Search growth to slow through 2008

Search marketing is by no means dead - or even dying - but according to a recent report from RBC Capital Markets and SearchIgnite, search will begin to slow as we move into 2008.

by Kristina Knight

The report notes that in Q4, 2007 search grew by 26% year over year. However the growth rate was actually slower than the growth rate in 2006, which is an indicator that spending in the search realm will continue to slow in 2008.

Much of this slow down is due to the maturation of the search industry. Marketers have jumped at the chance to begin search campaigns over the past few years, however, as more marketers log on fewer are left to begin that first campaign. So, of course, the growth rate will slow.

Roger Barnette, president of SearchIgnite said (via MediaPost), ". . .Marketers are increasing spend and the industry is still growing, but we are seeing the amount of increases in some advertisers' spending shrink, and these are the earliest signs of the maturation of the industry. Marketers can't grow their spend in any channel at 100% per year forever, it just doesn't make sense."

However, there are highlights for search marketers. During the 2007 holiday season advertisers increase search spending by more than 70% over Q3 numbers. This is an indicator that search marketing may not be as tied to the rest of the economy in the US as a whole; advertisers may not slow their search ad-spends as fast or as much as they would slow their traditional advertising spends.