Inside The Numbers: January Search Marketing Metrics

Thursday, February 7, 2008 By Clay | Comments (0)

eMarketer has released their January 2008 search marketing report highlighting user and spending trends. The report paints a very rosy picture for search in the next three / four years with spending doubling from $8 billion this year to a projected $16 billion in 2011. These types of growth numbers clearly indicate we’re still in the growth phase of the s-curve. Some questions I had when reading the report…

1) Where are we on the s-curve? Is the industry still growing at a high rate?
We’re still growing at a tremendous rate.

search marketing spending chart
Could the looming recession impact these numbers? You bet. But, it’s also likely MORE marketing dollars are poured into search. The savvy marketer will turn the screws on their campaigns and spend their marketing dollars on the most effective marketing channels that have a direct and measurable impact on their business’s bottom-line (i.e. search). eMarketer projects a slight decline in search’s share in marketer’s overall online marketing mix (see the chart below) but that could change. We could see an acceleration in the shifting of marketing dollars to better performing channels (i.e. search) which would lead to even greater growth for the industry (i.e. Google).

Search Marketing Chart - Percentage of Spend

2) Where is the growth coming from?
eMarketer projects steady growth in paid search, paid inclusion, contextual advertising, and SEO through 2012.

Search marketing growth by type

While I do believe paid search and contextual advertising will grow, I do not believe paid inclusion and SEO will (at least not at the rates projected by eMarketer). Three reasons:

SEO Expertise & The IT Department: SEO awareness is increasing and has finally caught the attention of the Technology department. Expertise in SEO is now becoming a requirement for developers and as that knowledge and expertise grows, there will be less of a need for SEO consultants. Websites will be built properly from the start. Further, as technology organizations within large companies become more integrated into the business and share responsibility for business metrics they’ll be forced to pay closer attention to SEO. Many large organizations still view technology teams as ’supporters’ rather than ‘drivers’ and that is starting to change. More on this evolution and how it effects search in the coming weeks.
Search Engine Transparency: As the search engines increase transparency to their processes and produce tools to facilitate SEO, the need for outsourced technology lessens.
The Future of Search: The evolution of the semantic web could dramatically change the presentation of search results and the source of content by 2012. Another post that’s on the back burner.

3) What is the latest search market share?
No surprises here. Note, the percentages exceed 100% because people visit more than one search engine.

Search market share

4) Is consumer usage growing and where?
Absolutely. This is really a no-brainer as two things are working in search’s favor. One, search is a fundamental tool for Internet usage. As Internet usage grows so does search. The pie increases organically every year. Two, as these new Internet users increase their time on the net they inevitably find a need for search engines.

Consumer search usage

5) Tell me something I didn’t already know!
The upstream data provided by Hitwise was certainly eye-opening. A tremendous percentage of Yahoo and MSN’s search traffic originate from their portals and mail services. If they ever tie the knot and try consolidating those services, mucking things up along the way, Google could be in for an even bigger piece of the pie.

Google upstream