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 SMB Market Two Factors Driving Growth
Wakefield, MA, February 8, 2007 - 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. We have moved from the first wave of adoption of search-based marketing to the myriad of small and medium sized businesses, many of them startups, using SEM as a fundamental part of their business. In fact, many of these SMB companies have been founded on an e-business model and that is a huge implication for our general economy, going forward," says Kevin Lee, member of the Board of Directors of SEMPO and chair of its Research Committee.
"SEM is bringing results and is helping to fuel the Internet-based economy which in turn is driving SEM spending," he adds.
One shift from previous years is that direct sales is now as compelling an objective for SEM spending as brand awareness. Respondents could give multiple responses to their spending motivation and in 2006, direct sales was the top choice, at 58 percent, followed by brand awareness as the next most prevalent objective, at 57 percent.
"It's a healthy trend that direct sales is becoming a primary reason for SEM spending. The SEM industry is under pressure to show ROI and linking spending to direct sales will prove that SEM can contribute effectively to a company's profit picture," says SEMPO Research Committee Co-chair, Gord Hotchkiss.
MSN Gaining on Competition
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.
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