Paid search spending in the US will more than double by 2009 to $5.5 billion but as this market matures, growth is expected to slow down, says a new report from a US research group.
According to Jupiter Research, advertisers are expected to spend $2.6 billion on search by the end of this year and this will continue to rise steadily but by 2009 the compound annual growth rate will slow to 11% from 60% in 2003 and 30% in 2004.
Jupiter analyst, Nate Elliott said: “Paid search will grow aggressively and continue to grow at a good rate. Growth of 63% last year and 11% in 2009 is a sign that the market is maturing. As it gets larger it can’t continue to grow at the same pace.”
The Jupiter report added that the increased advertising spend is coupled with a large increase to the average click price which will jump from $0.29 in 2003 to $0.47 in 2009.
Elliott said: “As companies continue to invest and search prices rise, they will have to get better at measuring. At $0.05 per click, I’m not as likely to be concerned but for $0.45 I want to have better measurements.”
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