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Perplexing Search Marketing “Growth” Numbers
By Mike Murray | April 21, 2008
At least in North America, fresh data from the Search Engine Marketing Professional Organization (SEMPO) suggests the industry is growing - $9.4 billion in 2006 to $12.1 billion in 2007 - a 29.8% increase.
It’s a surprising increase given past growth and the amount of search marketing interest and budgets we’re seeing from companies.
SEMPO is starting to release details from its latest survey, “The State of Search Engine Marketing 2007.”
In terms of the study, is it really notable growth when search media giants like Google and Yahoo! gobble up $2.4 billion of the $2.8 billion increase between 2006 and 2007?
Consultants and in-house staffs took in much of the remaining $356 million for their work in natural search engine optimization and paid search management.
The $356 million doesn’t even compare to what happened between 2005 and 2006 when the industry grew 72% — from $5.7 billion to $9.4 billion.
Sure, search engines got the bulk of the extra cash in 2006, but marketers did pretty well too.
For example, companies dedicated $817 million more in 2006 over 2005 for consultants and internal specialists focusing on SEO and paid search.
More specifically, spending on SEO soared from $642 million in 2005 to $1.1 billion in 2006. Similarly, paid search management (apart from the actual cost of the ads themselves) grew from $513 million in 2005 to $866 million in 2006.
Marketing dollars may have hit an all-time high in 2007 for consultants and in-house ($1 billion for paid search and $1.2 billion for SEO), but the increases from year to year have slowed.
Despite concerns about the economy, the slowdown suggested by SEMPO’s survey seems a bit unusual.
We’re seeing companies expand budgets (adding money for SEO, paid search or online video) to capitalize on search marketing given what little they need to spend to connect with B2B and B2C customers at the very moment in time they’re searching.
If they’ve been neglecting SEO, business executives are saying SEO is an opportunity they can’t ignore. Many companies also are looking for guidance on the paid search front - either to set up a program for the first time or to improve what they’ve been trying to manage on their own. They’re also interested in a holistic approach that ties everything together, including email marketing and online videos.
It’s easy to slice and dice the numbers. The bottom line is that millions of people conduct searches every day. Smart marketers will spend what they need to if they want their companies to be discovered.
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April 23rd, 2008 at 12:27 pm
Nice analysis, Mike. Maybe the decreased rate of SEM spending points to a general trend that Fathom SEO is lucky to be an exception to. Perhaps the expanding budgets and clientele interest Fathom is seeing is a sign that we’re targeting the right groups, unrepresentative of the general population in terms of how much budget they allocate to SEM. Maybe now that most people are aware of SEM, there is less of an increase in year-to-year spending as there was a couple years ago when SEM/SEO was more underground.
April 28th, 2008 at 12:16 pm
Wow! That’s great news!