Search Marketing as % of total online spend

Michal Lorenc's picture
Instructor
11/10/2011
PPC, SEM

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According to IAB (Internet Advertising Bureau), Internet advertising revenues in the United States totaled $14.9 billion for the first six months of 2011 (increase of 23% over last year).

Search Revenue accounted for 49% of that total (up from 47% from year ago), followed by Display/Banners (23%), Sponsorship (8%), Rich Media (5%) and Digital Video (5%),

You can view and download full report here

So - 49 cents of each $1.00 spent on online advertising goes towards search, which means that Search Advertising will likely exceed $15 Billion this year (and that's just in the US).

Here's timely article from The New York Times describing one small business owner's experiment in stopping AdWords.

 

 

Comments & Feedback

Student

I really enjoyed reading this article!  It does a great job at showing how influential Google AdWords can be.  In my opinion the amount of advertising on searches will only increase as the internet becomes a larger medium for purchasing items.  Before this class I didn't really think much about SEO, but now I realize how vital it is for any business.

Student

There should be more and more spending on online advertising because the internet nowadays is so popular in every group. people use internet everyday via different ways like computers phones and etc. Also, people search more by themselves other then listen to the idea of a salesperson so conpanys should increase their spending for sure. 

Student

I believe that more corporations or simply businesses in general are jumping on the bandwagon and employing more SEO or internet marketing strategy. It was easy to see the benefits of a Google Adwords campaign after completing the assignment for the week. It is no surprise that there was an increasing rate of advertising this past year. While of course, this article speaks to search but I do wonder what the revenues would be for internet marketing in general. I would imagine it would be huge.

Student

I was surprised about the amount of spending 14.9 billion for just six months on internet advertising. I know more people are using tablet,blet PCs, mobile phones which need internet access. As many internet boomers are being created, more stores or companies are using internet for their marketing tools. Nowadays, I can see internet advertising such as banners every place, even small corner of internet page. Facebook, Twitter, e-mail ads, checking-in services are also very important function for internet advertising. Justin Bieber is one of the most successful popstar using internet marketing. Internet marketing can reach a target market in an instant too. In the same manner, potential customers can reach your online business as quickly as one click. I'm doing this course and its homework using Internet too!

Student

I think it's interesting that Sponsorship, Rich Media and Digital Video (especially the last two) account for such a small percentage of spending. The types of placement I respond most to, generally speaking, are not search-related. Rarely do I pay attention to sponsored results, in fact I usually disregard them entirely. I do appreciate, though, rich media sponsored directly by an industry source that makes organic sense to the content of the video. Clever placement of sponsorships can go a long way. A good example of this is the Ken Block Gymkhana series of videos. Each features prominent promotion of Block's company, DC Shoes, as well as his professional sponsorships (most notably Monster and Ford). The videos are all massive viral success, and to impressionable young teenagers eager to run out to Pac Sun and buy the gear they've seen in the video, the message is recieved whether it's understood that it's a message at all.

Student

$15 billion spent on Search Advertising is a lot of money, but I wasn't surprised at all. Search engines have become the core advertising method; therefore, advertisers will spend more on the Internet Ads, because it affects customers the most. Not everyone thinks of the search engines as the most important ways of advertising, but the fact is that Internet Ads have the most tremendous impact on the customers. Since people use cell phones and computers more often and widely in this digital generation, advertisers will want to have their Ads anywhere possible. The world will only develop, so does the search engines, and that makes the revenue to increase because Web advertising has the biggest effect of all.

Student

This doesn't suprise me one bit. I think with the benefits that search engine marketing posesses it can be a huge contribution to the internet presence of several companies. It allows companies to see real-time results as well as evaluate strategic campaigns based on those results. I also think it is the most effective way to target your direct audience because the company is in control of the marketing strategy. I think this will only continue to increase as more companies understanf the benfits of search engine marketing.

Student

I am actually kind of suprised that $14.9 billion was spent for just six months on internet advertising. I know that the using the web has become more and more relevant but seeing the number is still suprising. The internet has boomed over the years, it's no suprise that more and more companies are using it for their advertising gains. I see ads everywhere on the web, it's on my Facebook, in my email, and commericals and ads are becoming more common in Youtube videos, which I don't especially like. It's a great opportunity that companies should take advantage of, internet is the fastest way to reach people, so why not use it to your advantage.

Student

Ads are everywhere on the internet. Everywhere I look I am bombarded and seeing how technology and the internet are continuously improving, it's not so much of a shocker that the amount of money being spent matches the success rate.  What is shocking, is thinking about the fact that some people are still feeling the the effect of the recession and without jobs and money while more than $15 billion is being spent on Advertising. Clearly this is what it takes for Search Advertising to be successful but I cant help to think that $15 billion is a little excessive and expensive. The comparison is mind blowing.   

Student

I think that it is very interesting that there was a total of $14.9 billion.  It just shows you how the internet has expanded so much in the past years.  The use of the internet has risen.  For example, people use mobile banking instead of going to the bank.  Soon there will be no need for newspapers to be printed.  Advertising on the  internet is such low risk because everyone uses the internet. 

Student
This is crazy to me to think that our society is progressing so much everyday that advertising is expanding so fast into new places is amazing. The way life is now connection and social networking is everything and if you dont get out there in the new market and advertise your company will fall behind the competition.
Student

This goes to show how important it is to understand the world of search engine optimization and how to put in successful search engine advertisements. Companies are seeing how important it is to reach consumers at a particular point in the advertising plan. AdWords is an incredible platform that has transformed so many businesses.  I am not suprised with the prediction of increased internet advertising revenues.  The web, especially search engines, are used by almost everybody today which give larger audiences to connect to.

Student
What a lot of people don't realize about Adwords is the branding aspect of it. Yes they are paid advertisments designed for direct response from customers in the buying cycle, but it also places a name in front of customers every time they search for a product that company offers.  Chances are shoppers aren't going to just do one search for something and buy it right there on the spot.  They are going to search a few times, and do some research before they buy.  More than likely they are going to research by using Google. By the time they are ready to make an actual purchase, Adwords has placed the name of that company in front of the buyers several times and whether the buyer knows it or not; a connection between that product and the company running the ad is made. 
Student

It comes as no surprise to me that the use, as well as the success rate of internet advertising is increasing steadily.  Adwords, specifically, is a part of Google's high-powered advertising machine.  Google possesses significant resources which allow Adwords to continue to be so successful. 

Think about it - where do you go to research a product, find the location of a store or restaurant, find out where you can purchase a specific product, who to call for specific services?  The list goes on.  I Google.  We are becoming consumers who research and gather information online - at the tips of our fingers - before flipping through the yellow pages to talk to a salesperson claiming to be an expert on the telephone, or before driving to the location, only to find that they do not carry what we are looking for.  Time and resources are precious, and becoming increasingly valuable as our society demands more from  us.

Student

Very interesting!  Who knew things would be going this way when I was born more than 20 years ago.  Getting old!

Student

I joined the google online marketing campaign in last semester. When we, my group, started working on it, we didn't believe that Google AdWords would work for our client, a local thrift store. However, just $200 helped the business boost a lot! It truly worked. There were some effective click-throughs and some went into the final profit. I believe that online advertising through the PPC ads will grow bigger, especially along with the dramatically growing of social media.

Student

Online advertsing is a huge and very effective market. Google should lead the industry and focus the advertsing in varies chanels, including smart phone apps, youtube advertsing etc. This will make the advertsing market more diverse and inertesting.

Student

This doesn't surprise me. TV advertisements and radio advertisements are slowly declining, especially since with TV ads you can just DVR it. Also, the Internet offers landing pages and other things to bring consumers to exactly where the company wants them.

Student

Web-searching business becomes bigger and bigger in this web-based marketplace!

Student

The more I learn about online advertising and the benefits and progress it is making in the business world, it does not come to a surprise that online advertising reach 15 billion dollars in the first six months of 2011.  It also does not surprise me that 50% of that comes from searches.  This really shows how important it has become to using tools such as Google AdWords, and the effectiveness it can have for a company.  

 

Student

Like many of my other classmates this also comes as no suprise to me, with our constant "Google it" culture that we have become it is almost a must for a business to have some sort of advertsing on any search engine. And I only see these number increasing possibly at a  higher rate, since with all these tablets and increasing use of smartphones advertising posibilities are almost limitless, especially now that companies are getting even more creative ex Macys who launched thier own series Wendy to advertise their Mstyle Lab 

Student

Like many of my other classmates this also comes as no suprise to me, with our constant "Google it" culture that we have become it is almost a must for a business to have some sort of advertsing on any search engine. And I only see these number increasing possibly at a  higher rate, since with all these tablets and increasing use of smartphones advertising posibilities are almost limitless, especially now that companies are getting even more creative ex Macys who launched thier own series Wendy to advertise their Mstyle Lab 

Student

This drastic change from traditonal media to internet advertising really isn't too shocking to me, but the amount of money spent is. Generally, advertising online is way less expensive than advertising on TV through a commercial. I think it's beneficial to them that they are spending a good amount of money on internet advertising because that's where most people go to find information. Like I said, the drasitic change doesn't surprise me too much because most traditonal media ads are either zipped or zapped by people, but internet ads are viewable to everyone and certain ads cannot be blocked. I think we are going to see even more spending on internet advertisements as the years progress and less on traditional media.

Student

The shift toward digital media is a necessity for most companies. Nowadays you can not  simply rely on traditional media (although I think it still has it's place. Consumers want what they want, when they want it. The internet and search engines allow for this to happen. Businesses can now find their consumers more easily than ever, with specific targeting. I think that this allows for ad dollars to be spent in a much wiser way. Money is not simply being thrown around with the hopes that people will hear the message. Advertising is becoming much more methodical, with great attention paid to the hard numbers. 

Student

i thinks its crazy to know just how much technology is changing everything. It seems like we have been living with technology forever, and is almost impossible to imagine a life without most of the technology. Since this rapid growth of all the technology in the world, there is so much more for advertiserrs to get a hold of, and this means more spending. Just because the internet world is growing so fast, its the only reason why the spending is also growing. I think most of the big companies will survive this and be able to spend on internet advertising and search because they will most likely cut down form traditional media. Internet is growing and traditional is shrinking, the money has to go somewhere.

Student

As more and more content is online these days it only makes sense that businesses are advertising online as well. Search Marketing is a very effective and efficient way of target marketing. People know exactly what they are looking for and so should advertisers. As for the banner ads, I am actually surprised to see a percentage as high as the twenties. I completely ignore banner ads for the most part when searching a webpage and it amazes me that they still bring in some revenue. However, as technology develops so will the techniques to advertise.

Student

YEah I am not surprised by the numbers at all. The internet is the quickest and easiest way for companies to advertise their products online. I can see half of advertisement going to internet searching. Online advertising is more common than other forms of advertisement now. Even TRL is no longer on air, as everyone can look at music videos on YouTube. Google and their products have a huge part of the online advertisement rates increasing.

Student

After reading the New York Times article, I don't see these statistics going down anytime soon.  It is strange how effective the web is becoming in advertising, not to mention vital for many companies.  The small business owner in the article said he pays $2,000 per week for over $40,000 in sales, and drastically lost online traffic (and business) when turning off AdWords.  Who knows, maybe one day advertising will be soley on the internet!

Student

Reading this comes no surprise to me at all.  Judging on what I have learned and through SEO and SEM this type of advertising can become very effective in marketing.  Theres no doubt that online marketing is gaining interest and search advertising is one of the biggest ways to use this online medium. 

Student

The information in the artcle did not come as a surprise to me. I was interested to see that 49% of internet advertising is search revenue. What surprised me was that banners made up less than a quarter of online advertising. I feel like that was the original way to advertise online and I still thought it was the most recgonizable and popular way. Maybe people just click out of the ads right away because it is annoying.

Student

It is very interesting to see that search revenue is now 49% of the total internet advertising. I was also surprised to see that display and banners was were less 25% of all internet advertising. It looks that people are starting to ignore display ads and now search is the best way to reach potential consumers. If this trend continues, search will continue to be a major part of online advertising. 

Student

This does not come as a surprise to me.  I think that with the use of Google’s AdWords and their analytics your investment will be worth it.  You can use the tools and tweak your ad constantly to get the best ROI.  I can only see this number going up over the next couple years. 

Student

Although Internet advertising revenue is increasing 23% over last year and it seems large, I think is not surprising. Internet is already become common thing in people’s live, Internet advertising can bring more audiences, even world wild. Also, people very like to use online search right now, it is convenient and directly way to get the results and answers what people want to. Thus, I’m also not surprising that search revenue can get that high percentage.

Student

I think the world is realizing just what aficionados of Google AdWords have known about it the whole time: it’s worth the investment (ROI) to use it.  AdWords has what pop-ups or ribbon ads have lacked before- it’s located on the one site that nearly all web navigators use, and it can key in on exactly what users are looking for.  Google, you’ve done it again!  The $15 Billion dollar number was staggering to me!  But if anyone were to make that much money on advertising profit, I would bet it’d be Google.  They’ve completely mastered all aspects of the web in my opinion, and revolutionized the world of advertising.

Student

Even more interesting to me than the amount of money spent on search advertising, is the result that the small business owner had when he stopped using Google Adwords.  Everything we are taught about good search engine optimization says that we should be able to generate "clicks" without paying.  But this man found that his business dropped significantly when he solely relied on SEO, and cancelled Adwords.  He actually ended up stopping his experiment early because he had lost so much business due to less internet traffic.  It is crazy to me that Google has that much power, but it makes sense - they want to earn money, so naturally their own search engine would work best for people who pay them!  Definitely interested in getting to know this program better, because it is obviously beneficial!

Student

I think it is not surprising. Internet using is increasing today, and I believe that will continually increase in the future. People use Internet to search that is a normal thing at present, so 49% search revenue is also a unsurping thing.

Student

I am not really surprised at all that almost 50% of the online budget goes towards search.  Not only is it expensive to try and stay competitive, especially in a very clustered market, but it can also be hard to keep organized.  During my internship this summer I witnessed the stressful amount of work and detail that went into finding the perfect terms.  Never mind monitoring these words after you finally decide which terms to select.

Conversely, I am surprised that 23% is spent on banner ads.  I know they seem relevant, but I personally ignore them.  Even when I actually notice them, I very rarely follow through and click on them.  I would go as far to say that I have probably clicked on more banner ads by accident than I have on purpose.  

I feel that Digital Video should really receive more focus.  It seems that consumers can find videos more relevant and relatable, resulting in more value.

Student

I'm not extremely surprised to see how much is invested in search revenue.  Search marketing is such an easy thing to do and it is marketing to people who are searching for your product or similar product.  It only makes sense for a company to use search engine marketing because the best customers to market to are the ones that have a want or need for your product.  Also, as the New York Times article states, it is very easy to spend a little and earn a lot through search marketing.  The author states that he has been spending $500 a day and has generated $1.8 million in sales.  I'm no accountant but that seems like a positive cost-benefit analysis to me.  Also, I am surprised by banner ads being so high because I could probably not recall one banner ad I've seen in the last week but obviously if companies are investing in them, people are viewing the banner ads or else the company would not waste their time.  Overall, I think search marketing is a great tool and will probably increase even more in the future. 

Student

Thats cool for Search Advertising and all, but what I'm really surprised about is that banner ads generated 23%? Guess 'banner blindness' isn't quite as prevalent as I though. Personally when I am cruisin' around the web I rarely even notice the banner ads that I see (although usually this is becaues they don't load until I'm well past them). Good for Search Advertising though. Not really surprising.

Student

This blog post comes as no surprise to me, an avid internet user and marketer. I think the most important thing to glean from this post is the fact that search engine marketing accounts for almost 50% of online marketing revenue, and this increase has shown no signs of slowing down. It's a general certainty that people use search engines like google, bing, and yahoo, to find/find out about just about everything in the world around them. These search engines are most people's gateway to departmentalizing and breaking down the mass of information that is the world wide web, and marketers have realized, correctly so, that this is the perfect place to make a first digital impression on the consumer, and determine their online experience for the length of time they are trying to get information about a product, or even purchase it. I think we will see the percent of banner ads go down, as they barely even register in the mind of the average online consumer in 2011, and an increase in rich media and digital video, which are far more engaging to the user.

Student

It is no surprise to me that online advertising is doing so successful. In all of my ADV classes, we learn how newspapers and magazine subscriptions are declining because this media is available online. This is the world we live in now, it is all about technology. A few years from now, there will be other smarter ways for advertisers to reach consumers, what they are....I have no idea, but I do know that online marketing, and social marketing is growing like wildfire.

Student

Advertising is definitely one of the industries that's always in par with changing times. I agree, it's no surprise at all the online advertising is successful because it is in fact the digital age. TV has gone online, radio, books, music--virtually any form of media so it would only make sense marketers advertise online. Google Tools makes it even easier to advertising online because of search engines and more segmented advertising. 

Student

Advertising is definitely one of the industries that's always in par with changing times. I agree, it's no surprise at all the online advertising is successful because it is in fact the digital age. TV has gone online, radio, books, music--virtually any form of media so it would only make sense marketers advertise online. Google Tools makes it even easier to advertising online because of search engines and more segmented advertising. 

Student

I am not surprised that internet advertising has grown so much in recent years. It is only going to keep growing and expanding. Internet advertising is much easier for businesses to use than other types such as print and radio. You can make advertisements online much easier and much cheaper than any other kind. I did not think search advertising would be as big as it is though. I think the growth is good and SEM and SEO will continue to grow and expand.

Student

I think Internet advertising is really powerful and effective. Therefore, it's not surprised that the Internet advertising grows so quickly, and businesses assign a big part of budget on it. Since it's much easier to design a keyword ad or optimize your websites than making a TV commercial and a print ad, businesses are engaging in Internet advertising. Moreover, more and more people in the world are using Internet! Therefore, it's also a good opportunity for marketers to attact more costomers online!

Student

I’m not surprised that U.S spent $14.9 billion in Internet advertising. Internet advertising is one of the powerful tool to use for business. People use search engines such as Google and Yahoo everyday, it makes sense to use online advertising for marketers. Also, it directly reach the target audience. Thus, online advertising might safer than other advertising tools to start with brand name out or awareness.

Student

I guess prior to this class I was a little naive to think that Internet Advertising was not as big as it really is. To hear these statistics is a little surprising, especially to think that its only going to get bigger with the advancements in technology and how we are dependent on the internet. After reading the NYT article describing the small business owners experiment in stopping the use of AdWords, its clear that it is necessary to use AdWords to help generate business and once you started you shouldn't stop because it will slow down your business.

Student

Echoing the sentiments expressed by my classmates, I would also have to say that the figure given doesn't necessarily surprise me.  If anything, it speaks to the fact that marketers and advertisers, agencies and corporations alike, have all realised the value of search advertising and what the return on investment can be if done properly. 

Student

These statistics don't surprise me at all, when I was doing research for my brand I stumbled upon a stat that said 78% of Americans are using the internet. I think today people are information seekers, they want to research big ticket items so they are educated on what to look for before entering stores. With that being said it makes perfect sense that so much money is being spent on online advertising. It's so easy to find what your looking for online rather than doing it the old fashion way of just window shopping. People are crunched for time and the internet is the answer to people's time crunch issues. Eveytime I get online I'm flooded with all sorts of banner ads, and that's just me trying to check my e-mail. Even if you're at a site such as Target or Best Buy, there's advertising within their site, offering discounts if you open up a credit card, or get instant rebates, and less we forget online specials only. The point is businesses are taking advantage of the web, it would be a mistake if they did not.

Student

The rapid growth of internet advertising and specifically the growth of Seach Engine Marketing (SEM) is amazing. If you would have suggested this was the direction of advertising even a few years ago, many people would not have believed how much of an impact it could make. Unlike other types of advertising, this type has no pictures and very small amounts of text. This advertising can also be edited instantly and can be formatted to only reach certain audiences. I believe that this direction of advertising is going to be even more effective than other types previously. The only downfall to this, is that people not connected to Google for instance at all times will not be able to view this form of advertising.

Michal Lorenc's picture
Instructor
11/10/2011
PPC, SEM