NEW YORK: Online search is worth almost $800bn worldwide when considering the overall benefits it provides for consumers, brand owners and media companies, McKinsey has argued.
After conducting detailed analysis of Brazil, France, Germany, India and the US, a "conservative estimate" by the consultancy suggested search had a value of $780bn in 2009, contributing $540bn directly to the economy.
This figure was reached based on the understanding that search fuels price transparency, saves time, builds brand awareness, helps users find information and has facilitated new business models like price comparison sites.
Quoting third party sources, McKinsey stated the typical US web user performed 1,500 searches in 2010, with 1.6tr entries made globally, and Google alone indexing over 1tr unique URLs last year.
In demonstration of search's financial power, it broke out totals for various groups, such as retailers, where this channel generated between 1% and 2% of revenues, equating to at least $57bn in the US and $2.4bn in Brazil during 2009.
Advertisers benefit from raised awareness and the "long tail" effects of helping shoppers locate niche or specialist products that are otherwise hard to purchase, and as paid search allows highly precise targeting.
Search ads were found to yield a normal return on investment of 7:1, meaning US companies derived $121bn in 2010, standing at $13bn in Germany, $10bn in France, $5bn in Brazil and $1bn in India.
Tracking data from PCs and mobile also revealed organic search listings deliver an average of five clicks for every click on paid search ads when these two links appear together on one page.
Content creators, like media owners, gain from the fact external and in-house search steers users to material and drives sales of output such as music and video, alongside enjoying advantages as sellers and buyers of advertising.
In the US, advertising was worth more than $2bn for this category alone, measured against around $357m in Germany, $164m in France, $142m in Brazil and $20m in Brazil.
For consumers, the combination of price transparency, better matching, accessing "long-tail" goods and saving time hit $41.9bn in the US, $8bn in Germany, $6.6bn in France, $1.1bn in Brazil and $400m in India.
"The value to consumers is likely to rise as people increasingly use smartphones to research products while shopping in physical stores," McKinsey added, with location-based services set to play a similar role going forward.
Data sourced from McKinsey; additional content by Warc staff