Search Ad Industry Keeps Up in the New Year

By January 09, 2009

Recent economic turmoil is shrinking ad spending, re-confirmed an eMarketer study released Tuesday. In the category of search ads, however, what is shrinking is not the actual monetary amount but simply its growth. This makes search seem robust when compared to other avenues of online ad budgeting, such as display ads or classifieds flattening growth or traditional media's annual spending downturns. Search advertising spending growth will shift from 29.5 percent at $8.8 billion in 2007 and 21.4 percent at $10.7 billion in 2008 to 14.9 percent at $12.3 billion in 2009. An essential tool for driving site traffic, search marketing has become another fixed cost of doing business. Another contributing factor towards search ad success is the diversity of the companies that utilize the tool. The wide range of marketers include nearly every industry category and all business sizes. Traditional media advertising relies on either large businesses for television or small for radio, but usually not both simultaneously.

With the highest level of marketer saturation and widest marketer variety, as well as a platform that enables complete return-over-investment measurement, search has assured stability in this time of turmoil. However, the different online advertising strategies are not completely independent. A MediaPost analysis of the study explains that while search is looking great compared to display ads, an abandonment of the latter will trigger a downturn in the former. This interdependent performance is caused by search campaigns playing off of display ads, and cutting display ads may result in fewer searches.

Driving online traffic by search is a primary concern - shown to be just as important as having a company Web site at all, but slashing ad spending will not just affect one area. Just as search is a fixed cost, it is possible that this study shows that related online advertising strategies may be fixed costs as well.

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