Google's Search Supremacy Could Drive Up Ad Rates Down Under

19 October 2007

SYDNEY: The enthusiasm of Australia's web-surfing Googlistas has hiked the US giant's search ad rates to a level that has already driven some local advertisers out of the burgeoning sector.

The Down Under search market - annual worth estimated at around A$400 million (US$357.7m; €251.75m; £175.44m) - represents some 40% of the nation's internet advertising market.

A situation that is not to the liking of John Tawadros, worldwide coo of Aegis-owned but US-headquartered search engine marketing group iProspect.

Says Tawadros, currently in Australia to launch the company's first office in the Asia-Pacific region: "It's an auction-based system so it can only go one way.

"If you look at the US market [where Google commands 62% of all search requests], Google's prices were up 12% in the third quarter over quarter two."

"The biggest difference in Australia is that has 72% [of all search requests] and has another 17%. So that's 89% of all search activity which goes to Google. That is massive."

Tawadros cited the UK, which although "a more advanced market ignored search engines other than Google".

Accordingly: "It is almost too expensive for some brands to actually advertise in search, whereas [in Australia] search is the cheapest media unit we've got - at the moment."

Nonetheless: "There is substantial growth in paid search, without a doubt, because it's the easiest thing for advertisers to get their head around … But you're going to get those price rises."

Data sourced from Sydney Morning Herald; additional content by WARC staff