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SEM Industry Exceeded 2007 Projections as SEMs Look to Video, Mobile

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The SEMPO 2007 State of the Market Survey Results are in, and the data shows robust growth in the North American SEM industry year. Spending reached $12.2 billion in 2007, exceeding projections of $11.5 billion. In 2006, the spend came in at $9.4 billion. As a result, the projection for 2011 is now at $25.2 billion, up from the $18.6 billion projection set a year ago.

Now that marketers are getting the hang of traditional search, many are looking to new channels, including video and mobile. 43% of participants are interested in contextually targeted advertising attached to video search results, while 40% are interested in mobile search. But most respondents said pricing would need to be the same as or less than it is for traditional search advertising.

Pricing was also an issue in paid search. About three quarters of those surveyed could afford a price increase, but it would need to be an increase of 30% or less.

Other stats from the survey include:

  • Marketers found more search dollars by grabbing from print magazine, website development, direct mail and other marketing budgets.
  • Organic SEO's popularity was up to 89% in 2007, from 80% in 2005 and 76% in 2006. Agency respondents offering organic SEO rose to 91% in 2007, up from 80% in 2005 and 87% in 2006.
  • 4 out of 5 respondents would increase their budget in order to add behavioral targeting to their pay-per-click campaigns.
  • 57% of online advertisers would spend an average of 11% more on demographic targeting, such as age and gender.

The numbers are on par with revenues posted by the search engines. Earlier this year, Google beat analysts estimates by posting strong Q1 2008 revenues, despite data indicating a slowdown in paid search growth. Yahoo and Microsoft also held steady financially despite declining search shares and the acquisition drama.

What do you think about this data? Are you looking to video and mobile? Let us know in the comments.


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