Search engine marketing (SEM) remains one of the most fiercely contested and fastest growing segments of the online marketing world. eMarketer estimates that more than $8,6-billion was spent on search engine advertising in 2007 in the US alone, up from only $300-million in 2001.
The Market Researcher projects that the US search market will be worth about $16,6-billion by 2011. Google collected an estimated 75% of paid search advertising in the US in 2007 as the dominant player in this space, while second-placed Yahoo! managed to scrape together a meagre 9% share of the revenues.
Jacqui Boyd, online media planning director at Acceleration Media, comments that, closer to home, Google's decision to open a country office in South Africa is a massive vote of confidence in the potential of the local search market.
"To date, South African marketers have focused their online efforts on banner advertising, but there's reason to believe that our search market is set for explosive growth in 2008 as marketers begin to come to grips with the benefits SEM offers," she says.
"Put simply, SEM means that your ads are generally reaching users who are already interested in the products and services you have to offer. It gives you real time insight into the success of your campaign and the flexibility to adjust your keywords and messaging depending on the response you get from your audience. These benefits are becoming increasingly hard to ignore."
One of the largest advantages for South African businesses is the relatively low cost per click that search offers, making it a compelling option for small businesses that don't have a huge amount of budget to spend. A small B&B in Cape Town can, for example, position itself to international tourists for the FIFA World Cup in 2010 through the clever use of keywords.
"Marketers are also beginning to look at SEM (and organic search) as part of the bigger picture," says Boyd. "Search doesn't act in isolation: if you've run a successful online or offline advertising campaign, you will probably see a spike in searches for your company, its product, or its slogans and catchphrases.
"Companies that understand how search interacts with other elements of their marketing strategy can use their insight to drive great results."
The future for search looks even more exciting, she adds.
"New avenues are continually opening up in the search space, including personalised search, social search and mobile search. Each of these areas are relatively new (especially to the South African market), and show that search is likely to continue to grow and evolve for years to come.
"Big online players, including Google and Microsoft, have flagged online search as an important growth market. There's also growing interest in personalised search – using IP address, Web history, and other personal data the user has given the search engine – to deliver even more relevant targeting."
Of course, the growth of the market has brought some challenges along with it, Boyd says. The surge of interest in SEM from companies around the world, large and small alike, means that the costs of securing prime keywords is climbing as a result of growing demand.
"One can be sure, however, that this rise in demand will create more competition in the market. Although Google dominates the market, there are a range of other choices, including niche and local (South African search engines) that can deliver excellent results at a low cost.
"What has become clear, from some of South Africa's early search success stories and from the massive growth in SEM around the world, is that search is a tool that no marketer can afford to ignore any longer. SEM is a vital component of any balanced online marketing strategy."