One way an outsider could track the growth of search advertising around the globe is to examine the locations of industry conferences: Search Engine Strategies is regularly hosted in Toronto, Paris, London. In recent years Tokyo, Milan, Hamburg, and China were added to the roster. The newer Search Marketing Expo series has held events in London, Stockholm, Santiago and Buenos Aires, and has events scheduled in Munich, Madrid and Sydney. The continued frequency of U.S. events shows that many online marketers are still coming on board, but as the market matures in the U.S., online businesses are looking beyond U.S. borders.
Forrester estimates that 8% of 2007 total U.S. advertising revenues will come from online advertising, with search accounting for 43% of online ad spend. U.S. online spending is growing far faster than overall ad spending, and Forrester predicts that taking a closer look at global statistics shows where the additional opportunities lie in online advertising.
Global Advertising Statistics
2006 Total Ad Spend (m)
2007 Internet Users 15+
2006 Ad Spend - World Advertising Research Center
2007 Internet Users 15+ - Comscore
2007 Population - Wikipedia (UN and country estimates) http://en.wikipedia.org/wiki/List_of_countries_by_population
More than 40% of the population is online in the United Kingdom, France, and Germany and these countries also show high overall ad spending. European search marketplaces are by no means as mature as the U.S., but high Internet penetration makes entering these markets fairly easy.
While the U.S. is by far the global leader in total ad spending and sheer number of Internet users, it ranks third in population, after China and India. Even though these countries have much lower Internet penetration than the U.S. and Europe, their vast populations are coming online at a rapid rate. China has about half the number of Internet users as the U.S. (according to comScore), but 4.4 times the population. If 25 % of China's population used the Internet, they would outnumber the entire U.S. population. Yahoo's investment in Alibaba, Baidu's $13 billion valuation, and Ask.com's plans to enter China all speak to this massive growth potential.
South of the border, total ad spend and population of countries like Brazil and Mexico speak to the potential of the Latin American market. While less than 10% of the populations of most Latin American countries are online today, growth opportunities will abound as these audiences become more sophisticated.
It's time to put the Wild West analogy to rest in reference to search advertising in the U.S. The rest of the globe is open for exploration, and our accumulated industry knowledge and willingness to learn about new marketplaces will serve us well in the global frontier of search.