Search engine marketing spending will hit $11.6 billion by 2010, Forrester
Search engine marketing will grow by 33% this year, with growth slowing to 10% annually by 2010, when spending will hit $11.6 billion, according to a new report from Forrester Research.
Forrester’s search marketing category includes paid search, contextual listings, paid inclusion, and fees paid to search engine marketing agencies for search engine optimization and contextual listings.
Search marketing will represent 39% of all online advertising spending this year and will account for 44% of online ad spending in 2010, Forrester estimates. However, increasing prices for keywords eventually will lead some marketers to abandon search engines altogether, Forrester says.
Nevertheless, revenues for search engine will continue to grow as innovative products are introduced that will allow marketers to target ads based on demographics, behavior and previous searches, according to Forrester.
Of funds budgeted for search engine marketing this year, marketers said they would spend 51% on paid search ads, 6% on paid inclusion, 10% on contextual ads, 12% on search marketing agency fees for paid search, 11% on search marketing agency fees for optimization, and 11% on other areas of search marketing.
Two-thirds of the marketers said they will spend as much as the can on search marketing as long as the ROI is positive. Many marketers also said they are pulling search budgets primarily from banner ad buys, especially if the banners are being used for direct response rather than branding objectives.
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