Search Engine Marketing Budgets to Triple by 2009

Search Engine Marketing Budgets to Triple by 2009

Search engine marketing spending will nearly triple by 2009, according to a JupiterResearch study. The forecast, released today, sees the market for paid search growing 189% from $1.9 billion in 2003 to $5.5 billion in 2009. The sharp rise in the cost-per-click of paid search in addition to the increase in paid clicks will drive this market. The average click price will jump to $0.47 in 2009, a 62% increase from $0.29 in 2003.

As prices rise, the return-on-investment (ROI) from search marketing has started to fall. Search marketers can still achieve a positive ROI, but only through an increased focus on measurement and more intelligent bidding. According to a JupiterResearch executive survey, just one-third of search marketers consider historical effectiveness data or the cost of goods sold when bidding for paid listings. Over half of search marketers use unsophisticated bid strategies or no specific bid strategy at all.

“Due to rising prices, many of the search marketers that used to get a great return on their investment are now only getting a good one,” said Nate Elliott, Associate Analyst at JupiterResearch. “As ROI continues to fall, marketers will need to do a better job measuring and optimizing their search campaigns. By improving efficiency, search marketers will be able to keep up with the higher prices and still profit from search leads.”