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SES Chicago Highlights: Search Industry Update

Posted on 12.07.2008

The Search Engine Strategies session "Search Industry Update" was an informative session, especially if you need to convince those holding on to the marketing purse strings on how big the effort needs to be.

Search marketing is the largest online ad format - hands down. In fact, paid search accounts for nearly 45% of the global online ad spend - remaining one of the fastest growing online ad formats. The panel focused on trends in search marketing, growth drives, search spending and CPC trends, search penetration and overall adoption.

The following are highlights from the individual speakers:

First up was Roger Barnette from Search Ignite:

  • Search market share is stable; Google leads the way, followed by Yahoo and Microsoft
  • Big (seasonal) spend comes in the fourth quarter
  • The economy did not affect third-quarter spend
  • All engines have seen increases in impressions (especially Yahoo)
  • A mid Q4 report reveals a lower average order value, that conversion rate was holding steady and that spend is up (33%). This is not uncommon year-over-year (considering the holiday season) but it remains impressive.
  • Search is the best channel, and it's still profitable.
  • Advice: Monitor first quarter closely.

Next up was Heather Dougherty from Hitwise:

  • Google search engine share is at 72% (even more pronounced internationally, but 96% are return visits
  • Google share has accelerated the past five months
  • Branded search terms account for 88% of US queries at Google
  • Navigational queries are increasing (,
  • The conversation is shifting to social networks; 65% increase, 3-fold increase in the past three years, e.g. 4% of searches for "virgin mobile" went to social networks
  • Regarding paid search effectiveness, generic search terms receive the highest share of paid search, which is driving up keyword costs.

Rafeal Zarilla of was next:

  • According to a McKinsey report, 91% are using online advertising, 50% plan to maintain or exceed spend
  • It's not only about numbers, but people too. "There is a social science behind what we do."
  • It's important to stay in front of consumer trends and use all available tools
  • Search is not part of a vacuum, but rather part of an ecosystem. As such, use search combined with display, as you'll get a profoundly better return (citing a Yahoo! Research report from Dec. 2006).
  • The term du jour is "engagement mapping," that is, looking at everything within the purchase funnel to determine overall effectiveness.

Jon Stewart of Nielsen Online completed the session:

  • 85% of people are online (not including China), accessing 42 billion search pages
  • France is growing fast (76% year-over-year growth), as is Spain (28% year-over-year growth)
  • Searches are not loyal; 42% use Google exclusively, 10% use Yahoo exclusively and 2% use MSN only.
  • Heavy searcheres are even less faithful (no definition of how big the heavy searcher population actually is)
  • Finance and retail are seeing lower impressions
  • Marketers should look at organic search and social networks as prime branding opportunities.
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