US search market under pressure

10 March 2009

WAKEFIELD, Massachusetts: The Search Engine Marketing Professional Organization predicts that US search adspend will increase by 9% to $14.7 billion (€11.6bn; £10.6bn) this year, down from a prior prediction of $18.8 billion as marketers rein in their budgets.

According to a survey of 890 advertisers and agencies conducted by Didit on behalf of SEMPO, the American search market will be worth $19.8bn by 2011, compared with its previous estimate of $25.2bn.

Kevin Lee, president of Didit, argues US shoppers are currently "searching less" for a wide number of products.

More specifically, while consumers are searching for coupons and deals, luxury goods and business-to-business operators are finding there are essentially "fewer searchers out there in the market".

As such, search adspend is "notably lower" across a number of categories as advertisers reduce their expenditure as a result of "click supply issues".

One area he also predicts will continue to grow in popularity are targeted search ads, which will look at consumers previous online behaviour in order to display appropriate ads.

However, Marianne Wolk, an analyst at the Susquehanna Financial Group, still predicts that Google – which has 63% of the US search market – could see its first-quarter revenues could fall by 5.6% quarter-on-quarter, which would mark the first such decrease in the company's history.

Data sourced from Wall Street Journal; additional content by WARC staff