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2008 SEMPO State of the Market Survey Projects SEM Spending Growth in 2009 and Continued Spending Growth to 2013

Advertisers Reaffirm SEM’s Rising Prominence in the Marketing Mix

New York, NY, March 23, 2009 – Despite the tough economic climate, search engine marketing (SEM) spending will continue to grow in 2009, according to the data findings of the 2008 State of the Market survey of advertisers and agencies by the Search Engine Marketing Professional Organization (SEMPO), www.sempo.org, announced today at the Search Engine Strategies conference. The survey also projects sustained SEM growth over the long term, to an estimated $26.1 billion total spend in 2013.

SEMPO researchers see growth being driven by advertiser demand, rising keyword pricing and cost per click efficiencies. Given the efficacy of search advertising, SEMPO believes the recession will not affect the SEM industry as significantly as other forms of advertising and may, in fact, bolster it slightly as advertisers demand greater efficiency from their marketing spend.

"What we are seeing is a growing recognition on the part of marketers that search engine marketing is an essential part of business success,” says Jeffrey Pruitt, SEMPO chairperson,  and executive vice president, corporate partnerships, iCrossing. 

"Marketers appreciate the quantifiable aspect of search engine marketing, and are employing the medium to both raise brand awareness and drive sales. They also know that searchers represent pre-qualified traffic, ultimately helping them be more efficient and effective in marketing,” says Sara Holoubek, SEMPO president and corporate strategy consultant.

SEMPO’s detailed online survey by Radar Research was completed by 890 search engine advertisers and SEM agencies and administered via IntelliSurvey, Inc. The executive summary is available to the public online at www.sempo.org.
Top data findings include:

  • 2008 SEM spending totalled $13.4 billion
  • 2009 SEM spending is projected to rise to $14.7 billion
  • Long term projections show a total SEM spend of $26.1 billion in 2013
  • Paid placement accounted for 88% of 2008 spending, or $11.9 billion
  • Organic SEO accounted for approximately 11% of 2008 spending, or more than $1.4 billion
  • Additionally, the market for SEM technologies, including leasing, agency solutions and in-house development, accounted for 1.1% of overall 2008 spending, or $141 million.

SEM NO LONGER THE BUDGET STEPCHILD

For the first time, survey responses show that most advertisers are now allocating new funds for SEM programs, and also looking more to offline marketing channels if they need to make budget shifts, rather than cannibalizing other online spend categories such as web development and affiliate marketing.

About a third of respondents (32%) report their funding for paid placement came from a mix of new and existing marketing budgets, while about another third (30%) reported they are using newly allocated budgets.

"While marketers continue to find some SEM dollars by reducing other marketing budget items, for the first time we are seeing a significant shift to SEM becoming its own line item on budgets,” says Kevin Lee, SEMPO board of directors member and Chairman & CEO / Co-Founder, Didit.  "The effectiveness of online marketing has been proven as we are seeing how online media can target consumer segments and behavior in a way no other marketing channel has ever been able to achieve.”

About Radar Research
Radar Research is a Los Angeles-based research and consulting firm aimed at the nexus of media, technology, culture and commerce. It was founded by two former Jupiter Research analysts, Marissa Gluck and Aram Sinnreich. Radar conducts research on behalf of both corporate clients and non-profit organizations, such as DoubleClick, Sony Pictures Entertainment, Nielsen//Netratings, the Online Publishers Association and The Norman Lear Center.

About the Search Engine Marketing Professional Organization (SEMPO) 
SEMPO is a global non-profit organization serving the search engine marketing industry and marketing professionals engaged in it. Its purpose is to provide a foundation for industry growth through building stronger relationships, fostering awareness, providing education, promoting the industry, generating research, and creating a better understanding of search and its role in marketing.

Representing thousands in over 30 countries, SEMPO has more than 850 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 Microsoft, Yahoo!, Google, Superpages.com, ABC Search, SMX and Search Engine Strategies.

 

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