The Evolution Of Search Engine Marketing

The world of search engine marketing (SEM) is in constant evolution. With increased numbers of search engines, and evolution in the techniques and technologies used, SEM is becoming a tool industries cannot afford to do without. Trends all over the world show that the pressure for SEM services is starting to come from their customers. Indeed, SEM is quickly evolving as the buzzword in a new, technology-driven advertising and on line marketing space. As a result, companies that are serious about their internet presence are making search engine marketing a key component in their advertising campaign.

Google, Yahoo and MSN own the majority of the search engine market share, with Google being the strongest. AOL, Ask Jeeves and Altavista capture smaller shares in the market, while a number of other geographically-specific and market-specific search engines compete in their own niches. In a study conducted in July 2005, Nielson/Netratings reported that the search engine market share was highest for Google at 48%. Yahoo and MSN had the market shares of 22% and 12% respectively.

MSN and Google were also the top destinations for most online purchases, reported a study conducted by comScore Networks (June 2005). The study highlighted that iMSN searchers were 48% more likely to buy online than the average Internet user. Google users were 42% more likely to buy online than the average Internet user. It also came to notice that while Google searches looked for more sophisticated search terms, simple broad term searches occurred for AOL, Yahoo and MSN.

One thing is becoming clearer today: Search engine advertising is not another Internet bubble, it is driven by users and the fact that people, everywhere, need to go somewhere to search and find information. Take China for example - who's heard of Baidu.com? Not too many people. It's a Chinese search engine that has been around for 5 years and is the World's 6th most-visited Internet site, thanks to China's fast growing internet market, currently with more just over 100 million Web surfers. Baidu is recently went through an initial public offering where is share price when from $27 to $150 in the period of a day. And what about Google? It recently reported quarterly revenues of $1.4 billion. Google's revenues excluding its payments for other websites in its advertising network jumped to $890 million, an increase of 110% from a year before and above the expected $842 million.

US Online Marketing Forecast: 2005 to 2010 by Forrester Research (May 2005) revealed that the arena for search engine marketing is all set to rise and will show growth of 33% in 2005. Forecasts reveal that the figures will reach $11.6 billion by 2010. Display advertising, which includes traditional banners and sponsorships, will grow at the average rate of 11% the next five years to $8 billion by 2010. US online advertising and marketing spending will reach $14.7 billion in 2005, a 23% increase over 2004. Trends also showed that while SEM is set to become more effective than traditional marketing channels, barriers include a lack of online advertising experience. However, search engine marketing firms are embracing this new branch of advertising and their customers are reaping the extremely lucrative rewards.