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U.S. spending on paid search advertising rose to about $2.06 billion last year, up 123% from $923 million in 2002, but will rise more slowly this year, about 23%, to over $2.5 billion. It figures search advertising will rise to about $3 billion next year, but then face sharper growth later in the decade.
Just wondering if this is on the basis of any distinct logic or trend or just an extrapolation of the classical "early adopters-followers - business life cycle model"where a steep growth is followed by a more gentle one.
But,even then, is paid inclusion still not in the "early adopter" stage? Especially,in terms of business volumes.
What else can justify the prediction...
Great point - "What we all see - incredible growing SEM budgets - is the reality."
This growth is going to come from two different means:
1) New e-commerce businesses that didn't have a marketing budget in the first place and didn't even exisit say 5 years ago.
2) Traditional businesses who are simply reallocating (a portion of) their budgets from offline spend to SEM spent.
For some of the smaller businesses (the "mom's and pop's") this may mean the line-ball share of their marketing dollars switching from the Yellowpages type books/directories, to SEM. This will be even more so once localised search becomes a true reality.
For the medium to bigger businesses, SEM is just going to be another tool they use to attract customers and will probably *gulp* fall under the responsibility of a marketing agency who has little to no knowledge of SEM but has the client relationship. We have seen that already with many marketing firms winning SEM business but not knowing how to deliver.
At the end of the day, we all know that the paid search market is going to increase, as it moves from early adopter through to early majority.