Search Marketing Topping Out

Has search marketing reached maximum market size? $7 billion? Has the market run out of advertising space?

Nicholas Carr quotes from a McKinsley report (registration required):

“Annual growth in the overall number of searches is slowing, from 30 percent in 2004 to 20 percent in 2005. Without significant changes in consumer click-through rates or in the prices advertisers are willing to pay, we estimate … that the maximum current value of paid-search advertising is about $7 billion [while] advertisers will want to spend $9 billion to $12 billion on paid search in 2007.”

Or will advertisers look further down the tail for advertising opportunities?

The problem is that it is difficult to amalgamate small publishers and create substantial advertiser value. Google effectively monetarise their SERPs with Adsense, but as we’ve seen, many advertisers are reluctant to bid high on the content network due to lower perceived value of that space. If search volumes are tappering off, and Adsense take-up remains the same, or falls, then it is difficult to see where the extra capacity will come from.

The big, quality sites with large user bases just got that much more valuable…


  1. King CobraKing Cobra09-01-2008

    As long as there are more web users and more web sites then this will continue to grow.

    Ken
    King Cobra Poker

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