A recent research conducted by E-consultancy has projected that companies in the UK will hike their advertising spending (ad spend) on search engine marketing (SEM) by 24% to £2.75 billion in 2008. This research result comes at a time when there’s widespread concern over an overall slowdown in advertising due to recession-related worries.
Is AdSpend Growth Limited to SEM?
It’s not merely adspend on SEM that would rise this year. Are UK companies on a spending spree? At least this is what the E-consultancy research seems to indicate. According to the research, expenditure on pay per click (PPC) search is poised to rise by 23% to reach £2.24 billion. A closer scrutiny shows, however, that although expenditure on PPC will grow by double digits, this expected growth is lower than that recorded in previous years. This may be due to a weakening economy. On the other hand, the Search Engine Marketing Buyer’s Guide published by E-consultancy reveals that spending on search engine optimisation (SEO) would surge 32% to £330 million.
What are the Key Trends for the Current Year?
Now, this does not mean that companies in the UK are being extravagant. Increased spending is definitely being bounced off the results it produces. In fact, the research has indicated that companies have increased their scrutiny of the performance of search advertisements due to economic considerations and change in consumer behavior patterns. The latter is likely to pose a challenge for search marketers. The survey by E-consultancy reflects that search marketing will become more complex as the search market matures.
E-Consultancy Editor in Chief Comments on the Survey Results
Editor in Chief Chris Lake said that there were a number of reasons for the lower growth rate. The ad industry will be impacted by economic concerns and the search market is not insulated against a cut in company budgets, Mr. Lake added. Growth in return on investment is constrained by the fact that marketers and agencies are more savvy today than they have ever been. “Growth in consumer Internet usage is flattening out but the sector is certainly more robust than other media channels that have a less measurable return on investment, and should continue to grow for years to come,” the Editor in Chief explained.
