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Paid Search Advertising: $2 Billion in 2004

US paid search advertising spending soared 123% over the previous year, rising from $923 million in 2002 to over $2 billion last year, according to the eMarketer Search Engine Marketing report. Estimated to grow by $0.5 billion this year and again in 2005, paid search will remain a substantial part of online advertising revenues.

In order for paid search growth to continue, however, search sites and portals will have to create products designed and priced to appeal to local advertisers – a vast business segment they have largely bypassed. Further spending growth will come from contextual search, which will deliver additional revenue streams to Web publishers and e-commerce sites.

“The market potential for local search is enormous,” says eMarketer Senior Analyst David Hallerman, author of the Search Engine Marketing report. “As search engines find more ways to work with traditional yellow page providers, merging the success of online search with the personalized sales forces required to gain more local advertisers, the market will expand exponentially during the latter part of the decade.”

From Coverage of a Kelsey Group Sponsored Event:

These are the key dilemmas presently facing the key personnel in interactive local media. It’s not so much that there aren’t ways right now to target locally online, but reaching out to and educating the advertisers has proved challenging. For years, the traditional yellow page publishers have used local street reps to sell space in their books, but those same reps can’t necessarily be counted on to up-sell interactive. Search engines like Yahoo!, Google, Terra Lycos and LookSmart don’t even have street salesforces, and one has to wonder how much effort they’d want to put in for $500 ad buys.

The options for search engines seem to be to either partner with existing Internet yellow pages (IYPs) to take advantage of both their salesforces and their extensive existing local listings or to buy an existing salesforce and build their own localized listings database.

Premier Local Search Engines, Internet Yellow Pages:

Vivante – Business and local search engine which offers customized searches to fit different lifestyles.

SuperPages – Verizon’s online yellow pages have just partnered with FindWhat to provide paid search listings.

Switchboard – Works with Google’s AdWords to provide paid search advertising.

Category SEO
SEJ STAFF Loren Baker Founder at Foundation Digital

Loren Baker is the Founder of SEJ, an Advisor at Alpha Brand Media and runs Foundation Digital, a digital marketing ...

Paid Search Advertising: $2 Billion in 2004

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