Overall increases in ad spending, global online traffic, e-commerce sales and broadband penetration are among the factors Google sees leading to fast growth for search engine marketing.
Patrick Keane, head of advertising sales strategy for Google Inc., noted that search currently accounts for only 3% of all Internet usage. Nearly four billion searches are done monthly by 110 million people in the U.S., and 16.5 billion searches are done monthly by 278 million people globally.
Over 10 million searches are done on Google per hour, noted Keane. Being first in a search listing doesn't necessarily mean you'll get the best clickthrough rate, said Keane, speaking at the Chicago Association of Direct Marketing's Direct Marketing Days Wednesday. Branded ads – regardless of their position – usually get a higher clickthrough.
The average keyword buy is usually in the 29-cent range, but that can vary widely depending on the product category. For example, for a category like hard disc recovery – where the average sale can be pricey and searchers are likely desperate to find a solution – keywords can be in the $50, $60 or $70 range.
Global ad spending in 2003 was $335 billion, or $52 per person, he noted. U.S. ad spending was $190 billion, or $653 per person. The Internet's share of U.S. spending was $6.9 billion, with 55% going towards display ads, 27% to search and 17% to e-mail.
Trademarks are a huge issue for search engines, he said. The issue is that you want to defend advertisers but at the same time offer consumers a greater choice. Google's solution is that competitors' trademarks can be used in keyword placement but not in creative. "We police that very heavily," he said.
