"In most cases, natural and paid search campaigns perform better together than they do separately," reports Oneupweb, an integrated online marketing company based in Traverse City, Mich. "Greater awareness of a Web site created by a paid ad can lead to more natural traffic. In similar fashion, people are logically more likely to click on a paid promotional ad of marketers they recognize, such as those they've encountered during a natural search."

A key reason that search strategies are evolving, says Tim Kauffold, Oneupweb's director of business development, is money. "One of the things that surprises marketers--particularly those who have been using the media for several years--is how the costs are rising. They think, 'Why doesn't the same dollar buy me the same volume it used to?' But there are really big inflation numbers with cost-per-click. It's still a great avenue, but as more folks jump in, costs are going higher."

As a result, marketers are now looking for ways to make sure their products and brands occur more frequently in natural searches, a process that can require a considerable investment in Web sites. Target, he says, is a company that has done especially well with this strategy.)

Still, he says, "this swing back to natural search optimization isn't easy, since so many people have gotten used to how measurable paid search is. Paid search is a media buy, and natural search optimization is an investment in the site itself, and that can take some time--maybe even a few months--to see results."

And search ads have always appealed to marketers because they're so easy to track. "Because it's much more measurable than traditional media, pay-per-click advertising is assessed and refined more easily. Ads are created faster and more inexpensively, and can respond to changing market conditions more quickly," he says. And the lower cost of search advertising, compared to other media, makes it an especially appealing way for companies to wade into new markets and product categories.

It's also clear, at least for the short term, that paid-search advertising will continue to grow, and grow quickly. For one thing, not only is Internet usage and penetration up, searching is America's favorite way to use the Internet. In December, reports comScore, Americans searched 9.6 billion times--up 15% from the previous year. Overall, there were 113 billion searches during 2007.

And while a slowing of growth is inevitable, he says, he expects that the increased use of mobile computing devices will drive growth in the short term. "The business traveler, with the Treo and the BlackBerry, has been a factor for years. But now, the iPhone, and Google's Android--whenever that gets going--will all push the Web to more mobile searchers, who don't have to be sitting at their computers to hunt for things."

Currently, search advertising accounts for 48% of all Internet advertising, he says. (Emarketer estimates that in 2008, U.S. online ad spending will reach $27.5 billion.)

Google continues to be "the 500-pound gorilla," the report says, with 66% of the global search market. Yahoo is next, with 21% share of the market, followed by Microsoft, with just over 5%.

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