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The Market

The search marketplace is expanding at a rapid rate and here we will provide some trending data and pertinent links that will educate the publisher. Some facts to consider:

 

The Trends in Search and Search Marketing

-Search Advertising Revenue is $1.4 billion (2002); $7 billion (2007)
-Searches done daily: 550 million worldwide!
-Other than email, Search is the MOST COMMON Internet utility at 80% of all Internet users
-Pay For Performance (search ad model) has HIGHEST rated ROI and satisfaction of all online advertising today
-Search has LOWEST cost per lead of any marketing method ($.29/lead vs. $2.00/lead for banners and $9.94/lead for DM)

-Search is becoming the third-largest internet market after e-commerce and advertising,
-There are major opportunities to grow the scope of search beyond current Web site Search only, extending both its application and monetization. Google and Overture are likely to lead the technological path for this, with portals implementing and promoting the new applications. Increased penetration of broadband will make the use of the Internet as a “search appliance” more commonplace, replacing traditional sources, such as yellow pages.

-Search monetization has the potential to significantly exceed estimates as USBancorp forecast is based only on existing growth rates in search. A much wider adoption of Search by offline companies, particularly for local listings, could have significant impact on the growth of search revenues.

-Within the Internet universe search and advertising companies will show the fastest growth of all sectors over the next 18-24 months, ahead of e-commerce, services, and other segments.

• Top destinations in the United States:
Together Google, Yahoo!, MSN, AOL have greater than 80% market share

• Top destinations outside the United States:
Europe: T-Online and Google (Germany); Wanadoo and Free (France); MSN and Yahoo! (United Kingdom);
Japan: Yahoo! Japan, MSN

• What do people search on: 65% on information and reference; 15% on commerce-related searches; 20% on entertainment-related searches

• The key players: Yahoo! (Destination, search technology); Overture (paid listing, search technology); Google (destination, search technology, paid listings); MSN (Destination); AOL (destination); LookSmart (search engine, directory, paid Inclusion); Ask Jeeves (destination, search engine); FindWhat (paid listing); eSpotting (paid listing).

How Big Is Search? Search is the second most popular application on the Web, behind only e-mail. US Bancorp’s analysis suggests that globally, there are more than 550 million searches performed daily on the Web. Internet users in the United States alone perform about 245 million searches per day. They believe that about 35% of all Internet searches are commercial in nature, which could mean they are looking for a product online, such as a book; or a type of service, such as online dating. This equates to about 85 million searches per day in the United States, which could be monetized in some form. To put this in perspective, the analysis suggests that the total daily references to yellow pages (a direct marketing channel we view as very similar to search advertising) in the United States is about 37.5 million. While the broad adoption and usage of the Internet has been around for less than six years, yellow pages have been in circulation for more Than 110 years!

What Will Drive Search Growth?

Over the next seven years, we believe search volume will grow at a compounded annual rate of 5%-10% in the United States and at about 20% internationally. The growth of search volume comes from several factors: the organic growth of Internet users, the increased usage of the Web as an information medium, increased adoption of the Internet as a commerce channel and, of course, the early stage of the international markets, which creates high growth rates.

Broad based Acceptance Of The Internet As A Commerce And Marketing Channel.

The Internet has proven to be a viable business channel. US Bancorp expects many traditional businesses to increasingly become more active in using the Internet as a sales and marketing channel, driven primarily by the amount of time and money spent by consumers on the Internet. US Bancorp believes search will become a key method of finding and acquiring customers for them. After all, search is a key way that customers look for information and is becoming more relevant with the advent of new technologies and paid listings.

 

 

 

 

Sources: Jupiter Research, Yankelovich/ Harris Interactive and US Bancorp Piper Jaffrey Reports, 2003

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