UK firms spend £2.75billion on search

Companies in the UK will spend £2.75 billion on search engine marketing in 2008, according to research from E-consultancy. Despite fears about an overall advertising downturn as part of a wider recession, the UK search market remains buoyant and E-consultancy forecasts that growth will be around 24% for the calendar year of 2008, up from £2.22 billion in 2007. E-consultancy estimates that paid search spending will reach £2.42 billion, up 23% from the previous year. Google generates 99% of its revenue from this kind of advertising (typically these ads are placed on the top and the right of the search results page). Meanwhile, the market for search engine optimisation (SEO) will increase 32% to £330 million. SEO agencies help companies achieve prominent results in Google, Yahoo and MSN without buying advertising (typically these results appear on the left of the page). The valuation reflects the total amount of money that is spent on Search Engine Marketing in the UK, including media spend and money spent on agency services such as paid search management and SEO. E-consultancy editor in chief Chris Lake said: "Search spending is continuing to increase at a healthy pace, although the growth rate will not match the increases seen over the last few years. "There are various reasons for the lower growth rate. Economic concerns will affect the overall ad industry, and search isn't entirely immune from a dip in budgets. Marketers and agencies are savvier than ever, so scope for growth in ROI is limited. And growth in consumer internet usage is flattening out. But the sector is certainly more robust than other media channels that have a less measurable return on investment, and should continue to grow for years to come." The outlook for search engine marketing is very strong. According to a survey of search marketers carried out by E-consultancy and Guava in February and March 2008, 63% of companies were planning to increase their paid search budget in the subsequent twelve months, and 61% were planning to increase their SEO budget. Key market trends in 2008
  • Economic worries increase scrutiny on search ad performance
  • New patterns of consumer behaviour challenge search marketers
  • Complexity of search marketing increases as sector matures
  • Google continues to dominate industry
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