Pay-per-click (PPC) search in Australia is estimated to grow by 85% this year, with new research from Frost & Sullivan predicting the market to total 130 million Australian dollars this year, up from A$70 million in 2004.
The market intelligence firm projects the PPC business to increase to A$350 by 2009 and states that paid search was 18% of the total Australian online advertising market in 2004. This is set to grow to 27% by 2009. This makes it the fastest growing online advertising segment.
At the end of 2004, there were approximately 9,000 PPC advertisers in Australia, with Frost & Sullivan expecting the number to reach 13,500 this year. The market is still relatively under-developed in Australia, however, with two thirds of advertisers only starting to use paid search in the last two years.
The rapid growth of paid search advertising in Australia is in line with global trends, with analyst eMarketer estimating the sector in the US to reach $5.4 billion in 2005, from $3.85 billion last year, an increase of more than 40% (see Online Adspend To Hit $13 Billion In 2005).
Analyst Merrill Lynch predicts paid for search listings in the US to grow by 47% this year, with sponsored search adspend in the States forecast to increase by $1.6 billion, up to around $5.1 billion this year, from $3.5 billion in 2004.(see Merrill Predicts Strong Growth In US Online Adspend).
Overall, Merrill Lynch forecasts that online advertising in the US will reach $12.4 billion this year, increasing by $12.6 billion to hit a massive $25 billion by 2009.
These predictions are estimated to result in search marketing accounting for 45% of all online adspend in 2005.
Commenting on the report, Lauren Rich-Fine, first vice president at Merrill Lynch and author of the report said: “Search volume growth really has been the biggest driver of growth in paid search advertising in late 2004 and into early 2005.”
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