Report: Paid search tops $9B

Paid search companies hit a milestone in 2006 according to a new report from the Search Engine Marketing Professional Organization (SEMPO). In North America, companies spent nearly $9.5 billion for paid search campaigns last year.

by Kristina Knight

According to SEMPO's "The State of Search Engine Marketing 2006" report, about 86% of that spending ($8 billion) went to pay-per-click ads. Spending for organic search engine optimization topped 12% (about $1 billion). Paid inclusion declined to about 1% ($94 million), and SEM technology platforms accounted for 1.3% ($122 million) of the search spend in 2006. More than 75% of search advertisers polled say search engine optimization is their preferred venue, rather than paid search ads.

"We have moved from the first wave of adoption of search-based marketing to the myriad of small and medium sized businesses, many of them startups, using SEM as a fundamental part of their business," said Kevin Lee, chair of the SEMPO Research Committee.

One new development for search advertisers is that they prefer to grow direct sales from campaigns rather than brand awareness. Roughly 58% of search marketers wanted direct sales while 57% wanted to grow their brand awareness.

Google Adwords led the pack for search ad providers with roughly 96% of advertisers using their platform. About 75% say they also purchased pay-per-click ads through Yahoo, and 68% say they also bought MSN search ads in 2006.