Search Engine Marketing to soar by a third in 2005
4 May 2005
Search engine marketing will grow by 33 percent in 2005, reaching $11.6 billion by 2010, according to Forrester Research.
In its Online Marketing Forecast 2005-2010, the company also predicts that display advertising, which includes traditional banners and sponsorships, will grow at the average rate of 11 per cent over the next five years to $8 billion by 2010.
The Forrester study forecasts that total US online advertising and marketing spending will soar by 23 per cent in 2005, compared with last year, to $14.7 billion.
Of those marketers surveyed by for the forecast, 64 per cent said they were interested in advertising on blogs, 57 per cent through RSS and 52 per cent on mobile devices, including phones and PDAs.
Respondents also felt that online advertising channels, such as search engine marketing, online display ads, and email marketing will continue to become more effective relative to traditional channels.
More than three-quarters (84 per cent) of marketers said they planned to increase their US online ad budget in 2005, while almost half plan to decrease spending in traditional advertising channels like magazines, direct mail, and newspapers this year.
Forrester believes that online marketing and advertising will represent eight per cent of total advertising spending in 2010, challenging ad spending on cable/satellite TV and radio.
"Despite significant changes in consumer behaviour, there is a large disparity between the amount of time consumers are spending online and the money marketers are spending trying to reach them online," said Forrester Research principal analyst Charlene Li. "When at-work internet use is taken into consideration, online consumers spend more than one-third of their time online - roughly the same amount of time they spend watching TV. Yet marketers spend only four per cent of ad budgets online versus 25 per cent on TV."
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