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Top Level Trends of SEM Worldwide in 2010 and 2011

hauksson-kristjan
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Worldwide, Internet marketing is changing fast. The leaders of old such as the United States and United Kingdom are still at the forefront, but countries like China, Russia, Brazil, Germany, and France are quickly catching up.

In South America, the Internet as a marketing channel has been picking up momentum. If you look at Internet utilization worldwide, there isn't one country that doesn't have Internet usage in one form or another.

Now in the beginning of a new year, it is vital to not only look to the past but to the future for the possibilities of Internet marketing, especially for those looking outside of the biggest non-English speaking markets.

I'll shine a light on the development of some of the biggest markets outside of the English language by reviewing and predicting trends of Internet marketing worldwide in 2010 and 2011. The idea is to summarize a few key points regarding the current and future status of search behavior, advertising attitude, and more.

Huge Worldwide Marketing Opportunities

The number of Internet users is reaching 2 billion people, close to 30 percent of the population of Earth, according to Internet World Stats. Looking at the penetration of Internet usage based on continents, the U.S. leads the way with some 77 percent of its estimated 2010 population online. Oceania (Australia) has around 61 percent; Europe comes next with 58.4 percent penetration; Latin America has 34.5 percent; the Middle East 29.8 percent; Asia 21.5 percent; and finally Africa 10.9 percent.

But when you look at sheer numbers there is some shift: Asia leads the way with around 825 million users; Europe is next with 475 million; North America has some 266 million; Latin America has 204 million; Africa has 110 million the Middle East has 63 million; and one of the leaders when it comes to penetration, Australia, is last with 21 million people online.

This tells us there is a huge opportunity when it comes to marketing worldwide. To be successful you never have to leave the comfort of your own chair.

If you want to get the attention of people living in Iceland, Google reaches around 85 percent of the population -- and in the France these numbers are even higher. Bottom line: marketing products and services online has never been easier.

The overall jump in Internet penetration worldwide since 2000 is close to 445 percent, creating access to nearly 2 billion consumers; which one could only dream of reaching via traditional media like TV and newspapers.

The industry is growing fast, organizations such as Search Engine Marketing Professional Organization, Interactive Advertising Bureau, and Web Analytics Association have all been working hard to establish standards and best practices in cooperation with both international search giants like Google, and local leaders like Baidu in China and Yandex in Russia, making the dark art of Internet marketing not so dark.

U.S., UK Markets

Social media has the focus; we're seeing Facebook, YouTube, and Twitter coming on strong with other players like the image sharing services Flickr staying popular.

But in the haze of social media, there are other major players out there.

Google is the main search engine, with close to 66 percent of the U.S. market; Yahoo is around 16 percent; Microsoft with their flagship Bing has 12%; Ask has 3.5%. Others are much smaller and barely register.

In the U.S. market there aren't many major changes brewing for 2011, though there might be some very nifty integration between Facebook and Bing, with "Likes" replacing "Links" in influencing search results. The actual implementation of this and how practical it will be remains to be seen.

The main impact is likely to be the rise of mobile phone usage. Google's Android has had the fastest rise in the mobile market in the U.S., with all the other vendors, including Apple, losing market share. This trend goes hand in hand with the rise Smart Phone sales.

The UK seems to echo the U.S. market somewhat and follows closely in market share and trends in using the channels that are out there. But there are still two major differences between these markets.

Twitter isn't as strong in the UK, while Google is much stronger with close to 90 percent market share, leaving the rest mainly to Yahoo and Bing.

In the UK and the U.S., Facebook and Twitter are yet to prove themselves as a direct advertising media, but as a part of the customer engagement and the full cycle of marketing they are a formidable part any companies marketing strategy.

Channels that are likely to be overlooked in both UK and U.S. online marketing are YouTube and Flickr. These are both strong marketing channels, especially when it comes to visual content.

Worldwide Search Engine Landscape

In short: Google is dominant, with several local players still holding their ground (and in some cases gaining).

In my home country, Iceland, a local search engine literally owned the market. When Google entered it was said it would never understand or be able to deal with the Icelandic language, as it was too complex. In 2010, Leit.is is close to gone and Google holds more than 80 percent of the market.

Globally, countries like China (Baidu), Russia (Yandex), and South Korea stick out with their own search engines. What makes South Korea so special is that the "international players" only have around 7 percent of the total search market, while Naver has 62 percent; Daum 21 percent; and Nate 10 percent.

To be fair, there are other search engines in markets that Google has under control. In Scandinavia you will find network of search sites called Eniro. In Czech Republic there is Sezam and in Poland Netsprint.

Other than that, Google holds the most cards and isn't likely to give them away. The only real contender by the looks of it worldwide is Facebook and things could go long way for them in 2011 if they play their cards right.

There are definitely some new frontiers that are likely to play roles in the next year or two, mainly and understandably countries with large population volume, such as Brazil, China, India and Russia. These are all big countries, not only in land mass but also population and boast a very fast-growing penetration of the Internet.

Russian Markets

Russia is home to some 142 million people; around 42 percent of them access the Internet. Google, Facebook, and Twitter aren't as dominant as they are in the U.S. and UK.

According to comScore, the biggest social networks in Russia are VKONTAKTE.RU with close to 73 percent reach, Odnoklassniki with some 39 percent reach, and Mail.Ru - My World with close to 33 percent. Facebook has around 9 percent reach in Russia and Twitter is just above 4 percent.

The Russian advertising market has grown hugely since 2004 with text-based ads going from around the equivalent of $21 million (U.S.) to an estimated $500 million in 2010.

In the Russian contextually targeted advertising market*, Yandex is the biggest with between 75 and 80 percent of the market; Google and Begun hold the rest.

What is fascinating about the Russian market is not only how fast it is growing but also that Google and the other usual suspects hold little real market share. There is real opportunity in e-commerce; since 2007 the growth of online shopping has nearly doubled and is estimated to have reached close to $6 billion in 2010.

German Markets

In Europe, Germany has slowly been taking the lead alongside the UK in adopting the Internet as a marketing and sales medium, but Germans are very careful when it comes to building business relationships online. This was underscored in a recent study done by Forrester that revealed Germans are quite focused on privacy and local payment options when shopping online.

When it comes to mainstream social media, Germans seems to be slow adopters, but as with other aspect of their Internet use, picking up speed quickly. Facebook now leads the way in Germany as the most used social network, going from around 11 million in 2009 to close to 18 million in 2010. The next networks are Wer-Kennet-Wen.de and Stayfriends.de, both with more than 5 million users in 2010.

Other Europe Markets

There are several other markets in Europe that are worth looking at, both because of the maturity of those markets and because of stable they have achieved. Markets like France, Italy, Holland, and Scandinavia (Denmark, Sweden, and Norway) are worth noting when it comes to looking at opportunities and options to sell products or services outside the comfort of your own country.

Japanese Markets

Japan is the only stronghold left for the American search giant Yahoo, but there is a twist to that as Google powers the search results for Yahoo.

What makes Yahoo Japan unique to other Yahoo properties worldwide is the fact that it is jointly owned by Yahoo and a Japanese company called Softbank; this might be the reason for its success in that market. Yahoo has around 56 percent market share in Japan, followed by Google's 31 percent.

In regards to social media usage in Japan, Facebook isn't doing so well; with around 1.5 million users Facebook is struggling to compete with the local social networks such as Mixi, which has around 10 percent market share with 13 million users.

Latin American Markets

Two countries stick out here: Brazil and Mexico. Brazil has close to 75 million Internet users or around 38 percent penetration. Google is the biggest by far with close to 100 percent market share. There, Bing and Yahoo hold some 1 percent each, not all stats agree on the exact numbers but all agree that Google is dominant.

Facebook is also struggling in Brazil with just over 8 million users, while Orkut leads the way in social media, claiming some 30 million visitors in July 2010.

Facebook is doing much better in Mexico with close to 50 percent of the total Internet population, or 15 million users. Mexico has around 27 percent Internet penetration, which translates to over 30 million Internet users.

What Does 2011 Hold for Multilingual Search Marketing?

It has never been easier to market to a foreign country; all you need is a credit card and Internet connection. For those that do not speak English, some of the services providers like Google and Facebook provide their user interfaces in most of the major languages worldwide, so setting up a campaign should be relatively easy.

If that is not enough, through my experience I have found that they are quite quick to response when a service request is sent for another language. For the others like Yandex in Russia, its service level has been going up over the past years as it realizes how important a foreign marketer is, and this has been the case with Baidu also.

The most likely items to have impact in 2011 are the further developments of Facebook and possibly the cooperation between Facebook and Bing as the latter adapts its algorithm to Facebook users. I also see some impact on search marketing from the fast expansion of mobile through Smart Phones and technologies like the Apple iPad, and now the Samsung Galaxy Tab using the Google Android operating system.

What is also clear is that the boundaries between who does what in the world of the Internet will be more blurred. Google has entered the operating system market and Microsoft is stepping up its search engine services -- everybody wants to have a stake in social.

From an advertiser's point of view it should be obvious where you put your marketing budget. In more and more countries Internet advertising is surpassing traditional media like TV, radio and print. In some of them, such as Denmark, this happened several years ago. The Canadian Interactive Advertising Bureau announced this last year, and the list grows.

Kristjan Mar Hauksson will speak during the Marketing to the European Union session on Day 2 of SES London.

Note: This article has been updated. An earlier version incorrectly characterized these statistics as the search market share.


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