According to a report from the Search Engine Marketing Professional Organization (SEMPO) based on research conducted by Radar Research, the vast majority of search engine marketing dollars were spent on paid placement in 2008.
A total of $13.5 billion was spent on search marketing in 2008, according to the report, which is titled “The State of Search Engine Marketing 2008.” Of this total, $11.9 billion was spent on paid search ads, or 88.4 percent of all dollars spent on search marketing during the year.
Within this category, 90.3 percent of these dollars were spent by search media firms, while 6.8 percent was spent in-house and 3.0 percent were spent by search engine marketing agencies.
A distant second, $1.4 billion was spent on organic search engine optimization in 2008, or 10.6 percent of all dollars spent on search marketing last year.
Within this sector, 78.9 percent of spending was in-house while 21.1 percent was spent by SEM agencies.
SEM technology was the recipient of $141.5 million in spending in 2008, according to the SEMPO report, which accounted for 1.1 percent of all search engine marketing spending during the year.
In this area, 57.1 percent was spent in-house, while 36.2 percent was spent by SEM agencies and 6.7 percent was spent on leasing.
David Hallerman, senior analyst at eMarketer, expects the ratio of spending to shift more to SEO.
“Internet users prefer organic listings to paid search,” he said in a statement. “They generally find them more relevant – or simply more acceptable – than advertising.”
In its article about the SEMPO report, eMarketer noted that “SEO is also cost-effective and works across all search engines. In addition, an optimized site doesn’t drop off the first results page even when a marketer’s spending slows or stops, as paid search does.”
SEMPO expects search marketing spending to grow 8.9 percent to $14.7 billion in 2009. It also foresees spending in this are to grow to $16.7 billion in 2010, $19.8 billion in 2011, $23.1 billion in 2012 and $26.1 billion in 2013.
eMarketer notes that other forecasts are less optimistic about search marketing spending in 2009, and indicates that its current estimate for search ad spending in the U.S. will be $12.3 billion this year.
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