Search Spend Growth Drops Below 30%; Mocks the Recession

Thursday, September 4th, 2008 by Andy Beal

Search Spend Growth Drops Below 30%; Mocks the Recession

Take a look at these two headlines:

U.K. SEM Spend Slows, Signaling Market Maturity

JPMorgan analyst lowers online ad forecast, says economic weakness hurting Internet

Time to call it quits as an online marketer and find a new job? Hardly!

Whenever you see headlines like this, be sure to read the entire article. In this case, you’d see that the "weakness" and "slows" in online advertising are still much healthier than other industries; say real estate or the auto industry.

So, what’s up with the state of the online advertising industry? Well, in the UK…

[E-consultancy's] 2008 search engine marketing buyer’s guide, released this week, predicts that SEM spend in the U.K. will rise by 24 percent in 2008, down from 58 percent year on year growth in 2007 and 65 percent growth in 2006.

Total spend is therefore predicted to reach around £2.75 billion ($4.9 billion) this year, up from a £2.2 billion ($3.9 billion) spend in 2007.

Not bad, considering the size of the industry. Also, SEO spend is still expected to achieve 32% growth in 2008 (in the UK).

Even in the US–which is arguably in a recession–online advertising spend still continues to grow, albeit less quickly. And, when you look at the paid search channel, analysts are still predicting 27% growth in 2008 and 26% growth in 2009. Not bad, eh?

Sure, the online marketing industry will be impacted by economic conditions, but I wouldn’t panic and go get your real estate license just yet.

Save & Share

Similar Stories in: Display, Research, Search | Forward: Email This Post

9 comments on “Search Spend Growth Drops Below 30%; Mocks the Recession”

Ami Ohayon Says:

September 4th, 2008 at 10:47 am

Given the economy, it’s bound to flatten some … I think a more interesting (or at least, equally interesting) number will be what happens to both online advertising and online purchasing in the run up to Christmas.

My prediction? The pie won’t grow this year, but the proportion of total spend that happens online, both advertising and consumer spending, will increase greatly year to year.

Ami Ohayon’s last blog post..From Jerusalem to Boston
Hubcaps Says:

September 4th, 2008 at 11:17 am

Interesting, first thing I have seen about a pull back in spending. I would be willing to bet the majority of the cut back are coming from major companies who are cutting costs, regardless of performance, to appease shareholders.
PS3 Says:

September 5th, 2008 at 3:26 pm

We (here in the UK) have spent the last 6 months talking ourselves towards recession and bemoaning the credit crunch. It is like a self fullfilling prophecy.

I agree with Ami that a large proportion of what spending there is will move towards the internet. It is the high street stores that will suffer most.
Ashley Says:

September 6th, 2008 at 5:56 am

If one sees the results it will spend much money on online advertising, so it is not a suprise for me!

Ashley’s last blog post..Jingle Bell Rock Lyrics
iPod Fan Says:

September 6th, 2008 at 9:54 am

More and more people are moving from offline to online advertising.
Utah SEO Pro Says:

September 7th, 2008 at 4:10 am

The recession has definitely caught up to the internet but is not affecting it to the degree of other markets.

Utah SEO Pro’s last blog post..Building an SEO Friendly Site - SES San Jose 2008 Presentation
House Signs Says:

September 8th, 2008 at 5:46 pm

It shows how powerful the internet really is, when people are still spending on the internet for their marketing, but slowing, or stopping elsewhere though the credit crunch. I think especially for bad credit loans, the internet is the best place to advertise.

House Signs’s last blog post..House Signs - Hand Painted Signs by Trudy Silcox
Creativity,Marketing and Innovation » Blog Archive » The Real News About Online Advertising Says:

September 15th, 2008 at 5:30 am

[...] noted by Andy Beal earlier today there appears to be some unnecessary alarmism regarding the current state on online ad spends. I [...]
brando the Great Says:

October 6th, 2008 at 3:55 am

That why smart folks like me don’t get paid.

Marketing Pilgrim