Online Advertising Heats Up

By Exclusive Concepts Blog Team

Spending on internet advertising grew dramatically over the last year and is expected to increase even further. Analysts see it as a “second major wave of interest??? following the first surge in online advertising in the late 1990’s leading up to the dot-com crash. While the first wave was dominated by banner advertising and e-mail marketing, this new wave is led by search:

search engine placement, keyword search marketing and related forms of online advertising are driving the growth, according to the IAB [Interactive Advertising Bureau]. Though its most recent report did not include a breakdown by category, in September, the group said search made up 40 percent of all online ad revenues, display ads 20 percent and rich media just 8 percent during the first half of 2005. (eCommerce Times)

The growing belief in the power of search marketing is apparent in the growing competition among keyword bidders:

Cost per click rose from $27 on average in July to $30 in September, according to Performics’ Third Quarter Search Trend Report, which tracks search marketing campaigns. In addition, cost per keyword increased from $20 to $26 from July to September because of the “natural growth of search,” said Cam Balzer, director of search strategy at Performics. “Campaigns are getting bigger and growing across the board.” (DMNews)

DMNews also points out that changes in Google’s ranking system has made it more difficult for one advertiser to maintain the top position on a given search consistently.

Advertisers’ willingess to spend more on search engine marketing makes sense in light of a recent study that showed that search engine use is becoming a daily habit for more and more internet users.

About 60 million adults, approximately 41 percent of the Internet-using population, use search engines on a typical day (Sci-Tech Today)

This means that search engine use is gaining ground on e-mail to be the most popular daily online activity.