eMarketer

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eMarketer
Trends, Prospects Opportunities in Search
Search Engine Marketing Trends, Prospects
Opportunities
SEMPO Member Meeting March 3, 2004
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US online ad spending, by quarter (in billions)
Trough of Disillusionment
Source IAB/PwC, 2003
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the BUBBLE burst
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What went wrong?

• The ECONOMY fell apart
• Advertisers lost faith that online advertising
  works
• No proof of Return on Investment
• The Internet did not live up to its promise of
  being the most measurable of all media

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Online ad spending in 2003, vs. 2002
20
7.2 B
6.0 B
2002
2003
Source eMarketer, 2003 IAB/PwC, 2002
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Online ad spending growth in 2004?
8.1 billion!
Source eMarketer, 2004
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After Wave of Disappointments, The Web Lures Back
Advertisers
Why the growth???
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Super-Search!
Its direct marketing on steroids! --Cheryle
Pingel, Range Online Media
Paid search is the new gold! --Gary Stein,
Jupiter Research
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U.S. Paid Search advertising spending (in
millions)
31.5
15 of total
Source eMarketer, 2003 Interactive Advertising
Bureau/PricewaterhouseCoopers, 2003
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Without Search, online advertising would have
decreased in 2003!
Total
Search
Non-Search
7,200.0 2,268.0 4,932.0
2003
6,000.0 927.4 5,072.6
2002
20
145
(2.8)
Source eMarketer, 2004 IAB/PwC, 2003
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Paid search revenues (in billions)
2003
2004
27
2.8 eMarketer
2.2 eMarketer
2.8 Forrester
1.7 Forrester
2.1 Jupiter
1.6 Jupiter
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Paid search revenues (in billions)
7.0 in 07 Piper Jaffray
2003
2004
2005
2006
5.0 Meta Group Morgan Stanley
4.0 Deutsche Bank
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3.2 eMarketer
2.8 eMarketer
3.1 Jupiter
2.2 eMarketer
Why is search so HOT?!?
2.8 Forrester
2.6 Jupiter
1.7 Forrester
2.1 Jupiter
1.6 Jupiter
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Recognizes that the Internet user is in control.
Search
Delivers the specific, relevant information
theyre looking for just when they need it.
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The Internet is unique since it can impact every
stage of the consumer buying cycle
Awareness/Branding
Customer Relationship Management
INTERNET
Attitudes, Interest
Post-sales support
Pre-purchase Information Gathering
Fulfillment
Sale/Purchase
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US marketers who believe sponsored search
marketing offers better ROI than
Source comScore Networks, Interactive
Advertising Bureau, July 2003
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Top 10 Reasons for Search Marketing
Growth
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10. The ECONOMY is growing U.S. Real GDP Growth
It should be a very good year --Mark Zandi,
Economy.com
Source EIU (1999 2001) Economy.com (2002
2004)
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9. Search will attract more B2B advertisers to
online marketing
B2B 13
B2B 16
Source eMarketer, 2004
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Top 10 Reasons

• 8. Search is expanding to include multi-media
  and graphics, as well as text content
• Over 1/3 of users now access streaming audio or
  video content
• 7. Search will get smarter
• Natural language search, personalization,
  behavioral modeling, collaborative filtering, etc.

Search will know who you are, and what you like
and want!
Source Arbitron/Edison Media Research, Sept,
2003
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(No Transcript)
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6. Search will expand through contextual
advertising
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5. Search will grow faster outside U.S. market.
(Non-U.S. Paid Search Dollars)
Compound Annual growth of 20
1.9 B (27 of Total)
0.2 B
2002
2007
Source US Bancorp Piper Jaffray, March 2003
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4. The number of online shoppers and buyers
continues to grow (annual figures)
2003
2004
2005
101.7 108.4 121.1
Shoppers
81.2 86.5 94.9
Buyers
1,069
1,404
/Buyer
Source eMarketer, 2004
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Piper Jaffray About 35 of searches
are commercial
21 explicitly for commercial
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3. The number of searchers, and usage of search,
will continue to grow
148 Million Active Internet Users
114.5 Million Searchers (77)
gtConduct 28 searches per month
Source eMarketer, 2004 (Internet users)
Nieslen//NetRatings, 2004 ( searchers) 3)
comScore, 2004 (avg of searches)
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2. Search will go LOCAL!
46 of total spending
3 of total spending
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Are Yellow Pages vulnerable to search?
14.3 B

• Internet and Yellow Page users are similar
  demographically
• While 7 of all searches are local, among online
  buyers (86 million), 25.1 of their commercial
  searches are local in nature

2.2B
Source Kelsey Group, 2003 comScore Networks,
March, 2004
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Search
Printed Yellow Pages
of Pop 75 47 Using (1), (2)
Avg Freq. 5.6/month 28/month of usage (1),
(3)
of Uses 80 ??? Leading to (21 are
commercial) a Sale (1)
Source 1) Kelsey Group, 2003 2) eMarketer,
2004 3) comScore, 2003
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Local approaching a 100 billion market
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1. Search marketing will get more sophisticated!

• According to Jupiter, 50 of large marketers, and
  34 of smaller ones, had difficulties managing
  their key word buys
• In response, 48 of large marketers and 23 of
  smaller firms turned to search engine marketing
  vendors to manage their campaigns

Most marketers feel overwhelmed by the number of
options. --Nate Elliott, Jupiter Research
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Not at All 31
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Final Stats of the Day
10 Discount
12 minutes 30 slides
Search Engine Marketing Trends, Prospects
Opportunities
30,000 charts ( 0.1 of info)