US Search Engine Marketing Growth To Slow In 2004
Growth in paid search engine marketing in the US will slow to 22.5% this year, compared to 123% during 2003, according to a new report from eMarketer. The e-business research portal has predicted that revenues will surpass $2.5 billion during 2004, but the triple-digit growth of last year will fall considerably.
Last year revenues across the fledging industry grew to over $2 billion, compared to $927 million during 2002. It now accounts for 30% of all online advertising spend, almost double that of 2002. During 2004 eMarketer expects paid search engine marketing to grow by $0.5 billion, and a further $0.5 billion during 2005 to almost $3 billion.
But the company warns that for growth in paid search engine advertising to continue, search sites and portals will have to create products tailored to local advertisers, which have not yet been targeted by the industry.
“The market potential for local search is enormous,” said eMarketer senior analyst David Hallerman, who wrote the report. “As search engines find more ways to work with traditional yellow page providers, merging the success of online search with the personalised sales forces required to gain more local advertisers, the market will expand exponentially during the latter part of the decade.”
Research from The Kelsey Group found that 17% of small to medium-sized businesses already use search engine marketing, but 77% place ads in their local yellow pages. As almost half of all of these businesses rely on their websites for marketing, a shift to search marketing could be beneficial to local advertisers.