Paid Search To Reach $26 Billion

    October 15, 2008

Even with the global economy faltering, spending on paid search advertising still has room to grow and is on track to reach more than $26.9 billion by 2011.

New data reveals that the largest search marketers would spend even more if they could, according to a recent study by JupiterResearch, commissioned by search management firm Marin Software.

The data found that the majority (92%) of large search marketers would increase their pay-per-click (PPC) spend an average of 22 percent if major technology and management barriers were resolved.

"While paid search market growth remains strong, our research shows that the industry has matured to a point where new technologies and approaches are needed to support and evolve large search marketing programs," said Kevin Ryan, search industry marketing expert and CEO of Motivity Marketing.

"Next-generation search management applications are now hitting the market and quickly gaining in popularity, which should facilitate increased spending at the company level and drive additional growth in the search industry as a whole."

Eighty-five percent of marketers said the complexity of paid search management is growing and 44 percent said that running a well-managed, large-scale search marketing campaign is more difficult than running an election campaign for office.

The majority (78%) of marketers believe managing large keyword lists is cumbersome and more than half (59%) say they don’t have the staff to manage paid search campaigns. Sixty-nine percent said existing applications are not robust enough for their needs.

Even with those challenges, search marketing is still a top priority for marketers. The good news is 79 percent are spending more on paid search management every year, and 67 percent of advertisers reported that increasing the use of PPC campaigns is a top strategy going forward.

"Search marketing has become a strategic imperative for many companies, but the lack of technology and infrastructure to support search marketing poses a serious problem for advertisers looking to grow their PPC spend. This represents a potential Achilles heel for search industry growth," said Marc Barach, chief marketing officer of Marin Software.

"The next wave of paid search growth will rely on large advertisers using professional second-generation applications to manage the complexity of their PPC programs, so they can cost-effectively grow their program spend without requiring added resources."