Merrill Lynch has revised its online advertising forecast up for 2006, raising its prediction from 27.5% to 28.7% following a strong performance by the search marketing industry.
The analyst states that search giant Google has beaten its net revenue estimates by $75 million in Q1, recording year on year growth of 93%.
Merrill Lynch goes on to state that Google, as the leader in search, is “not only taking share in the U.S. from competitors, but is also benefiting from incremental gains in the search category.”
There are also likely to be increases in search efficiency, with comScore trends showing the analyst that, while Internet may not be spending much more time online than a year ago, data shows a growing number of searchers, number of searches, and number of searches per searcher. Merrill Lynch claims this is due to search engines making users time online more efficient, so that more searches can be crammed into each online ‘session.’
Given these factors, Merrill Lynch’s search growth forecast for 2006 has risen from 31.6% to 32.7%, although the analyst remains “comfortable” with its growth predictions for other online formats.
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