Home  › Marketing › Strategies

Search Spend to Double by 2009

  |  August 9, 2004   |  Comments

The revenue numbers keep getting bigger, but the growth rate will slow as the market matures.

Spending on paid search will more than double by 2009, but growth will slow as the market matures, a Jupiter Research (a Jupitermedia Corp. division) report revealed today. The firm expects advertisers to spend $2.6 billion on search by the end of 2004, and rise steadily through 2009 when it reaches $5.5 billion.

Despite the rise in spending, the compound annual growth rate (CAGR) will slow to 11 percent in 2009, a big drop from the 60+ percent in 2003 and 30+ percent in 2004.

"Paid search has grown aggressively over the past several years and will continue to grow at a good rate. Growth of 63 percent last year and 11 percent in 2009 is a sign that the market is maturing. As it gets larger it can't continue to grow at the same pace," said Nate Elliott, associate analyst at Jupiter Research.

The lift in ad spend is accompanied by a large increase to the average click price. Rising 62 percent, Jupiter found the average click price will jump from $0.29 in 2003 to $0.47 in 2009.

The rising click prices coupled with Nielsen//NetRatings prediction that search activity would deplete ad inventory, could be seen as key variables in the huge rise in search spending. However, Elliott says, "Lack of inventory and rising prices are contributing factors but they are part of a normal maturation process."

The search spending growth will naturally benefit search engines and agencies, but organizations that can quickly adapt to the pricing increases will likely reap rewards as well. "As companies continue to invest and search prices rise, they will have to get better at measurement. At $0.05 per click, I'm not as likely to be concerned with my return on investment, but for $0.45 cents I want to make sure I'm getting my money's worth," said Elliott.

ClickZ Live San Francisco This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!

ABOUT THE AUTHOR

COMMENTSCommenting policy

comments powered by Disqus

Get the ClickZ Marketing newsletter delivered to you. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

BigDoor: The Marketers Guide to Customer Loyalty

The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.

WEBINARS

    Information currently unavailable

Jobs

    • Interactive Product Manager
      Interactive Product Manager (Western Governors University) - Salt Lake CityWestern Governors University, one of the 20 largest universities...
    • SEO Senior Analyst
      SEO Senior Analyst (University of Phoenix (Apollo Education Group)) - San FranciscoSEO Senior Analyst   Position Summary...
    • SEM & Biddable Media Manager
      SEM & Biddable Media Manager (Kepler Group LLC) - New YorkAs an Optimization & Innovation Manager at Kepler Group, you will be on the bleeding...