Advertisers Will Spend $4 Billion Dollars in 2004 on Search Engine Marketing According to the Search Engine Marketing Professional Organization (SEMPO)
Advertisers Expected to Spend on Average an Additional 39% in 2005 on Their Combined Search Engine Marketing Programs Compared to 2004
Chicago, IL, December 14, 2004 - The Search Engine Marketing Professional Organization (SEMPO), a non-profit professional association working to increase awareness and promote the value of Search Engine Marketing (SEM) worldwide, today published a research paper, "The State of Search Engine Marketing 2004," which concludes that in the U.S. and Canadian market, advertisers will spend $4.087 billion dollars this year on search marketing programs. That figure comprises payments to search engines and search-related media companies, search engine marketing agencies as well as in-house expenditures in support of such programs, including "paid placement," "paid inclusion," "organic search engine optimization" and "search engine marketing technology platforms" (terms which all are further defined in the report).
"The data indicate that current size of the market for Search Engine Marketing services is the tip of the iceberg; we have the beginnings of a healthy industry," said Kevin Lee, Board of Directors Member and Chair of the Research Committee of SEMPO. "The research also suggests that marketers are using a mix of internal and external solutions to deal with the high level of complexity of the search marketing space. SEMPO expects increasing competition among marketers to drive significant growth in Search Engine Marketing and related services over the next several years."
"Our mandate is to promote and help grow the search engine marketing industry for our members and sponsors," said Barbara Coll, Chairperson and President of SEMPO. "The logical first step is to measure how large the industry is today in order to set our objectives and directions to support future growth. We believe our 2004 advertising and marketing activities are having an effect already and these results will allow us to confirm these perceptions moving forward."
The research, conducted by Executive Summary Consulting, Inc., is based on an extensive survey of 288 search engine advertisers and marketing agencies, executed via IntelliSurvey, Inc., as well as in-depth interviews with 30 leading industry experts. The final report breaks down advertiser spending for 2004 in several areas: $3.058 billion to search media companies; $618 million on SEM-related in-house expenses within advertising corporations; $380 million to search engine marketing agencies, and $30 million in SEM technology licensing fees. The report also estimated that marketers will spend (including both in-house and external media, service and licensing expenses) $3.342 billion on paid placement campaigns; $492 million on organic search engine optimization; $182 million on paid inclusion, and $72 million on SEM-related technology services.
"Most SEM market size reports to date have focused on paid search advertising and overlook search engine optimization work by companies and agencies, also ignoring the human resource costs incurred by companies for paid search marketing operations. This survey indicates that companies see SEO as an important part of the search marketing spend, while also staffing their marketing departments to manage paid search. Both areas have an opportunity for strong growth," added Lee.
Notable findings in the study include the following:
A complete copy of the research is available to all SEMPO members and research participants. A summary copy is also publicly available on SEMPO's web site.
About Executive Summary Consulting
About the Search Engine Marketing Professional Organization (SEMPO)
Representing thousands in 40 countries, SEMPO has more than 800 members. It represents the common interests of companies and consultants worldwide and provides them with a voice in the marketplace. SEMPO's education and outreach initiatives are funded in part by Yahoo!, Google, SMX, Search Engine Strategies, DoubleClick, Baidu, and MediaPost.
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