdWords
continues its reign as most popular search
advertising program, used by 96 percent of
respondents. Yahoo registered 86 percent of
respondents saying they used the program.
In
other trends:
75% of advertisers said they could afford a mild
increase in paid placement; the remaining 25% say
they have topped out in cost per lead spending
SEM continues to poach budget from other marketing
channels, especially offline marketing programs
In-house marketing programs continue to grow,
portending further consolidation on the agency
side of the business
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IAB Canada reported
that online ad spending in Canada hit CAD$1.01
billion in 2006, up 80% over 2005, with a projection
of 32% growth in 2007, to reach $1.33 billion in
sales. Broken down by category, online classifieds
and directories had the biggest growth in '06,
rising 120%, while email advertising was up 82%,
paid search rose 79% and display ads were up 58%.
Anna
Tulchinsky 
