What is Search Advertising Worth?

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How often do you click a sponsored link?  Rarely? Never?!

If you do not click them, who does?

If these are confusing questions, consider that according to Marketwatch.com and Google itself, Google alone pocketed $4 BILLION+ of over $16 BILLION that was spent on Internet advertising in 2006: and the only kind of advertising they (and the other search engines) sold any relevant amount of was pay-per-click:

Google pay per click advertising over 4 billion dollars(that is four bllion dollars with a b!)

$16 Billion for those links to the right of and above and below the relevant stuff: that 80% of us do not click on!
So how much is it worth to appear on the first page, “organic” search results on all of the search engines for your targeted key word searches?

According to this article at Click Z News:

SEMPO, the Search Engine Marketing Professionals Organization, has released the results from its annual State of Search Engine Marketing 2006 report:

North American advertisers spent $9.4 billion on search engine marketing (SEM) in 2006, up 63 percent over the $5.75 billion spent on search in 2005, and beating last year’s estimate of $7.2 billion. Spending is now projected to grow to $18.6 billion by 2011 in North America.Out of the total 2006 spend, 8 billion dollars, or 86 percent, went to paid search; and 1.1 billion dollars, or 12 percent of overall spending, went to search engine optimization (SEO). Spending on SEM technologies, including leasing, agency solutions and in-house development, accounts for 1.3 percent of overall spending, only 122 million dollars; and paid inclusion accounted for 1.0 percent of spending, or 94 million dollars.

The interesting irony is that if I ask 100 people today how often they click a sponsored link on a search results page, over 80 of them will say rarely or never (try it yourself if you don’t believe me!).  Yet, according to most estimates, organic search egine placement spending is only a small fraction of the total: but those same eighty plus responders in my scenario all say they click the organic results daily – you do, right?!

So ask yourself: where is the value in online advertising today?


What is Search Advertising Worth?
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