Search Reaches $33 Billion In 2016, But Loses Market Share

ClimberMarketers buying media now have a greater number of options from which to choose. Search will continue to dominate -- taking the largest piece of the interactive pie, growing from more than $18 billion in 2011 to more than $33 billion during the next five years -- but it will lose share from 55% today to 44% of all interactive spend in 2016, according to a Forrester Research study.

The report, "U.S. Interactive Marketing Forecasts, 2011 to 2016," reveals that marketers' search budgets will move to mobile and social networks as consumers rely more on non-PC search engines and devices for finding stuff. The study notes that performance marketing agency Performics finds 1.7% of all paid-search impressions already come from tablets.

Investment in paid-search, search engine optimization agency fees, and SEO technology -- a new category in this year's Forrester forecast -- will have a 12% compound annual growth rate (CAGR).

The report also describes "display-like ad formats embedded into search results." For example, advertisers can sponsor terms in Yahoo's new Search Direct feature with images or brand logos. Forrester Analyst Shar VanBoskirk believes it will "provoke advertisers to give search brand dollars, formerly earmarked for offline or display media," to search. "And it will keep advertisers currently outbid on standard sponsored links from defecting to display," she writes.

When marketers were asked whether they believe the effectiveness of SEO will increase or stay the same during the next three years -- or decrease as compared with today -- 40% said it will increase; 54% said it will stay the same; 4% said it will decrease; and 2%, not applicable. These findings from the December 2010 U.S. Interactive Executive Online Survey also asked marketers the same question for paid search. The results reveal that 30% of marketers said the effectiveness would increase; 57% said it would stay the same; 9% said it would decrease; and 4%, not applicable.

Tags: ppc, search, seo
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