Search Marketing’s 800-Pound Gorilla

JANUARY 30, 2008

Is Google an online monster?

eMarketer estimates that over $8.6 billion was spent on search engine advertising in 2007.”The spectacular gains for US search advertising spending over 10 years, rising from less than $300 million in 2001 to almost $16.6 billion in 2011, represent a rare phenomenon in marketing—namely, considerable customer satisfaction,” says David Hallerman, eMarketer Senior Analyst and author of the new report, Search Engine Marketing: User and Spending Trends, “considerable customer satisfaction.”

In a Harris Interactive poll, 84% of respondents cited search engines for good customer service, topped only by supermarkets.

No wonder usage is growing.

“At least 155 million people in the US used search engines in 2007,” says Mr. Hallerman. “That number will rise by 25 million in 2011.”

Search ad spending is up, too

eMarketer estimates that US search advertising spending grew almost 27% last year.

All of the eight researchers eMarketer surveyed project continued growth in spending. However, all but one, Forrester, see the growth rate slowly declining.

For now, though, one company is reaping an overwhelming share of the benefits of both customer satisfaction and growth in the industry.

“Google dominates the market,” says Mr. Hallerman. “It draws far more search users and search requests—and therefore search ad revenues—than all its rivals put together.”

eMarketer estimates that Google raked in 75% of US paid search advertising in 2007, up from 60% in 2006. Number two Yahoo! collected a 9% share, and everyone else split 16% of the pie.

”That’s still a lot,” says Mr. Hallerman. “With over $8.6 billion going to search engine advertising in 2007, that 16% stake equaled nearly $1.4 billion. And with search spending projected to nearly double in 2011, even a small slice of the pie represents significant revenue.”

Find out how users search, where they search and what they search for. Download the new eMarketer report, Search Engine Marketing: User and Spending Trends, today.  

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