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E marketer SEM Document Transcript

  • 1. January 2008 Search Engine Marketing: User and Spending Trends David Hallerman, Senior Analyst dhallerman@emarketer.comExecutive Summary: Search marketing depends critically on its audience—where people are clicking, money willfollow. That is why search engines compete for the user’s goodwill, whether it be with more relevant and completesearch results, add-ons for daily living such as e-mail or, as in early December 2007 with Ask.com’s AskEraser option,by giving the user easy-to-use tools to protect his or her privacy. 088301 The competition takes on even fiercer overtones because oneUS Online Advertising Spending, by Format, 2006-2011(millions) company, Google, dominates the market. It draws far more 2006 2007 2008 2009 2010 2011 search users and search requests—and therefore search adSearch $6,799 $8,624 $11,000 $12,935 $14,906 $16,590 revenues—than all its rivals put together. An eMarketerDisplay ads $3,685 $4,687 $5,913 $6,663 $7,500 $8,190 estimate shows Google raking in 75% of US paid searchClassified $3,059 $3,638 $4,675 $5,493 $6,281 $6,930 advertising in 2007, up from 60% in 2006. With No. 2 Yahoo!Rich media/video $1,192 $1,755 $2,613 $3,575 $4,463 $5,481 collecting a mere 9% share, the rest split 16% of the pie.Lead generation* $1,310 $1,733 $2,269 $2,795 $3,281 $3,675 But with over $8.6 billion going to search engine advertising inE-Mail $338 $428 $481 $553 $600 $630Sponsorships $496 $535 $550 $488 $469 $504 2007, that 16% stake equals nearly $1.4 billion. And with searchTotal $16,879 $21,400 $27,500 $32,500 $37,500 $42,000 spending nearly doubling to almost $16.6 billion in 2011—andNote: eMarketer benchmarks its US online advertising spending still the biggest form of online advertising—even relativelyprojections against the Interactive Advertising Bureau small slices can represent significant revenues.(IAB)/PricewaterhouseCoopers (PwC) data, for which the last full yearmeasured was 2006; online ad data includes categories as defined byIAB/PwC benchmark—display ads (such as banners), search ads (includingpaid listings, contextual text links and paid inclusion), rich media (including Key Questionsvideo), classified ads, sponsorships, referrals (lead generation) and e-mail ■ What factors contribute most to search marketing spending?(embedded ads only); excludes mobile ad spending; *also called referralsSource: eMarketer, October 2007088301 www.eMarketer.com ■ Why will emphasis on search engine optimization increase in the next few years? ■ How can marketers better understand the search audience? The eMarketer View 2 Search Ad Spending 4 ■ What do people think about search engine results? Comparative Estimates: Search Marketing 6 ■ In what ways do search and privacy intersect? How does that Search Spending by Type 8 affect marketers? People Who Search 10 Related Information and Links 32 About eMarketer 32 The First Place to Look Copyright ©2008 eMarketer, Inc. All rights reserved.
  • 2. The eMarketer View Key eMarketer Numbers—Search Engine Marketing Also contributing to search spending growth are brand marketers and the relationship consumers have with brands. When an offline $16.6 billion US search advertising spending in 2011, up from $6.8 billion in 2006 ad campaign drives awareness, even if only partially, many people 11.3% US search advertising spending growth in 2011, tend to search online to find out more about the product or service. down from 32.2% in 2006 Therefore, brand marketers need to factor search advertising into $21.5 billion US search engine marketing spending in 2011, up from $8.2 billion in 2006 their overall campaigns to support efforts in other media. $4.9 billion US search engine optimization (SEO) spending in 2011, up from $1.4 billion in 2006 Besides advertising, the other side of search 180.0 million US search engine users in 2011, up from 147.0 marketing is search engine optimization (SEO), the million in 2006 process of modifying a Web site so that it ranks higher in the 85.2% US search engine users as a percent of total organic listings relative to relevant keywords. eMarketer estimates Internet users in 2011, up from 80.8% in 2006 that in 2007 paid search ads alone contributed 62% to all of search Note: eMarketer benchmarks its US online advertising spending projections against the Interactive Advertising Bureau (IAB)/ engine marketing spending, with SEO spending contributing about PricewaterhouseCoopers (PwC) data, for which the last full year 18% to the pie. By 2011, a greater focus on SEO will give it a nearly measured was 2006; search advertising includes paid listings for search engine results (also called "paid placement"), contextual text links that 23% share, while paid search spending will fall back to not quite appear alongside content on third-party publisher sites and paid inclusion for guaranteeing that a marketers URL is indexed by a search 57% of the total. engine; search engine marketing includes both advertising and non- advertising (non-media buy) components; the main search marketing Further, SEO tends to be less expensive than paid search. component is search engine optimization (SEO), which includes those techniques used to create better placement in the natural, or organic, Therefore, even small boosts in SEO spending relative to paid search results; search engine users defined as ages 3+; based on usage anytime during the year from all locations search can indicate larger changes in marketing effectiveness Source: eMarketer, January 2008 than might be indicated by dollars alone.090505The spectacular gains for US search advertising spending over 10 Behind that spending shift is the recognition that, even thoughyears, rising from less than $300 million in 2001 to almost $16.6 many people are willing to click on relevant paid search ads, theybillion in 2011, represent a rare phenomenon in marketing— prefer organic listings. One survey of online retailers found 46% ofnamely, that of considerable customer satisfaction. Generally, respondents saying SEO performed best, compared with 37% whoInternet users see paid search and contextual advertising as preferred the performance of pay-per-click ads.sufficiently relevant and non-intrusive. That approval, or at least In addition, as brand advertisers increasingly make search a centraltolerance, is why so many people click on these ads and why component of their online campaigns, the need to see thoseadvertisers increasingly spend to woo their clicks. brands with top natural rankings becomes ever more urgent.Search marketing is all about consumers. And where they go the What do people think about search engine results?money follows. Search marketing can be likened to the Zen parable Surprisingly, it does not vary much depending on the degree ofabout the tree falling in the forest: If no one hears it, does it make a search usage, according to a Forrester Research study. Forsound? In the same fashion, if a search engine serves up a text-link example, 59% of all respondents did not pay attention to paidad and no one clicks on it, does it still make someone money? search ads. Further, 36% did not trust search engine ads. ThatThe central position of the search audience in monetizing search underscores the importance of increased SEO spending, whichmarketing means that the search engines and the advertisers spreads the marketing message through non-ad-based listings.both rely on the user’s goodwill. When viewed by the audience marketers look toAnother factor supporting search ad spending is reach, the 40% share of total online advertisingwhat happens after the click. Since advertisers can more dollars going to paid search can appear outlandish.readily track the results of a search marketing campaign than one In fact, relative to the time people spend using search engines,using online display advertising, search can become self- companies pour disproportionate sums into paid search adssupporting, especially for retailers, with the cost of each click compared to display ads on content sites.translating to cost-plus-X dollars in sales. According to ongoing research from the Online Publishers Association (OPA) and Nielsen//NetRatings, US Internet users in 2007 spent less than 5% of their online time using search versus nearly 50% of their time on content sites. And yet paid search advertisers spend $5.07 per hour of consumer search usage compared with only 49 cents spent for display advertising relative to each hour users spend on content sites. Search Engine Marketing 2
  • 3. The eMarketer ViewOf course, when search is effective, people find what they need Depending on who you ask, Americans conductand go away, and that greatly reduces the time spent on a site. But between 50% (comScore) and 68% (Compete) ofwhen content is effective, people want to stick around. their searches on Google, with figures from Hitwise andNevertheless, a 10-1 ratio between search and display dollars Nielsen falling in between. Does Google’s dominance here implypoints to the weight of Internet search engine users in contrast to that marketers should follow the audience by placing most of theirthe brief time they spend searching. paid search ad dollars on the search giant? Not necessarily so.Keeping the customer satisfied will keep the search Google’s greater popularity among the search audience isdollars flowing. Increasingly, consumer satisfaction with matched by its popularity among marketers. That causes mostsearch—and usage of the data created each time consumers search keywords to get, by auction, higher per-click prices than atenter a search term—counts privacy as a valuable asset. The the other search engines. Therefore, just to be effective, a search“Digital Footprints” report, released in December 2007 by the Pew marketing campaign needs to consider how spreading its adInternet & American Life Project, showed that 39% of Internet budget among several search engines might give it greater reachusers expressed concern about how much information about at the same time, or perhaps even at a lower cost.them was available online. However, only 21% of that segmentalso took steps to limit the amount of information available. Alltold, 57% of Pew respondents either had some worry aboutpersonal data, took steps to limit what was available, or both. Thisis the online population addressed by efforts such as Ask.com’sAskEraser option.Or, to view the same data another way, 60% of Internet users werenot worried about how much information was available aboutthem online, and a similar 61% did not bother to limit the amountof information that could be found about them online. This is theonline population that might continue to be satisfied with Googleor Microsoft, both of which hold on to search data for months.Still, data-privacy practices vary significantly at the five largestsearch engine companies (as shown in the chart from CNET’sNews.com). Combine that with political concerns about howsearch engines use consumer data—as raised in congressionalinquiries about the DoubleClick purchase—and AskEraser’sconsumer-privacy controls will be just the tip of the iceberg.Data Privacy Practices at the Five Largest SearchEngine Companies, December 2007 (% ofrespondents) Time Data User Behavioral Give data deleted info targeting users retained or linked? (BT)? ability to anonymized? opt-out of BT?Ask Hours Deleted No No -AOL 13 months Deleted No Yes YesGoogle 18 months Partially No No - anonymizedMicrosoft 18 months Deleted Yes Yes No*Yahoo! 13 months Partially Yes Yes No anonymizedNote: *can opt-out of behavioral targeting on third-party sites but not onMSN.comSource: CNET News.com as cited in press release, December 12, 2007090739 www.eMarketer.com090739 Search Engine Marketing 3
  • 4. The eMarketer View Search Ad SpendingThe Four Elements of Search Marketing The gains for US search advertising spending thisThe umbrella term “search engine marketing” covers four decade are stunning, soaring from a mere $299related but distinct kinds of marketing. million in 2001 to nearly $6.8 billion only five yearsPaid search advertising. These ads appear on search later in 2006. Projecting out five years after that,engine results alongside natural, or organic, listings whenInternet users enter search queries. Typical paid search to 2011, all signs indicate even larger growth,ads are labeled “sponsored links” (Google) or “sponsor rising to not quite $16.6 billion—nearly $10 billionresults” (Yahoo!) or “sponsored sites” (MSN) or more in that relatively brief timespan.“sponsored results” (Ask). This search format representsthe largest spending share of search engine marketing. Behind this gold rush is a rare phenomenon in marketing—Contextual advertising. These ads appear alongside namely, that of considerable customer satisfaction. Generally,related content on third-party publisher sites. Google is Internet users see paid search and contextual advertising asthe largest seller of these text-link ads with its AdSense relevant enough and non-intrusive. That acceptance is why peopleprogram. Yahoo! and MSN compete with their click on these ads and why advertisers increasingly spend to wooContentMatch and Content Ads programs, respectively, their clicks.while AOL’s recent purchase of Quigo puts it squarely in Another factor supporting search ad spending is what happensthe contextual-ad game, too. While not necessarily after the click. Since advertisers can more readily track the resultsinitiated by search queries, contextual advertising is of a search marketing campaign than one using online displaytypically tabulated as part of search engine marketing. advertising, search can become self-supporting, especially forThere are three key reasons for that. One, the vast retailers, with the cost of each click translating to cost-plus-Xmajority of contextual ads are sold by search engines; dollars in sales.two, these text-link ads are typically priced and placed byadvertiser bids; and, three, unless a user clicks on acontextual ad, no money exchanges hands.Paid inclusion. This search marketing procedure consistsof two main elements. One guarantees that a marketer’sURL is indexed by a search engine. The listing isdetermined by the engine’s search algorithms. The other,as defined by Forrester Research, is “the amount spent onsubmitting pages to paid directories (like Froogle orYahoo! Shopping) for cataloging.”Search engine optimization (SEO). With this type ofmarketing, companies and their search agencies usevarious techniques to create better placement for theirWeb site and specific pages in the natural, or organic,search results. The best analogy to differentiate paidsearch ads from SEO is the difference between a mediabuy and public relations. And, as with most other forms ofadvertising, a paid search ad can have immediate results,while SEO typically takes months to bear fruit—if it evendoes—just as with most PR campaigns. Search Engine Marketing 4
  • 5. Search Ad SpendingOther contributors to search spending growth are brand US Search Advertising Spending Growth, 2001-2011 (%marketers and the relationship consumers have with brands. change)When an offline ad campaign drives awareness, even if only 2001 175.3%partially, many people tend to search online to find out more aboutthe product or service. Therefore, brand marketers need to factor 2002 210.5%search advertising into their overall campaigns to support efforts 2003 174.3%in other media. Even if a user does not click on an ad, his or her 2004 51.4%seeing the ad is basically a free impression for the advertiser. 2005 33.5% 2006 32.2%US Search Advertising Spending, 2001-2011 (millions) 2007 26.8% 2001 $299 2008 27.5% 2002 $927 2009 17.6%2003 $2,543 2010 15.2%2004 $3,850 2011 11.3%2005 $5,142 Note: eMarketer benchmarks its US online advertising spending2006 $6,799 projections against the Interactive Advertising Bureau (IAB)/PricewaterhouseCoopers (PwC) data, for which the last full year2007 $8,624 measured was 2006; search advertising includes paid listings for search engine results (also called "paid placement"), contextual text links that2008 $11,000 appear alongside content on third-party publisher sites and paid inclusion for guaranteeing that a marketers URL is indexed by a search engine2009 $12,935 Source: eMarketer, January 2008 090472 www.eMarketer.com2010 $14,906 0904722011 $16,590 Paid search reached a 40% share of total US Internet ad spendingNote: eMarketer benchmarks its US online advertising spending in 2004. Since then, and going forward, online advertisers haveprojections against the Interactive Advertising Bureau(IAB)/PricewaterhouseCoopers (PwC) data, for which the last full year and will put about the same percentage into search.measured was 2006; search advertising includes paid listings for searchengine results (also called "paid placement"), contextual text links thatappear alongside content on third-party publisher sites and paid inclusion US Search Advertising Spending, 2001-2011 (% of totalfor guaranteeing that a marketers URL is indexed by a search engine online ad spending)Source: eMarketer, January 2008090470 www.eMarketer.com 2001 4.2%090470 2002 15.4%As vast as search advertising spending might be, its growth is 2003 35.0%leveling off. After a 27.5% increase in 2008, annual growth willsubside to around 10% by early next decade. The declining growth 2004 40.0%is due to several factors. One is the vast size of the US search 2005 41.0%market, in which even large dollar gains equate to smaller 2006 40.3%percentage gains. The other is the economic slowdown, which 2007 40.3%over time will reduce shopping—both for homes and smaller 2008 40.0%items—and therefore people will search and click less. 2009 39.8% 2010 39.8% 2011 39.5% Note: eMarketer benchmarks its US online advertising spending projections against the Interactive Advertising Bureau (IAB)/PricewaterhouseCoopers (PwC) data, for which the last full year measured was 2006; search advertising includes paid listings for search engine results (also called "paid placement"), contextual text links that appear alongside content on third-party publisher sites and paid inclusion for guaranteeing that a marketers URL is indexed by a search engine Source: eMarketer, January 2008 090478 www.eMarketer.com 090478 Search Engine Marketing 5
  • 6. Search Ad Spending Comparative Estimates: Search MarketingTo put that 40% share into context, note how no other online adformat contributes much more than half that amount. Estimates for search advertising range widely. InUS Online Advertising Spending, by Format, 2006-2011 2008, for example, Forrester Research is at the(% of total online ad spending and billions) low end (at $7.72 billion) and Piper Jaffray at the 2006 2007 2008 2009 2010 2011Search 40.3% 40.3% 40.0% 39.8% 39.8% 39.5% high end (at $15.50 billion). One reason for thisDisplay ads 21.8% 21.9% 21.5% 20.5% 20.0% 19.5% divergence comes from how search advertising isClassified 18.1% 17.0% 17.0% 16.9% 16.8% 16.5%Rich media/video 7.1% 8.2% 9.5% 11.0% 11.9% 13.1% defined and what elements get included. ForLead generation* 7.8% 8.15 8.3% 8.6% 8.8% 8.8% example, some, such as Forrester, count SEO inE-Mail 2.0% 2.0% 1.8% 1.7% 1.6% 1.5%Sponsorships 2.9% 2.5% 2.0% 1.5% 1.3% 1.2% their total search estimates.Total $16.9 $21.4 $27.5 $32.5 $37.5 $42.0Note: eMarketer benchmarks its US online advertising spending Although SEO is essential for search marketing, it is not a mediaprojections against the Interactive Advertising Bureau buy, and therefore eMarketer does not regard SEO spending as ad(IAB)/PricewaterhouseCoopers (PwC) data, for which the last full yearmeasured was 2006; online ad data includes categories as defined by spend. In these search advertising comparative estimates, suchIAB/PwC benchmark—display ads (such as banners), search ads (includingpaid listings, contextual text links and paid inclusion), rich media (including spending has been subtracted, where appropriate, to bettervideo), classified ads, sponsorships, referrals (lead generation) and e-mail compare apples to apples.(embedded ads only); excludes mobile ad spending; *also called referralsSource: eMarketer, October 2007088422 www.eMarketer.com Comparative Estimates: US Search Advertising088422 Spending, 2006-2011 (billions)However, between 2008 and 2011, there will be greater growth for 2006 2007 2008 2009 2010 2011rich media and video ads and lead-generation advertising than for Borrell Associates, July $8.13 $10.32 $12.35 $13.79 $14.25 $13.24 2007 (1)paid search. Those two online ad formats are relatively eMarketer, January $6.80 $8.62 $11.00 $12.94 $14.91 $16.59undeveloped compared to search, hence their higher growth rates. 2008 (2) Forrester Research, - $6.15 $7.72 $9.72 $11.58 $14.07US Online Advertising Spending Growth, by Format, October 2007 (2)2006-2011 (% increase/decrease vs. prior year) JPMorgan, January 2008 (2) $8.60 $11.76 $15.52 $19.10 $23.63 $26.79 2006 2007 2008 2009 2010 2011 Morgan Stanley, October $6.68 $8.62 $10.90 $13.40 $15.79 - 2006 (3)Rich media/video 18.7% 47.2% 48.9% 36.8% 24.8% 22.8% Oppenheimer & Co., $6.75 $8.58 $10.65 $13.05 - -Lead generation* 74.0% 32.3% 30.9% 23.2% 17.4% 12.0% September 2007Search 32.2% 26.8% 27.5% 17.6% 15.2% 11.3% Piper Jaffray & Co., $9.90 $13.06 $15.50 $17.68 $19.75 $21.52Classified 43.5% 18.9% 28.5% 17.5% 14.4% 10.3% February 2007Display ads 46.9% 27.2% 26.2% 12.7% 12.6% 9.2% PricewaterhouseCoopers, $6.72 $8.50 $10.25 $11.80 $13.20 $14.50 June 2007 (4)Sponsorships -20.9% 7.9% 2.8% -11.4% -3.8% 7.5% Veronis Suhler Stevenson, $7.74 $10.17 $12.79 $15.66 $18.31 $20.87E-Mail 34.6% 26.6% 12.4% 14.8% 8.6% 5.0% August 2007 (4)Total 34.6% 26.8% 28.5% 18.2% 15.4% 12.0% Note: includes both national and local search; (1) includes paid placementNote: eMarketer benchmarks its US online advertising spending and contextual search advertising; (2) includes paid search (paidprojections against the Interactive Advertising Bureau placement), contextual search, paid inclusion; excludes SEO; (3) search(IAB)/PricewaterhouseCoopers (PwC) data, for which the last full year fees advertisers pay Internet companies to list and/or link their companymeasured was 2006; online ad data includes categories as defined by site/domain name to a specific search word or phrase; (4) keyword searchIAB/PwC benchmark—display ads (such as banners), search ads (including Source: Borrell Associates, provided to eMarketer, July 2007; eMarketer,paid listings, contextual text links and paid inclusion), rich media (including January 2008; Forrester Research, "U.S. Online Marketing Forecast 2007 Tovideo), classified ads, sponsorships, referrals (lead generation) and e-mail 2012," October 2007; JPMorgan and company reports, "Nothing But Net,"(embedded ads only); excludes mobile ad spending; *also called referrals January 2008; Morgan Stanley, "US Internet Advertising Outlook,Source: eMarketer, October 2007 2006-2010E," October 2006; Oppenheimer & Co. Inc. "Online Advertising:088302 www.eMarketer.com Mortgage Related Impact, Trimming Forecast for US Internet Advertising," September 2007; Piper Jaffray & Co., "The User Revolution: The New088302 Advertising Ecosystem and the Rise of the Internet as a Mass Medium," February 2007; PricewaterhouseCoopers (PwC) and Wilkofsky Gruen Associates, "Global Entertainment and Media Outlook: 2007-2011," June 20, 2007; VSS, "Communications Industry Forecast 2007-2011," August 7, 2007 090487 www.eMarketer.com 090487 Search Engine Marketing 6
  • 7. Comparative Estimates: Search MarketingWhen it comes to spending increases, however, there is far less Comparative Estimates: US Search Advertisingdivergence. Among the nine researchers in the following chart, all Spending As a Percent of Total Online Advertisingbut one (Forrester) see a slowly declining growth rate. And, even Spending, 2006-2011with that decline, all but one (Borrell) see positive year-over-year 2006 2007 2008 2009 2010 2011annual percentage changes. Borrell Associates, July 33.7% 35.6% 36.5% 36.7% 35.3% 32.6% 2007 (1) eMarketer, January 40.3% 40.3% 40.0% 39.8% 39.8% 39.5%Comparative Estimates: US Search Advertising 2008 (2)Spending Growth, 2006-2011 (% change) Forrester Research, - 44.6% 41.7% 39.7% 37.1% 35.9% 2006 2007 2008 2009 2010 2011 October 2007 (2)Borrell Associates, July 41.5% 26.8% 19.7% 11.7% 3.3% -7.1% Morgan Stanley, October 41.8% 43.8% 45.9% 48.0% 49.6% -2007 (1) 2006 (3)eMarketer, January 32.2% 26.8% 27.5% 17.6% 15.2% 11.3% Oppenheimer & Co., 40.0% 40.5% 41.0% 41.4% - -2008 (2) September 2007Forrester Research, - - 25.5% 25.9% 19.1% 21.5% Piper Jaffray & Co., 51.2% 52.9% 52.6% 52.1% 51.7% 51.2%October 2007 (2) February 2007JPMorgan, January 2008 (2) - 36.8% 31.9% 23.1% 23.7% 13.4% PricewaterhouseCoopers, 40.0% 40.3% 40.7% 41.0% 41.0% 41.0% June 2007 (4)Morgan Stanley, October 29.9% 29.1% 26.4% 22.9% 17.8% -2006 (3) Veronis Suhler Stevenson, 32.7% 33.3% 33.7% 34.0% 33.9% 33.7%Oppenheimer & Co., 31.3% 27.0% 24.2% 22.5% - - Note: includes both national and local search; (1) includes paid placementSeptember 2007 and contextual search advertising; (2) includes paid search (paid placement), contextual search, paid inclusion; excludes SEO; (3) searchPiper Jaffray & Co., 50.9% 32.0% 18.7% 14.0% 11.7% 9.0% fees advertisers pay Internet companies to list and/or link their companyFebruary 2007 site/domain name to a specific search word or phrase; (4) keyword searchPricewaterhouseCoopers, 30.7% 26.5% 20.6% 15.1% 11.9% 9.8% Source: Borrell Associates, provided to eMarketer, July 2007; eMarketer,June 2007 (4) January 2008; Forrester Research, "U.S. Online Marketing Forecast 2007 To 2012," October 2007; Morgan Stanley, "US Internet Advertising Outlook,Veronis Suhler Stevenson, 38.1% 31.4% 25.9% 22.4% 16.9% 14.0% 2006-2010E," October 2006; Oppenheimer & Co. Inc. "Online Advertising:August 2007 (4) Mortgage Related Impact, Trimming Forecast for US Internet Advertising,"Note: includes both national and local search; (1) includes paid placement September 2007; Piper Jaffray & Co., "The User Revolution: The Newand contextual search advertising; (2) includes paid search (paid Advertising Ecosystem and the Rise of the Internet as a Mass Medium,"placement), contextual search, paid inclusion; excludes SEO; (3) search fees February 2007; PricewaterhouseCoopers (PwC) and Wilkofsky Gruenadvertisers pay Internet companies to list and/or link their company site/ Associates, "Global Entertainment and Media Outlook: 2007-2011," June 20,domain name to a specific search word or phrase; (4) keyword search 2007; VSS, "Communications Industry Forecast 2007-2011," August 7, 2007Source: Borrell Associates, provided to eMarketer, July 2007; eMarketer,January 2008; Forrester Research, "U.S. Online Marketing Forecast 2007 To 090493 www.eMarketer.com2012," October 2007; JPMorgan and company reports, "Nothing But Net,"January 2008; Morgan Stanley, "US Internet Advertising Outlook, 0904932006-2010E," October 2006; Oppenheimer & Co. Inc. "Online Advertising:Mortgage Related Impact, Trimming Forecast for US Internet Advertising,"September 2007; Piper Jaffray & Co., "The User Revolution: The NewAdvertising Ecosystem and the Rise of the Internet as a Mass Medium,"February 2007; PricewaterhouseCoopers (PwC) and Wilkofsky GruenAssociates, "Global Entertainment and Media Outlook: 2007-2011," June20, 2007; VSS, "Communications Industry Forecast 2007-2011," August 7,2007090491 www.eMarketer.com090491All researchers project that paid search will remain the dominantform of Internet ad spending in the next four years. However, in2008 alone, those market shares diverge dramatically; Piper Jaffraybelieves search advertising will make up 52.6% of total Internet adspending, whereas Veronis Suhler Stevenson forecasts search ashaving a 33.7% share.Varying methodologies concerning what elements get included inboth search advertising and overall Internet advertising contributegreatly to these differences. Search Engine Marketing 7
  • 8. Search Spending by TypeIn 2007, paid search ads will contribute 62% to all US Search Marketing Spending Share, by Type, 2007-2012 (% of total and millions)search engine marketing spending, with SEO 2007 2008 2009 2010 2011 2012spending contributing about 18% to the pie. By Paid search 56% 54% 53% 49% 44% 40% Paid inclusion 10% 10% 9% 8% 7% 7%2011, however, a greater focus on SEO means Contextual ads 10% 10% 11% 12% 16% 18%that form of search marketing will represent SEO 24% 26% 27% 31% 33% 35% Total (millions) $8,056 $10,432 $13,310 $16,775 $20,993 $25,323nearly 23%, while paid search will fall back to not Note: paid search defined as amount spent on paid search media onquite 57%. search engines; paid inclusion defined as amount spent on submitting pages to paid directories (like Froogle or Yahoo! Shopping) for cataloging; contextual ads defined as amount spent buying contextual ads acrossBehind that shift is the recognition that, even though most people content sites in different search engine or aggregator networks; SEO defined as search engine optimization, or amount spent for techniques toare ready to click on relevant paid search ads, they prefer organic boost natural or organic rankings for various keywords Source: Forrester Research, "U.S. Online Marketing Forecast 2007 To 2012,"listings even more and tend to equate higher organic search October 2007 as cited in Advertising Age, "Search Marketing Fact Pack 2007," November 2007; eMarketer calculations, December 2007rankings with better brands. Further, as brand advertisers 090460 www.eMarketer.comincreasingly make search a central component of their online 090460campaigns, the need to see those brands with top natural In dollar terms, the paid search market share will surpass $6.5rankings becomes ever more urgent. billion in 2007 and nearly double to almost $12.2 billion in 2011.Contextual advertising will also expand in the next four years, Over the same period, spending for SEO and contextualmoving up from a 14% share in 2007 to 17% in 2011. This spending advertising will more than double.swing will be due to two factors: one, better algorithms that more Overall, search engine marketing spending will rise spectacularlyeffectively target the context, creating more relevant ads, and, from $10.6 billion in 2007 to $21.5 billion in 2011.two, more Web publishers will look to bulk up their revenues bygreater use of their ad inventory space. US Search Engine Marketing Spending Growth, by Type, 2006-2011 (millions)US Search Engine Marketing Spending, by Type, 2006 2007 2008 2009 2010 20112006-2011 (% of total and millions) Paid search $5,222 $6,554 $8,333 $9,675 $11,031 $12,194 2006 2007 2008 2009 2010 2011 advertisingPaid search 63.5% 62.0% 61.2% 59.4% 58.0% 56.7% Contextual $1,061 $1,466 $2,008 $2,522 $3,130 $3,633advertising advertisingContextual 12.9% 13.9% 14.7% 15.5% 16.5% 16.9% Paid inclusion $517 $604 $660 $737 $745 $763advertising Search engine $1,430 $1,950 $2,625 $3,350 $4,100 $4,900Paid inclusion 6.3% 5.7% 4.8% 4.5% 3.9% 3.6% optimization (SEO)Search engine 17.4% 18.4% 19.3% 20.6% 21.6% 22.8%optimization Total $8,229 $10,574 $13,625 $16,285 $19,006 $21,490(SEO) Note: Search engine marketing includes both advertising andTotal $8,229 $10,574 $13,625 $16,285 $19,006 $21,490 non-advertising (non-media buy) components; search advertising includes paid listings for search engine results (also called "paid placement"),Note: Search engine marketing includes both advertising and contextual text links that appear alongside content on third-party publishernon-advertising (non-media buy) components; search advertising includes sites and paid inclusion for guaranteeing that a marketers URL is indexedpaid listings for search engine results (also called "paid placement"), by a search engine; search engine optimization (SEO) includes thosecontextual text links that appear alongside content on third-party publisher techniques used to create better placement in the natural, or organic,sites and paid inclusion for guaranteeing that a marketers URL is indexed search results; numbers may not add up total due to roundingby a search engine; search engine optimization (SEO) includes those Source: eMarketer, January 2008techniques used to create better placement in the natural, or organic,search results; numbers may not add up to 100% due to rounding 090480 www.eMarketer.comSource: eMarketer, January 2008 090480090485 www.eMarketer.com090485According to Forrester, a similar but more dramatic shift will occurin search marketing spending. However, the research firm seespaid search with only a 44% share in 2011, whereas SEO willcontribute 33% to the whole. Search Engine Marketing 8
  • 9. Search Spending by TypeThe Forrester perspective shows a similar curve, with total search US Search Marketing Spending Growth, by Type,marketing at only $8.1 billion in 2007 and $21 billion in 2011. The 2008-2012 (% change)2012 projection shows a steep jump, however, rising to over $25.3 2008 2009 2010 2011 2012billion by the end of that year. Paid search 25.3% 25.2% 16.5% 12.4% 9.7% Paid inclusion 27.5% 14.9% 12.0% 9.5% 20.7%US Search Marketing Spending, by Type, 2007-2012 Contextual ads 24.5% 40.4% 37.5% 66.9% 35.7%(millions) SEO 42.4% 32.5% 44.7% 33.2% 27.9% 2007 2008 2009 2010 2011 2012 Total 29.5% 27.6% 26.0% 25.1% 20.6%Paid search $4,496 $5,633 $7,054 $8,220 $9,237 $10,129 Note: paid search defined as amount spent on paid search media onPaid inclusion $818 $1,043 $1,198 $1,342 $1,469 $1,773 search engines; paid inclusion defined as amount spent on submitting pages to paid directories (like Froogle or Yahoo! Shopping) for cataloging;Contextual ads $838 $1,043 $1,464 $2,013 $3,359 $4,558 contextual ads defined as amount spent buying contextual ads acrossSEO $1,904 $2,712 $3,594 $5,200 $6,928 $8,863 content sites in different search engine or aggregator networks; SEO defined as search engine optimization, or amount spent for techniques toTotal $8,056 $10,432 $13,310 $16,775 $20,993 $25,323 boost natural or organic rankings for various keywords Source: Forrester Research, "U.S. Online Marketing Forecast 2007 To 2012,"Note: paid search defined as amount spent on paid search media on October 2007 as cited in Advertising Age, "Search Marketing Fact Packsearch engines; paid inclusion defined as amount spent on submitting 2007," November 2007; eMarketer calculations, December 2007pages to paid directories (like Froogle or Yahoo! Shopping) for cataloging;contextual ads defined as amount spent buying contextual ads across 090461 www.eMarketer.comcontent sites in different search engine or aggregator networks; SEO 090461defined as search engine optimization, or amount spent for techniques toboost natural or organic rankings for various keywords A greater spending shift to SEO relative to paid search isSource: Forrester Research, "U.S. Online Marketing Forecast 2007 To 2012,"October 2007 as cited in Advertising Age, "Search Marketing Fact Pack supported by research that shows people tend to click more on2007," November 2007 organic listings than ads. From the marketer perspective, or at090457 www.eMarketer.com least that of the retailer, paid search is used only somewhat more090457 than natural search.In comparing the eMarketer and Forrester Research growth rates,note the following. Type of Search Engine Marketing Used by US Retailers, March 2007 (% of respondents)■ Both firms project paid search advertising to have the greatest increase in 2008, with declining gains in subsequent years.■ Although eMarketer expects increases for contextual Both equally advertising to have reached their peak—at 38.2%—in 2007, 26.1% More paid search than Forrester sees up-and-down gains, with a 66.9% high in 2011. natural search 39.2%■ The largest increase for SEO spending will happen in 2007, More natural search eMarketer projects, or in 2010, according to Forrester. than paid search 34.7%US Search Engine Marketing Spending Growth, by Note: n=245; numbers may not add up to 100% due to roundingType, 2007-2011 (% change) Source: Internet Retailer with WebSurveyor, April 2007 2007 2008 2009 2010 2011 082606 www.eMarketer.comPaid search advertising 25.5% 27.1% 16.1% 14.0% 10.5% 082606Contextual advertising 38.2% 36.9% 25.6% 24.1% 16.1% However, an Internet Retailer survey of chain retailers, catalogPaid inclusion 16.8% 9.3% 11.7% 1.1% 2.4% companies,Web-only merchants and consumer brandSearch engine optimization (SEO) 36.4% 34.6% 27.6% 22.4% 19.5% manufacturers showed 46.1% of respondents saying SEO performedTotal 28.5% 28.9% 19.5% 16.7% 13.1% best compared with 37.3% for pay-per-click advertisements.Note: Search engine marketing includes both advertising andnon-advertising (non-media buy) components; search advertising includespaid listings for search engine results (also called "paid placement"),contextual text links that appear alongside content on third-party publishersites and paid inclusion for guaranteeing that a marketers URL is indexedby a search engine; search engine optimization (SEO) includes thosetechniques used to create better placement in the natural, or organic,search resultsSource: eMarketer, January 2008090484 www.eMarketer.com090484 Search Engine Marketing 9
  • 10. Search Spending by Type People Who SearchConsidering, too, how SEO tends to be less expensive than paid How much do advertisers spend for paid searchsearch, then even small boosts in SEO spending relative to paidsearch can indicate a larger shift in marketing effectiveness than relative to the audience for those ads?might be indicated by dollars alone. Viewed by the people marketers look to reach, the 40% share forBest Performing Type of Search Engine Marketing for paid search can appear outlandish. In fact, when it comes to paidConversion Rates according to US Retailers, March search advertising, there is an extreme disconnect between the2007 (% of respondents) dollars advertisers spend and the time consumers spend with the medium. That gap is greater for paid search than nearly any other form of advertising, which sometimes makes the ad form seem Both equally 16.6% counterintuitive, especially for traditional marketers. Pay-per-click That’s all to say that, relative to the time people spend using 37.3% search engines, companies pour disproportionate sums into paid Natural search engine search ads compared to display ads on content sites. According to optimization 46.1% ongoing research from the Online Publishers Association (OPA) and Nielsen//NetRatings, US Internet users in 2007 will spend lessNote: n=245; numbers may not add up to 100% due to rounding than 5% of their online time using search versus nearly 50% ofSource: Internet Retailer with WebSurveyor, April 2007 their time on content sites.082609 www.eMarketer.com082609 Average Share of Time US Internet Users Spend Online, by Site Category, Q1 2006-Q2 2007 (% of total) Q1 Q2 Q3 Q4 Q1 Q2 2006 2006 2006 2006 2007 2007 Content 38.3% 39.4% 41.4% 44.7% 46.0% 48.1% Communications 38.6% 38.7% 37.6% 33.6% 33.5% 32.7% Commerce 17.6% 16.5% 15.9% 16.9% 15.8% 14.5% Search 5.4% 5.4% 5.0% 4.8% 4.7% 4.6% Note: excludes .gov and .edu Web sites, as well as pornographic domains; numbers may not add up to 100% due to rounding Source: Online Publishers Association (OPA) and Nielsen//NetRatings, "Internet Activity Index (IAI)," October 2007; eMarketer calculations, November 2007 090392 www.eMarketer.com 090392 And yet in 2007, paid search advertisers spent $5.07 per hour of consumer search usage compared with only 49 cents for display advertising relative to each hour users spent on content sites. (Note that while display ads also appear on communications and commerce sites, the following chart does not include such sites in its formula. If it did, the figure for display spending per hour would be even smaller.) Of course when search is effective, people find what they need and go away, and that greatly reduces the time spent on sites. But when content is effective, people want to stick around. Nevertheless, a 10-1 ratio between search and display dollars points to the importance of Internet search engine users in contrast to their brief time spent searching. The growth of paid search spending per hour (up by 6.5% in 2007) also surpassed that of display advertising, which dropped by 11.6% in 2007. If nothing else, the data point to how even with the sharp increase in consumer time spent on content sites, advertisers have not caught up. Search Engine Marketing 10
  • 11. People Who SearchBut, to the point of this report, the increase in paid search However, household income and gender among searchspending per search hour does not come close to the overall engine users more or less tracked the overall figures for eachInternet ad spending gain of 26.8% for 2007. The audience is far category shown.ahead of the advertiser. Demographic Profile of US Search Engine Users, byAdvertising Dollars Spent per Hour of US Consumer Search Engine, October 2006Internet Usage*, by Type, 2006 & 2007 Google Yahoo! MSN Ask.com AOL Online PopulationPaid search spending** per search hours Unique users (millions) 93.0 55.1 40.2 38.8 25.3 157.1 $4.76 Audience reach 59% 35% 25% 24% 16% 100% $5.07 GenderTotal Internet ad spending per total hours Male 50% 49% 48% 47% 43% 48% $0.79 Female 50% 51% 52% 53% 57% 52% $0.78 AgeDisplay ad spending*** per content hours <18 18% 13% 12% 17% 14% 20% $0.55 18+ 82% 87% 88% 83% 86% 80% $0.49 18-21 4% 3% 3% 3% 3% 4% 2006 2007 21-34 17% 18% 14% 15% 12% 17%Note: based on eMarketer ad spending estimates divided by total time 35-49 33% 34% 35% 33% 31% 28%spent online by site category (Online Publishers Association and 50-64 22% 25% 28% 25% 28% 23%Nielsen//NetRatings), with the last reported month for Internet usage asOctober 2007; *consumer usage for Internet content sites (display), search 65+ 6% 7% 8% 7% 13% 9%sites (paid search) and total time spent online; **includes paid search adsonly on search engines and excludes contextual advertising and paid Household Incomeinclusion; ***includes static display ads, rich media and video ads <$25,000 5% 6% 5% 8% 6% 6%Source: eMarketer, December 2007; Online Publishers Association andNielsen//NetRatings, December 2007 $25,000-$49,999 19% 22% 21% 24% 22% 23%090740 www.eMarketer.com $50,000-$74,999 27% 28% 27% 26% 26% 27%090740 $75,000-$99,999 21% 19% 20% 19% 19% 19%Who is the audience for search engines and the advertisers who $100,000-$149,000 17% 16% 16% 14% 17% 16%love them? The following sections help paint a fuller picture of the $150,000+ 9% 8% 9% 7% 10% 8%search audience by answering these questions: No response 2% 1% 2% 2% 1% 3% Source: Nielsen//NetRatings appearing in Piper Jaffray & Co., February■ Who searches? 2007 082314 www.eMarketer.com■ How many people search? 082314■ How often do they search? What do people think about search engine results? Surprisingly, user responses do not vary much according to the degree of■ Where do people search? usage, Forrester Research found.■ Where do searchers come from? Where do they go?■ How many searches do people conduct?■ How do people use keywords?■ Why do people search?Who Searches?A demographic profile of US search engine users fromNielsen//NetRatings indicated that searchers were much likeInternet users in general, except for some salient differences.For example, while 20% of the online population was younger than18, a lower percentage used each of the five search enginesincluded. Similarly, while 28% of the online population was between35 and 49, a higher percentage used the five search engines. Search Engine Marketing 11
  • 12. People Who SearchFor example—and this points to the importance of increased Customer Service Quality according to US Adultspending on SEO—59% of all respondents to Forrester’s study Consumers, by Industry, July 2007 (% of respondents)said they did not pay attention to paid search ads. Further, 36% did Good Bad Not sure or refusednot trust search engine ads. Though it cannot be deduced from Supermarkets 92% 8% *this figure that 64% of search engine users do trust those ads, it Online search engines 84% 7% 9%would seem that there is more trust than not. Computer hardware companies 78% 14% 7% Hospitals 78% 20% 2%Attitudes of Search Engine Users in North Americatoward Search Results, by Frequency of Search Banks 78% 22% *Engine Usage, Q2 2006 (% of respondents) Computer software companies 77% 16% 8% Occa- Moder- Fre- All Packaged food companies 77% 22% 1% sion- ately** quent- respon- Car manufacturers 72% 26% 1% ally* ly*** dents Electric and gas utilities 71% 29% *I dont pay attention to the advertise- 62% 63% 62% 59%ments that appear around search results Internet service providers 70% 24% 5%There seem to be more advertisements 54% 56% 59% 51% Investment and brokerage firms 70% 25% 5%on search engines now compared with Online retailers 69% 21% 11%last year Telephone companies 67% 32% 1%I dont trust search engine 38% 38% 38% 36%advertisements Airlines 61% 35% 4%Search engine advertisements are less 19% 19% 20% 18% Pharmaceutical and drug companies 60% 39% *relevant now compared with last year Life insurance companies 57% 39% 4%When I see a search advertisement 13% 13% 15% 12% Cable companies 48% 49% 2%featuring a brand I recognize, I thinkmore highly of that brand Health insurance companies 39% 60% 1%I often find the advertisements just as 11% 12% 14% 11% Managed care companies (eg HMOs) 37% 57% 6%relevant as the search results Oil companies 33% 66% 2%I often click on the advertisements that 10% 11% 13% 10% Tobacco companies 26% 72% 1%appear next to the results Note: n=1,010; numbers may not add up to 100% due to rounding; *<0.5%Note: *use search engines once a month to several times a month; **use Source: Harris Interactive, "Harris Poll" as cited in press release, August 8,search engines once a week to several times a week; ***use search 2007engines daily 086389 www.eMarketer.comSource: Forrester Research, December 2006082203 www.eMarketer.com 086389082203 Looking specifically at search engines and portals, the AmericanEven if search ads are not central for most search users, the search Customer Satisfaction Index (ACSI) research for 2007 showed thatengines themselves get high grades from US consumers. In a Harris only Yahoo! and Google got ranked higher than average on its 100-Interactive poll from July 2007, 84% of respondents cited search point scale.engines for good customer service, topped only by supermarkets. US Customer Satisfaction with Portals and SearchHowever, the term “customer service” is likely used broadly here, Engines, 2002-2007 (based on a 100-point scale*)since one would guess that the vast majority of people who have 2002 2003 2004 2005 2006 2007used a search engine have never actually spoken with or e-mailed Yahoo! 76 78 78 80 76 79the people running that engine. Most probably, these results imply Google 80 82 82 82 81 78that people like what they get from search sites. Ask.com 62 69 71 72 71 75 MSN 72 74 75 75 74 75 AOL 59 65 67 71 74 67 All others 72 78 78 77 78 75 Portals and search engines average 68 71 72 76 77 75 Note: figures are for Q2 of each year; *satisfaction measured on a scale of 1 to 100, using the American Customer Satisfaction Index (ACSI) methodology Source: American Customer Satisfaction Index (ACSI) and ForeSee Results, "Annual E-Business Report," provided to eMarketer, August 14, 2007 086448 www.eMarketer.com 086448 Search Engine Marketing 12
  • 13. People Who SearchConsumer attitudes about search—and the data created each A demographic portrait of these Internet users shows atime people enter a search term—increasingly count privacy as a correlation between higher education and greater concern andvaluable asset. The “Digital Footprints” report, released in care regarding personal information. Further, more women thanDecember 2007 by the Pew Internet & American Life Project, men expressed anxiety about how much information about themstudied the connections between online personal information and might be available online.search. Though the report did not focus on search query data, it is auseful guide to understanding how much concern people have Demographic Profile of US Adult Internet Users Who Are Concerned about Their Personal Informationabout their personal information and its availability on the Internet. Being Available Online, December 2006 (% of respondents in each group)Though 39% of respondents expressed concern about the degree Concerned Worried Confident Unfazedof information about them available online, only 21% of that and by the creatives andsegment also took steps to limit the amount of information careful way- (3) inactive (1) side (2) (4)available. This was called the “Concerned and Careful” group. GenderAnother 17%, dubbed the “Confident Creatives,” may not have Male 46% 46% 52% 50%been worried but did limit the data connected with them. Female 54% 54% 48% 50% AgeAll told, 56% of respondents either had some worry about 18-29 25% 20% 31% 21%personal data, took steps to limit what was available, or both. This 30-49 46% 46% 44% 41%is the online population addressed by efforts such as Ask.com’s 50-64 23% 28% 19% 28%AskEraser option. 65+ 6% 6% 5% 10% EducationOr, to view the same data another way, 60% of Internet users werenot worried about how much information was available about Less than high school 6% 8% 6% 7%them online, and a similar 61% did not bother to limit the amount of High school graduate 26% 32% 30% 30%information that could be found about them online. This is the Some college 29% 27% 30% 27% College graduate 39% 33% 34% 36%online population that might continue to be very satisfied with Annual household incomeGoogle or Yahoo!, both of which hold on to search data for months. <$30,000 22% 21% 28% 22%US Adult Internet Users Who Are Concerned about $30,000-$49,999 24% 23% 27% 28%Their Personal Information Being Available Online, $50,000-$74,999 25% 20% 14% 18%December 2006 (% of respondents in each group) $75,000+ 29% 35% 31% 32% Concerned Worried Confident Unfazed Internet experience and by the creatives and careful wayside (3) inactive % with broadband at home 68% 63% 65% 60% (1) (2) (4) Average number of years 9 8 8 8% of adult Internet users 21% 18% 17% 43% onlineWorry about how much Yes Yes No No Note: n=1,623 ages 18+; (1) defined as those who "fret about the personalinformation is available information available about them online and take steps to proactively limitabout you online? their own online data"; (2) defined as those who "despite being anxious about how much information is available about them, do not actively limitTake steps to limit the amount Yes No Yes No their online information"; (3) defined as those who "do not worry aboutof information available about the availability of their online data and actively upload content, but stillyou online? take steps to limit their personal information"; (4) defined as those who "neither worry about their personal information nor limit the amount ofNote: n=1,623 ages 18+; (1) defined as those who "fret about the personal information that can be found out about them online"information available about them online and take steps to proactively limit Source: Pew Internet & American Life Project, "Digital Footprints: Onlinetheir own online data"; (2) defined as those who "despite being anxious Identity Management and Search in the Age of Transparency," Decemberabout how much information is available about them, do not actively limit 16, 2007their online information"; (3) defined as those who "do not worry about theavailability of their online data and actively upload content, but still take 090738 www.eMarketer.comsteps to limit their personal information"; (4) defined as those who "neither 090738worry about their personal information nor limit the amount of informationthat can be found out about them online" But perhaps the concerns regarding search privacy are not asSource: Pew Internet & American Life Project, "Digital Footprints: OnlineIdentity Management and Search in the Age of Transparency," December pervasive as they might appear.16, 2007090737 www.eMarketer.com090737 Search Engine Marketing 13
  • 14. People Who SearchOnly 27% of respondents in a Ponemon Institute survey Types of Personal Information that US Consumers Arecommissioned by Vontu, a data-security company, cited search Most Concered about Losing via Theft or Data Loss, byterms as a type of personal information whose loss or theft would Age, 2007 (% of respondents in each group)concern them. Search terms 34%Types of Personal Information that US Consumers Are 14%Most Concered about Losing via Theft or Data Loss, Debit card number2007 (% of respondents) 32%Medical records 46% 40% Bank account/routing numberPharmaceutical history 24% 38% 42%Credit card number Employment history 35% 19%Debit card number 7% 34% Social security numberSocial security number 17% 33% 41%Credit report (credit score) Credit report 27% 13% 29%Search terms on a search engine (eg Google) 27% Tax return information 11%Bank account/routing number 39% 27% Movie (video) rentalsTax return information 7% 23% 45%Court or legal history (including criminal record) Home (real estate) value 21% 1%Note: n=786 30%Source: Vontu, “2007 Consumer Survey on Data Security” conducted byPoneman Institute, June 25, 2007 Marital status085452 www.eMarketer.com 1%085452 19%Such concerns appear to be extremely colored by age, however. In 18-25 (n=111) 65+ (n=69)the same Ponemon-Vontu survey, 34% of those ages 18 to 25 Note: includes responses with the maximum differences between youngerwould be disturbed by the loss of search term data more than any and older respondents Source: Vontu, “2007 Consumer Survey on Data Security” conducted byother type. Poneman Institute, June 25, 2007 085454 www.eMarketer.com 085454 Search Engine Marketing 14
  • 15. People Who SearchEarlier data indicated that AskEraser, or equivalent programs from US Search Engine Users, 2006-2011 (millions)other search engines, could win more users. The Center for SurveyResearch and Analysis at the University of Connecticut found that 2006 147.060% of US adults somewhat or strongly opposed search engines 2007 155.2permanently storing user search behaviors. 2008 161.9 2009 168.5US Adults Opinions Regarding Whether or Not SearchEngine Companies Should Permanently Store Users 2010 174.9Search Behaviors, February 2006 (% of respondents) 2011 180.0Strongly support 13% Note: ages 3+; based on usage anytime during the year from all locations Source: eMarketer, January 2008Somewhat support 19% 090496 www.eMarketer.comSomewhat oppose 27% 090496Strongly oppose 33% In fact, search engine use is growing faster than overall Internet Dont know/no answer 8% users and will continue along those lines. That means that even some portion of existing Internet users who do not search willNote: n=800Source: Center for Survey Research and Analysis at the University of start to.Connecticut, February 2006070847 www.eMarketer.com US Search Engine User Growth vs. Total Internet User070847 Growth, 2006-2011 (% change)Trust is limited. At least that’s true among the 51% of respondents 2006who expressed some degree of apprehension that information 8.7%collected by search engines would remain private. 3.7% 2007US Adults Level of Confidence that Information 5.6%Collected by Search Engine Companies Will RemainPrivate, February 2006 (% of respondents) 3.4% 2008 Extremely confident 5% 4.3% Very confident 8% 3.1%Somewhat confident 34% 2009 4.1%Not too confident 30% 3.2%Not confident at all 21% 2010 Dont know/no answer 2% 3.8%Note: n=800 3.0%Source: Center for Survey Research and Analysis at the University ofConnecticut, February 2006 2011070848 www.eMarketer.com 3.0%070848 2.5%How Many People Search? Search engine users Internet usersTrust might be limited, but that has not held many back from Note: ages 3+; based on usage anytime during the year from all locations Source: eMarketer, January 2008searching. At least 155 million people in the United States used 090501 www.eMarketer.comsearch engines in 2007. That group will rise by 25 million by 2011. 090501 Even so, although most Internet users search, not all do. eMarketer estimates show 83.5% of US Internet users as search users in 2008, inching up to 85.2% in 2011. Search Engine Marketing 15
  • 16. People Who SearchPerhaps more important for marketers is the penetration of Counting search users by search engine sites finds Google at thesearch among the total US population, at more than 55% in 2008 top of the heap. However, while comScore’s qSearch 2.0 serviceand surpassing 60% in 2011. said there were 142.1 million unique users on Google in September 2007, Nielsen Online’s MegaView Search service putUS Search Engine Users As a Percent of Total Internet that month’s figure at 105 million.Users and Total Population, 2006-20112006 The main reason for the difference is one of definition. The higher 80.8% comScore data are based on what it calls “expanded search 51.4% rankings.” That means the count includes not just what the2007 company deems the five “core search engines” in the US—Google 82.5% sites, Yahoo! sites, Microsoft sites, the Ask network and the Time 53.8% Warner network—but also the following.2008 ■ Partner search: searches initiated at partner sites that redirect 83.5% the visitor to a search engine site. 55.6%2009 ■ Cross-channel search: multiple searches when employing 84.2% more than one search tab (e.g., Web, images, news) for a single 57.3% search term.2010 ■ Local search: maps, directions and local directory listings. 84.8% 59.0% ■ Major “vertical” search locations, such as eBay and Amazon in2011 retail and Expedia in travel. 85.2% 60.2% Total Internet users Total populationNote: ages 3+; based on usage anytime during the year from all locationsSource: eMarketer, January 2008090504 www.eMarketer.com090504The OPA-Nielsen data showed a similar figure for search engineuse, with 83.4% reach in the second quarter of 2007. However,more Internet users visited content and communications sitesthan those who searched. That greater reach on non-search sitesis one reason for contextual ad programs and deals betweensearch engines and social network sites.Average Web Site Reach among US Internet Users, bySite Category, Q1 2006-Q2 2007 (% of total users) Q1 Q2 Q3 Q4 Q1 Q2 2006 2006 2006 2006 2007 2007Content 88.8% 89.0% 89.5% 91.7% 92.2% 92.7%Communications 82.4% 82.0% 83.2% 84.7% 85.7% 85.5%Search 80.4% 79.9% 79.2% 81.8% 83.0% 83.4%Commerce 75.2% 74.6% 74.7% 77.2% 77.0% 78.5%Average total 81.7% 81.4% 81.6% 83.8% 84.5% 85.0%Note: excludes .gov and .edu Web sites, as well as pornographic domainsSource: Online Publishers Association (OPA) and Nielsen//NetRatings,"Internet Activity Index (IAI)," October 2007; eMarketer calculations,November 2007090413 www.eMarketer.com090413 Search Engine Marketing 16
  • 17. People Who SearchOn the other side, Nielsen counts just search engine providers but Growth of US Unique Searchers, by Search Enginedoes go beyond the five core sites. Provider, May-September 2007 (% change) May Jun Jul Aug SepNumber of US Unique Searchers, by Search Engine Google sites 1.5% 2.6% 1.0% 1.7% -0.1%Provider, April-September 2007 (millions) Yahoo! sites 1.6% 2.3% 2.5% -0.3% -1.6% Apr May Jun Jul Aug Sep Time Warner Network 2.2% 2.0% 0.2% -1.9% -4.8%Google sites 133.0 135.0 138.6 139.9 142.3 142.1 Microsoft sites -1.1% 4.1% 4.0% -1.6% -5.1%Yahoo! sites 97.8 99.3 101.6 104.1 103.8 102.1 Ask Network 2.3% 7.4% 0.6% -1.8% 1.6%Time Warner Network 81.8 83.6 85.2 85.4 83.8 79.8 Total Internet 1.9% 1.0% -0.1% 0.1% 0.0%Microsoft sites 65.3 64.6 67.2 69.9 68.8 65.2 Source: comScore qSearch 2.0, "Expanded Search Report for the US,"Ask Network 39.5 40.4 43.4 43.6 42.8 43.5 provided to eMarketer, November 2007; eMarketer calculations, November 2007Total Internet 179.4 182.9 184.8 184.6 184.9 184.9 090348 www.eMarketer.comNote: total among individual search engine providers is greater than total 090348unique searchers since many unique searchers visit more than one searchprovider each monthSource: comScore qSearch 2.0, "Expanded Search Report for the US," Growth of US Unique Searchers, by Search Engineprovided to eMarketer, November 2007 Provider*, May-September 2007 (% change)090343 www.eMarketer.com May Jun Jul Aug Sep090343 Ask.com 5.5% 9.2% -6.4% -0.6% 10.5%Number of US Unique Searchers, by Search Engine Smarter Search - - 23.1% 10.1% 6.1%Provider*, April-September 2007 (millions) MapQuest 3.9% 5.4% 1.7% -10.5% 5.8% Apr May Jun Jul Aug Sep AOL -4.5% 4.9% -1.4% -2.7% 1.1%Google 101.6 100.8 101.5 103.7 105.4 105.0 Google -0.8% 0.7% 2.2% 1.6% -0.4%Yahoo! 57.6 57.6 59.6 61.2 61.1 60.0 Yahoo! 0.1% 3.5% 2.6% 0.0% -1.8%MSN/Windows Live 41.3 38.9 49.0 57.6 48.2 44.8 SBC Yellow Pages -2.4% 15.1% - - -5.1%AOL 23.8 22.7 23.8 23.5 22.8 23.1 MSN/Windows Live -5.7% 25.8% 17.6% -16.3% -7.1%Ask.com 15.9 16.7 18.3 17.1 17.0 18.8 NexTag -14.7% 29.3% 3.9% 2.7% -7.8%Smarter Search 6.8 - 8.1 9.9 10.9 11.6 Local.com 4.8% -6.0% 14.6% -9.3% -11.2%NexTag 9.2 7.9 10.2 10.6 10.9 10.0 Shopzilla - - - - -MapQuest 7.2 7.5 7.9 8.1 7.2 7.6 Total unique searchers -0.4% 1.6% 2.1% -0.3% -0.5%Local.com 8.1 8.4 7.9 9.1 8.3 7.3 Note: among home and work users; *top 10 for each month Source: Nielsen Online, “MegaView Search," provided to eMarketer,SBC Yellow Pages 7.7 7.5 8.6 - 7.2 6.8 November 2007; eMarketer calculations, November 2007Shopzilla - 6.4 - 7.2 - - 089485 www.eMarketer.comTotal unique searchers 131.4 130.9 133.0 135.8 135.4 134.7 089485Note: among home and work users; total among individual search engineproviders is greater than total unique searchers since many unique How Often Do People Search?searchers visit more than one search provider each month; *top 10 foreach month When it comes to consumer activity online, search is a mass ofSource: Nielsen Online, “MegaView Search," provided to eMarketer, seeming contradictions. People do it often but not for too long.November 2007; eMarketer calculations, November 2007089458 www.eMarketer.com However, no matter what the age group, over 90% of US089458 consumers use search engines or portals weekly, according to theWith those different approaches to defining the search engine “State of Media Democracy” survey from Deloitte & Touche.universe, not only does the number of people searching differ but By conflating search and portals, however, those estimates offergrowth rates differ as well. For example, while comScore pegged fuzzy math. More likely, the questions labeled “seek personalthe September 2007 searcher growth at the Ask network at only interest information”—at 72% or higher—and “seek product1.6%, Nielsen saw searcher growth at the core Ask.com site at a reviews, conduct shopping research”—ranging from 53% tostrong 10.5%. 74%—better represent the weekly search engine audience. Search Engine Marketing 17
  • 18. People Who SearchNote again that eMarketer puts search reach, and not just weekly Among older Americans, search engine use is nearly as ubiquitousreach, at 82.5% for 2007, while the OPA-Nielsen data for the as e-mail use, according to Pew Internet & American Life Projectsecond quarter of 2007 are 83.4%. research. This is another indicator of how marketers need to target search engine marketing at nearly all demographics.Online Activities Performed Weekly* according to USConsumers, by Age, February 23, 2007-March 6, 2007 Online Activities of US Older Adults and Seniors, 2006(% of respondents in each group) & 2007 (% of respondents) Millen- Gen X Baby Matures All 50-64 65+ nials 25-41 boomers 61-75 13-75 13-24 42-60 E-Mail* 91% 88%Use search engines or portals 94% 93% 91% 90% 92% Use a search engine** 90% 74%Read about local news, 64% 88% 87% 86% 82% Search for maps or driving directions** 82% 76%weather or current events Research hobbies or interests* 77% 62%Read national/world news, 59% 82% 81% 88% 77% News* 70% 58%weather or current events Buy a product*** 69% 50%Seek personal interest 72% 77% 72% 73% 73%information Visit state, local or federal government sites*** 68% 50%Check out new Web sites that 72% 73% 75% 70% 73% Travel purchase or reservations*** 61% 48%have never visited before Get financial information*** 46% 35%Purchase products 52% 78% 77% 79% 72% Instant messaging*** 36% 28%Seek product reviews, conduct 53% 74% 73% 70% 69% Research spiritual or religious information* 32% 29%shopping research Upload and share photos*** 30% 35%Read entertainment/celebrity 62% 69% 58% 46% 61%news Research family history or genealogy*** 28% 31%Research for work/school 85% 61% 52% 30% 59% Rated a product, service or person using an online 28% 22% rating system**Read sports news/information 48% 54% 56% 57% 54% Play online games*** 26% 23%Read travel/leisure information 33% 59% 59% 63% 54% Used online classified sites, Craigslist*** 23% 16%Note: n=2,200 ages 13-75; *frequently/occasionallySource: Deloitte & Touche, "State of the Media Democracy" conducted by Online auction*** 21% 9%Harris Group, provided to eMarketer, August 2007 Online auctions*** 19% 11%086517 www.eMarketer.com Sell products or services*** 13% 7%086517 Download podcasts*** 12% 4%In contrast, 68% of North American Internet users told Forrester Create or work on personal Web page** 8% 2%Research that they used search engines once a week or Social networking*** 4% 1%more frequently. Note: respondents answering if they had ever conducted the following activities online; *survey conducted in February-March, 2007; **surveyInternet Users in North America Who Use Search conducted in December 2006; ***survey conducted in August 2006 Source: Pew Internet & American Life Project, "Usage Over Time," June 15,Engines, by Frequency, Q2 2006 (% of respondents) 2007 087210 www.eMarketer.comDaily 32% 087210Several times a week 29%Once a week 7% Where Do People Search? Though the comScore and Nielsen numbers disagree about howSeveral times a month 14% many people have been using search engines, there is more Once a month 7% coherence regarding the share of users searching on specific sites. Less than once a month 7% For example, looking just at September 2007, either 76.9% Never 3% (comScore) or 77.9% (Nielsen) of unique searchers used Google.Source: Forrester Research, December 2006 Similarly, either 35.3% or 33.2% used Microsoft sites or082202 www.eMarketer.com MSN/Windows Live, according to the two researchers.082202 Search Engine Marketing 18
  • 19. People Who SearchAlthough shares differ for Yahoo!, the Time Warner network Most Popular Web Sites* in the US, Ranked by Market(mainly AOL) and Ask, those three, in addition to Google and Share of Visits**, April-September 2007Microsoft, get the greatest share of searchers. Apr May Jun Jul Aug Sep MySpace 5.86% 6.22% 6.71% 6.33% 5.76% 5.17%Share of US Unique Searchers, by Search Engine Google 4.64% 4.77% 4.79% 4.80% 4.79% 5.03%Provider, April-September 2007 (% of total and mail.yahoo.com 4.27% 4.45% 4.35% 4.47% 4.67% 4.91%millions) Yahoo! 4.04% 3.97% 4.17% 3.94% 3.84% 3.94% Apr May Jun Jul Aug Sep eBay 1.62% 1.59% 1.57% 1.57% 1.59% 1.81%Google sites 74.2% 73.8% 75.0% 75.8% 77.0% 76.9% mail.live.com - 0.33% 0.41% 0.51% 1.07% 1.75%Yahoo! sites 54.5% 54.3% 55.0% 56.4% 56.1% 55.2% search.yahoo.com 1.40% 1.48% 1.52% 1.56% 1.60% 1.68%Time Warner Network 45.6% 45.7% 46.1% 46.2% 45.3% 43.1% MSN 1.69% 1.54% 1.54% 1.48% 1.56% 1.55%Microsoft sites 36.4% 35.3% 36.4% 37.9% 37.2% 35.3% Hotmail 1.95% 1.85% 1.70% 1.64% 1.42% 1.00%Ask Network 22.0% 22.1% 23.5% 23.6% 23.2% 23.5% Facebook 0.84% 0.92% 1.01% 1.03% 1.05% 0.96%Total Internet (millions) 179.4 182.9 184.8 184.6 184.9 184.9 YouTube 0.65% 0.75% 0.84% 0.77% 0.70% 0.69%Note: total percentage among individual search engine providers is greaterthan 100% since many unique searchers visit more than one search search.msn.com 0.77% 0.73% 0.72% 0.62% 0.55% 0.56%provider each month images.google.com 0.53% 0.54% 0.50% 0.47% 0.44% 0.49%Source: comScore qSearch 2.0, "Expanded Search Report for the US,"provided to eMarketer, November 2007 Gmail 0.34% 0.37% 0.37% 0.40% 0.43% 0.46%090345 www.eMarketer.com Wikipedia 0.42% 0.42% 0.37% 0.37% 0.38% 0.45%090345 my.yahoo.com 0.34% 0.33% - 0.32% 0.34% 0.37% mail.aol.com 0.33% 0.35% 0.35% 0.34% 0.35% 0.34%Share of US Unique Searchers, by Search Engine www.pogo.com - - - - 0.32% 0.33%Provider*, April-September 2007 (% of total and news.yahoo.com - - - - - 0.33%millions) address.yahoo.com - - - - - 0.33% Apr May Jun Jul Aug Sep mail.myspace.com 3.76% 3.90% 4.34% 4.02% 3.52% -Google 77.3% 77.0% 76.3% 76.4% 77.8% 77.9% blog.myspace.com 0.42% 0.43% 0.45% 0.41% 0.36% -Yahoo! 43.8% 44.0% 44.8% 45.0% 45.1% 44.6% music.myspace.com 0.36% 0.40% 0.44% 0.36% - -MSN/Windows Live 31.4% 29.7% 36.8% 42.4% 35.6% 33.2% Photobucket - - 0.35% - - -AOL 18.1% 17.3% 17.9% 17.3% 16.9% 17.1% AOL 0.34% - - - - -Ask.com 12.1% 12.8% 13.7% 12.6% 12.6% 14.0% Note: *top 20 for each month; **in September 2007NexTag 7.0% 6.0% 7.6% 7.8% 8.0% 7.4% Source: Hitwise, "US Data Center," May-October 2007Local.com 6.1% 6.5% 6.0% 6.7% 6.1% 5.4% 090324 www.eMarketer.comSBC Yellow Pages 5.8% 5.7% 6.5% - 5.3% 5.1% 090324MapQuest 5.5% 5.7% 6.0% 5.9% 5.6% 5.7%Smarter Search 5.2% - 6.1% 7.3% 8.1% 8.6% Where Do Searchers Come From? Where Do They Go?Shopzilla - 4.9% - 5.3% - - Tracking where search engine visitors come from and where theyTotal unique searchers 131.4 130.9 133.0 135.8 135.4 134.7 go can help marketers understand patterns to improve theirNote: among home and work users; total among individual search engine search advertising. Research from Hitwise indicates clearproviders is greater than 100% since many unique searchers visit morethan one search provider each month; *top 10 for each month distinctions between upstream search engine visitors (the URLSource: Nielsen Online, “MegaView Search," provided to eMarketer, visited immediately before) and much more uniformity amongNovember 2007; eMarketer calculations, November 2007090316 www.eMarketer.com downstream travels (the URL visited immediately after a search).090316 For Google and Ask, the top 10 upstream sites delivered 37.7%In fact, among all types of Web sites—not just search—Google and 43% of their October 2007 US visitors, respectively.had the second greatest share of visits in September 2007,according to Hitwise. Other search sites that ranked highly in the However, for Yahoo! Search and MSN Search, their top 10entire US Web universe in that month included Yahoo! Search upstream sites were far more concentrated, delivering 73.5% and(seventh) and MSN Search (12th). 80.7% of their October 2007 US visitors, respectively. Search Engine Marketing 19
  • 20. People Who SearchThe percentages for downstream visits among all four search That the greatest share of Ask.com visitors came from Google inengines were far more alike, ranging from 13% to 14.8% among the three months shown implies the smaller search engine is athe top 10 sites in that same month. key second choice when people don’t find what they need on Google. That is something marketers should evaluate whenTotal US Internet User Visitor Shares at the Top 10 considering which search engines to advertise on.Upstream and Downstream Sites*, by Search Engine,May-October 2007 Top Six Upstream* Sites that US Internet Users Visit May Jun Jul Aug Sep Oct Immediately before Visiting Ask.com, Ranked byUpstream Visitor Share, August-October 2007Google 37.8% 38.7% 37.3% 36.1% 37.1% 37.7% Aug Sep Oct(www.google.com) Google (www.google.com) 12.25% 13.31% 13.67%Ask (www.ask.com) 46.4% 44.9% 43.1% 43.1% 44.3% 43.0% MySpace (www.myspace.com) 9.38% 9.60% 8.70%Yahoo! Search 69.6% 69.0% 70.7% 72.8% 73.0% 73.5% Yahoo! (www.yahoo.com) 4.49% 4.33% 4.34%(search.yahoo.com) Yahoo! Search (search.yahoo.com) 4.00% 4.30% 4.16%MSN Search 72.2% 72.4% 76.4% 80.6% 81.5% 80.7%(search.msn.com) Yahoo! Mail (mail.yahoo.com) 3.64% 3.53% 3.57%Downstream MSN (www.msn.com) 2.68% 2.65% 2.69%Ask (www.ask.com) 14.0% 13.7% 12.3% 12.3% 12.8% 13.0% Total, top six 36.45% 37.72% 37.12%Yahoo! Search 14.1% 14.5% 14.0% 13.8% 13.8% 13.7% Note: *upstream sites are those visited immediately prior to individual(search.yahoo.com) search engine visit Source: Hitwise, provided to eMarketer, December 2007; eMarketerMSN Search 16.8% 17.3% 16.1% 15.1% 14.9% 14.9% calculations, December 2007(search.msn.com) 090432 www.eMarketer.comGoogle 15.8% 15.7% 14.9% 14.9% 14.8% 14.8% 090432(www.google.com)Note: *upstream sites are those visited immediately prior to individual In contrast, there’s far greater imbalance among visitors to Yahoo!search engine visit; downstream sites are those visited immediately after Search and MSN Search. “Captive audience” might be one term toindividual search engine visitSource: Hitwise, provided to eMarketer, December 2007; eMarketer describe how more than 50% of Yahoo! Search visitors came fromcalculations, December 2007 the main portal, while 67% or more of MSN Search visitors came090415 www.eMarketer.com from its portal.090415The largest share of Google visitors from August to October 2007came from MySpace, the most-visited US Web site, according toHitwise data (see previous section). However, many Googlevisitors also came from both Yahoo! and MSN, the next three sites,which implies that those two portals are not capturing enough oftheir own users when they’re ready to search.Top Six Upstream* Sites that US Internet Users VisitImmediately before Visiting Google, Ranked by VisitorShare, August-October 2007 Aug Sep OctMySpace (www.myspace.com) 12.44% 12.35% 11.67%Yahoo! Mail (mail.yahoo.com) 5.28% 5.44% 5.55%Yahoo! (www.yahoo.com) 4.31% 4.40% 4.45%MSN (www.msn.com) 3.56% 3.54% 3.54%Windows Live Mail (mail.live.com) 2.08% 2.07% 3.16%eBay (www.ebay.com) 2.59% 2.83% 2.87%Total, top Six 30.26% 30.63% 31.24%Note: *upstream sites are those visited immediately prior to individualsearch engine visitSource: Hitwise, provided to eMarketer, December 2007; eMarketercalculations, December 2007090416 www.eMarketer.com090416 Search Engine Marketing 20
  • 21. People Who SearchFor search marketers, the implication here might be to Top Six Downstream* Sites that US Internet Usersaccompany search ads on those two engines with display ads on Visit Immediately after Visiting Google, by Visitorthe related portals, considering how many people go from one to Shares, August-October 2007 (% of total)the other. Aug Sep Oct Google Image Search (images.google.com) 4.34% 4.45% 4.53%Top Six Upstream* Sites that US Internet Users Visit Wikipedia (www.wikipedia.org) 1.81% 2.12% 2.16%Immediately before Visiting Yahoo! Search, Ranked by MySpace (www.myspace.com) 2.50% 2.17% 2.03%Visitor Share, August-October 2007 Gmail (www.gmail.com) 1.33% 1.35% 1.36% Aug Sep Oct eBay (www.ebay.com) 1.03% 1.04% 1.03%Yahoo! (www.yahoo.com) 50.33% 50.36% 50.90% Yahoo! Mail (mail.yahoo.com) - 0.81% 0.80%Yahoo! Mail (mail.yahoo.com) 10.64% 11.06% 11.13% YouTube (www.youtube.com) 0.84% - -MySpace (www.myspace.com) 4.23% 4.28% 3.97% Total, top six 11.85% 11.94% 11.91%My Yahoo! (my.yahoo.com) 2.02% 2.11% 2.20% Note: *downstream sites are those visited immediately after individualGoogle (www.google.com) 1.11% 1.17% 1.20% search engine visit Source: Hitwise, provided to eMarketer, December 2007; eMarketereBay (www.ebay.com) - 1.08% 1.06% calculations, December 2007Yahoo! Image Search 1.32% - - 090433 www.eMarketer.com(images.search.yahoo.com) 090433Total, top 6 69.65% 70.06% 70.45%Note: *upstream sites are those visited immediately prior to individual Top Six Downstream* Sites that US Internet Userssearch engine visitSource: Hitwise, provided to eMarketer, December 2007; eMarketer Visit Immediately after Visiting Yahoo! Search,Rankedcalculations, December 2007 by Visitor Share, August-October 2007090417 www.eMarketer.com Aug Sep Oct090417 MySpace (www.myspace.com) 3.43% 3.00% 2.82% Yahoo! Image Search 1.92% 1.98% 2.02%Top Six Upstream* Sites that US Internet Users Visit (images.search.yahoo.com)Immediately before Visiting MSN Search, Ranked by Wikipedia (www.wikipedia.org) 1.54% 1.76% 1.80%Visitor Share, August-October 2007 Google (www.google.com) 1.51% 1.59% 1.61% Aug Sep Oct eBay (www.ebay.com) 1.19% 1.29% 1.32%MSN (www.msn.com) 67.41% 69.28% 69.72% Yahoo! Mail (mail.yahoo.com) 1.13% 1.16% 1.08%Windows Live Mail (mail.live.com) 1.06% 1.82% 2.55% Total, top six 10.73% 10.79% 10.66%MySpace (www.myspace.com) 1.86% 1.70% 1.63% Note: *downstream sites are those visited immediately after individualWindows Live Hotmail (www.hotmail.com) 5.76% 3.97% 1.62% search engine visit Source: Hitwise, provided to eMarketer, December 2007; eMarketerMy MSN (my.msn.com) 1.07% 1.31% 1.29% calculations, December 2007MSN Image Search (search.msn.com/images) - - 0.98% 090434 www.eMarketer.comGoogle (www.google.com) 0.94% 0.90% - 090434Total, top six 78.10%78.97%77.80%Note: *upstream sites are those visited immediately prior to individual Top Six Downstream* Sites that US Internet Userssearch engine visit Visit Immediately after Visiting MSN Search, RankedSource: Hitwise, provided to eMarketer, December 2007; eMarketer by Visitor Share, August-October 2007calculations, December 2007 Aug Sep Oct090431 www.eMarketer.com MySpace (www.myspace.com) 3.92% 3.49% 3.03%090431 Google (www.google.com) 2.88% 2.99% 2.65%Downstream activity—that is, where people go after leaving a MSN Image Search (search.msn.com/images) - - 1.70%search engine—is far more spread out than upstream traffic Wikipedia (www.wikipedia.org) 1.22% 1.44% 1.42%patterns. Therefore, sites that appear often on search results— eBay (www.ebay.com) 1.71% 1.69% 1.32%notably Wikipedia and eBay—appear on the top six list for all four Yahoo! (www.yahoo.com) 1.30% 1.30% 1.15%large search engines. Yahoo! Mail (mail.yahoo.com) 1.05% 0.97% - Total, top six 12.07%11.88%11.28% Note: *downstream sites are those visited immediately after individual search engine visit Source: Hitwise, provided to eMarketer, December 2007; eMarketer calculations, December 2007 090435 www.eMarketer.com 090435 Search Engine Marketing 21
  • 22. People Who SearchTop Six Downstream* Sites that US Internet Users Share of Online Searches in the US, by Search EngineVisit Immediately after Visiting Ask.com, Ranked by Provider, January-October 2006Visitor Share, August-October 2007 Google Yahoo! MSN/Live Ask Other Aug Sep Oct Jan 51.1% 27.7% 11.0% 5.0% 5.2%Ask Images (images.ask.com) 3.59% 4.09% 4.39% Feb 53.0% 26.0% 11.0% 5.0% 5.0%Google (www.google.com) 1.92% 2.03% 2.13% Mar 53.0% 26.0% 12.0% 5.0% 4.0%MySpace (www.myspace.com) 2.13% 2.01% 1.90% Apr 53.2% 26.8% 10.7% 4.7% 4.6%Wikipedia (www.wikipedia.org) 1.01% 1.29% 1.33% May 54.4% 26.3% 10.3% 4.8% 4.2%Yahoo! (www.yahoo.com) 0.76% 0.75% 0.72% Jun 55.2% 26.7% 10.1% 4.1% 3.9%Yahoo! Mail (mail.yahoo.com) - 0.60% 0.58% Jul 54.8% 27.7% 10.2% 3.7% 3.6%eBay (www.ebay.com) 0.68% - - Aug 54.9% 27.9% 9.9% 3.7% 3.6%Total, top six 10.09% 10.76% 11.05% Sep 54.3% 29.2% 8.9% 4.4% 3.2%Note: *downstream sites are those visited immediately after individual Oct 54.4% 29.6% 8.5% 4.3% 3.2%search engine visitSource: Hitwise, provided to eMarketer, December 2007; eMarketer Note: excludes affiliate or syndicated searchcalculations, December 2007 Source: Compete Inc. as cited in company blog, February-November 2007; eMarketer calculations, December 2007090436 www.eMarketer.com 090437 www.eMarketer.com090436 090437How Many Searches Do People Conduct? However, in the corresponding months of 2007, Google’s monthlyWhen it comes to reckoning shares of total searches—and not just search share grew as high as 68%, while Yahoo! Search slipped tounique-visitor shares, where there can be overlap—Google is the a mere 18% share. Some might say that Google is pulling awayclear preference among US Internet users. from the pack.In data from Hitwise, people conducted up to 65% of their monthly Share of Online Searches in the US, by Search Enginesearches on Google in the April to September 2007 period. Yahoo! Provider, January-October 2007Search trailed each month with about one-third of Google’s total, Google Yahoo! MSN/Live* Ask Otherand, in that light, every other search engine collected a minuscule Jan 61.7% 23.1% 8.5% 3.6% 3.1%proportion of searches. Feb 63.0% 21.0% 9.0% 3.0% 4.0% Mar 64.7% 19.7% 9.5% 3.4% 2.7%Share of Online Searches in the US, by Search Engine, Apr 66.1% 20.4% 8.1% 3.2% 2.2%April-September 2007 (% of total) May 67.0% 19.7% 8.4% 3.5% 1.4% Apr May Jun Jul Aug Sep Jun 65.6% 20.5% 9.1% 3.5% 1.3%www.google.com 65.3% 65.1% 63.9% 64.4% 64.0% 63.6% Jul 65.9% 19.7% 10.1% 3.1% 1.2%search.yahoo.com 20.7% 20.9% 21.3% 22.1% 22.9% 22.6% Aug 66.6% 19.8% 9.4% 3.1% 1.1%search.msn.com 7.8% 7.6% 7.7% 7.0% 6.5% 6.3% Sep 67.0% 19.0% 9.2% 3.6% 1.2%www.ask.com 3.7% 3.9% 3.4% 3.2% 3.5% 4.3% Oct 68.0% 18.1% 9.2% 3.9% 0.8%www.live.com* 0.7% 0.8% 2.1% 1.8% 1.5% 1.6% Note: excludes affiliate or syndicated search; *excludes MSN/Liveswww.aolsearch.com 0.4% 0.4% 0.3% 0.4% 0.4% 0.4% ClubLive promotion in June 2007 Source: Compete Inc. as cited in company blog, February-November 2007;Other search engines 1.4% 1.3% 1.2% 1.2% 1.3% 1.4% eMarketer calculations, December 2007Note: April period=4 weeks ending April 28; May period=4 weeks ending 090451 www.eMarketer.comMay 26; June period=4 weeks ending June 30; July period=4 weeks ending 090451July 28; August period=4 weeks ending September 1; September period=4weeks ending September 29; *the search volume share reported forwww.live.com starting week ending June 9 through July 9 includessearches automatically generated from a promotion on club.live.comSource: Hitwise, provided to eMarketer, November 2007090322 www.eMarketer.com090322The next two charts from Compete indicate relatively profound shiftsin where people search. In the first 10 months of 2006, about 54% ofsearches took place on Google, with about 27% on Yahoo! Search. Search Engine Marketing 22
  • 23. People Who SearchSearch query share data from Nielsen and comScore also peg Share of Search Queries Performed by US InternetGoogle as No. 1 and Yahoo! Search as No. 2, but not by as large Users, by Search Engine Provider, April-Septembermargins as Hitwise or Compete. In September 2007, Google’s 2007 (% of total and billions)share was either 54% (Nielsen) or 57% (comScore). Apr May Jun Jul Aug Sep Google sites 48.1% 48.6% 47.7% 48.3% 49.7% 50.6%Share of Search Queries Performed by US Internet Yahoo! sites 19.9% 20.0% 18.9% 18.4% 18.0% 18.3%Users, by Search Engine Provider*, April-September Time Warner Network 7.6% 7.2% 7.3% 7.0% 6.8% 6.5%2007 (% of total and billions) Microsoft sites 7.2% 7.3% 9.1% 9.1% 8.3% 7.7% Apr May Jun Jul Aug Sep Ask Network 3.3% 3.3% 3.4% 3.4% 3.2% 3.4%Google 55.2% 56.3% 52.7% 53.3% 53.6% 54.0% Top five 86.1% 86.4% 86.3% 86.3% 86.1% 86.5%Yahoo! 21.9% 21.5% 20.2% 20.1% 19.9% 19.5% Other 13.9% 13.6% 13.7% 13.7% 13.9% 13.5%MSN/Windows Live 9.0% 8.4% 13.3% 13.6% 12.9% 12.0% Total Internet (billions) 12.07 12.48 13.39 13.70 13.70 13.02AOL 5.4% 5.3% 5.5% 5.2% 5.6% 6.0% Source: comScore qSearch 2.0, "Expanded Search Report for the US,"Ask.com 1.8% 2.0% 2.1% 1.8% 1.7% 2.2% provided to eMarketer, November 2007; eMarketer calculations, November 2007My Web 1.0% 0.9% 1.0% 0.9% 0.9% 0.8% 090354 www.eMarketer.comComcast 0.5% 0.5% 0.4% 0.5% 0.4% 0.5% 090354BellSouth - 0.4% 0.4% 0.5% 0.5% 0.5% Does Google’s dominance here imply marketers should just followMy Way 0.4% - 0.5% 0.3% 0.4% 0.4% the audience by placing most of their paid search ad dollars on theSBC Yellow Pages - - - - 0.4% 0.4% search giant? Not necessarily so.Dogpile.com 0.4% 0.4% 0.4% 0.3% - -EarthLink 0.4% 0.5% - - - - Google’s greater popularity among the search audience isOther 3.9% 3.8% 3.6% 3.4% 3.5% 3.6% matched by its popularity among marketers. That causes mostTotal (billions) 6.84 7.17 7.41 7.77 7.83 7.39 search keywords to get, by auction, higher per-click prices than atNote: among home and work users; *top 10 for each month the other search engines. Therefore, just to be effective, a searchSource: Nielsen Online, “MegaView Search," provided to eMarketer,November 2007; eMarketer calculations, November 2007 marketing campaign needs to consider how spreading its ad090319 www.eMarketer.com budget among several search engines might give greater reach at090319 the same, or perhaps even at a lower cost.Share of Search Queries Performed by US Internet In absolute numbers, how many searches do people in the US doUsers, by Search Engine Provider*, June-September monthly? The Nielsen data say nearly 7.4 billion in September2007 (% of total and billions) 2007, up from about 6.8 billion in April. Jun Jul Aug SepGoogle sites 54.9% 55.2% 56.5% 57.0% Number of Search Queries Performed by US InternetYahoo! sites 23.8% 23.5% 23.3% 23.7% Users, by Search Engine Provider*, April-SeptemberMicrosoft sites 12.2% 12.3% 11.3% 10.3% 2007 (millions)Ask Network 4.6% 4.7% 4.5% 4.7% Apr May Jun Jul Aug SepTime Warner Network 4.5% 4.4% 4.5% 4.3% Google 3,773.0 4,033.3 3,906.9 4,143.8 4,199.5 3,994.2Total (billions) 9.71 9.90 9.82 9.40 Yahoo! 1,497.2 1,540.9 1,496.1 1,559.7 1,561.9 1,443.2Note: among home, work and university users; *comScores "core search MSN/Windows Live 612.5 605.4 985.7 1,057.1 1,011.4 890.7report" is based on the five major search engines, and includes partner AOL 371.0 382.0 404.0 408.0 435.1 444.5searches and cross-channel searches for each property; excludes searchesfor mapping, local directory and user-generated video sites that are not in Ask.com 126.3 142.4 152.3 143.5 136.9 159.0the core domain of the five search enginesSource: comScore qSearch 2.0 as cited in press releases, July-October My Web 68.0 61.8 76.8 69.1 71.7 61.92007 Comcast 35.2 34.9 30.5 37.3 34.7 38.9090339 www.eMarketer.com BellSouth - 30.1 30.9 40.4 37.8 35.7090339 SBC Yellow Pages - - - - 31.9 29.4Even with comScore’s “expanded search rankings,” which My Way 26.8 - 35.6 24.5 32.5 26.8measure a larger search universe, people conducted 50.6% of Dogpile.com 28.6 26.3 30.5 25.7 - -their searches on Google sites in September 2007. EarthLink 30.0 33.5 - - - - Other 268.5 274.8 264.1 265.1 276.1 269.0 Total 6,837.1 7,165.4 7,413.4 7,774.2 7,829.4 7,393.3 Note: among home and work users; *top 10 for each month Source: Nielsen Online, “MegaView Search," provided to eMarketer, November 2007; eMarketer calculations, November 2007 090317 www.eMarketer.com 090317 Search Engine Marketing 23
  • 24. People Who SearchDespite its focus on just the top four search engines, the Compete With the significant variations in the number of search queriesmonthly figure for September 2007 is almost 7.7 billion, with about among the three researchers shown, the question naturally arises:1.2 billion more searches at Google alone than in the Nielsen data. Whose number is most accurate? Perhaps a better perspective, though, is gained by looking at search query share, as in the chartsNumber of Searches in the US, by Search EngineProvider, July-October 2007 (millions) leading off this section. Google Yahoo! MSN/Live Ask Total, top Likely more than any other data in this report, the average number four of queries per user per month demonstrates the pervasive natureJul 4,798 1,438 739 224 7,199 of search. From Nielsen’s perspective, that figure hit 54.9 perAug 4,965 1,477 703 228 7,373Sep 5,214 1,483 717 277 7,691 person in September 2007; comScore pegged it at 70.4 searchesOct 5,448 1,453 737 316 7,954 on average. In either case, and no matter how they’re counted, theNote: excludes affiliate or syndicated search; top 4 total represents 98.8% majority of all search queries represent potential marketingof all searches (July), 98.9% (August), 98.8% (September), 99.2% (October) opportunities, whether through ads or natural rankings boostedSource: Compete Inc. as cited in company blog, February-November 2007;eMarketer calculations, December 2007 by SEO.090452 www.eMarketer.com090452 Average Number of Online Searches per US UniqueEven with its narrowed focus on the five core search engines, Searcher, by Search Engine Provider*,comScore put September 2007 US search queries at 9.4 billion, a April-September 2007lesser figure than during any of the three prior months. Apr May Jun Jul Aug Sep Google 28.7 30.8 29.4 30.5 31.0 29.7Number of Search Queries Performed by US Internet Yahoo! 11.4 11.8 11.2 11.5 11.5 10.7Users, by Search Engine Provider*, June-September MSN/Windows Live 4.7 4.6 7.4 7.8 7.5 6.62007 (millions) AOL 2.8 2.9 3.0 3.0 3.2 3.3 Jun Jul Aug Sep Ask.com 1.0 1.1 1.1 1.1 1.0 1.2Google sites 5,330 5,459 5,545 5,356 My Web 0.5 0.5 0.6 0.5 0.5 0.5Yahoo! sites 2,307 2,325 2,290 2,227 Comcast 0.3 0.3 0.2 0.3 0.3 0.3Microsoft sites 1,181 1,214 1,106 969 BellSouth - 0.2 0.2 0.3 0.3 0.3Ask Network 449 462 438 444 My Way 0.2 - 0.3 0.2 0.2 0.2Time Warner Network 440 436 441 405 SBC Yellow Pages - - - - 0.2 0.2Total 9,707 9,896 9,820 9,401 Dogpile.com 0.2 0.2 0.2 0.2 - -Note: among home, work and university users; *comScores "core searchreport" is based on the five major search engines, and includes partner EarthLink 0.2 0.3 - - - -searches and cross-channel searches for each property; excludes searches Other 2.0 2.1 2.0 2.0 2.0 2.0for mapping, local directory and user-generated video sites that are not inthe core domain of the five search engines Total 52.0 54.7 55.7 57.2 57.8 54.9Source: comScore qSearch 2.0 as cited in press releases, July-October Note: among home and work users; *top 10 for each month2007 Source: Nielsen Online, “MegaView Search," provided to eMarketer,090329 www.eMarketer.com November 2007; eMarketer calculations, November 2007090329 090320 www.eMarketer.comWithin its “expanded search rankings,” the September 2007 total 090320jumps to more than 13 billion search queries, a nearly 1 billion gainover the April figure of 12.1 billion. Average Number of Online Searches per US Unique Searcher, by Search Engine Provider, April-SeptemberNumber of Search Queries Performed by US Internet 2007Users, by Search Engine Provider, April-September Apr May Jun Jul Aug Sep2007 (millions) Google sites 43.7 44.9 46.1 47.3 47.8 46.4 Apr May Jun Jul Aug Sep Yahoo! sites 24.6 25.1 24.8 24.2 23.8 23.3Google sites 5,812 6,066 6,385 6,614 6,809 6,593 Time Warner Network 11.2 10.7 11.4 11.2 11.2 10.6Yahoo! sites 2,402 2,494 2,524 2,524 2,473 2,381 Microsoft sites 13.2 14.0 18.2 17.9 16.6 15.3Time Warner Network 915 897 971 959 937 843 Ask Network 10.1 10.4 10.4 10.6 10.3 10.2Microsoft sites 864 906 1,223 1,251 1,144 999 Total Internet 67.3 68.2 72.5 74.2 74.1 70.4Ask Network 397 418 449 462 439 445 Source: comScore qSearch 2.0, "Expanded Search Report for the US,"Other 1,681 1,699 1,837 1,881 1,900 1,758 provided to eMarketer, November 2007; eMarketer calculations, November 2007Total Internet 12,072 12,480 13,388 13,692 13,703 13,018 090374 www.eMarketer.comSource: comScore qSearch 2.0, "Expanded Search Report for the US," 090374provided to eMarketer, November 2007; eMarketer calculations,November 2007090351 www.eMarketer.com090351 Search Engine Marketing 24
  • 25. People Who SearchOne last take on counting queries: Ask.com showed an Top 25 Keywords Share of Each Categorys Totalexceptionally large uptick in the average number of searches per Keywords on Infospace, August-October 2007searcher in September 2007. In that same month, the search Entertainmentengine also started a cross-media ad campaign to encourage use. 23.2%The two facts are most likely connected. Marketing might be a key Searchdifferentiator for competition among search engines, especially 13.9%with every site other than Google being an also-ran. Social networking 13.5%Growth of Average Number of Online Searches per USUnique Searcher, by Search Engine Provider*, E-Commerce/shopping/productMay-September 2007 (% change) 13.1% May Jun Jul Aug Sep General information/general topicsAsk.com 13.2% 5.2% -7.7% -4.4% 16.8% 7.9%Comcast -0.6% -14.1% 20.0% -6.7% 12.8% NewsAOL 3.3% 4.1% -1.1% 7.0% 2.7% 6.7%Google 7.3% -4.7% 3.9% 1.6% -4.4% TravelBellSouth - 0.8% 28.1% -6.2% -4.8% 6.5%Yahoo! 3.3% -4.5% 2.1% 0.4% -7.1%SBC Yellow Pages - - - - -7.3% Communication 6.2%MSN/Windows Live -0.8% 60.2% 5.0% -4.0% -11.5%My Web -8.7% 22.3% -11.8% 4.0% -13.2% SportsMy Way - - -32.6% 32.8% -17.2% 4.2%Dogpile.com -7.6% 13.9% -17.4% - - HealthEarthLink 11.9% - - - - 2.3%Other 2.7% -5.5% -1.7% 4.5% -2.0% Money/personal financeTotal 5.2% 1.8% 2.7% 1.0% -5.1% 2.3%Note: among home and work users; *top 10 for each monthSource: Nielsen Online, “MegaView Search," provided to eMarketer, Note: Percents calculated by taking the total number of search queries forNovember 2007; eMarketer calculations, November 2007 the top 25 keywords in each category generated within 90 days on Infospace and dividing by the total number of search queries for the top 25090321 www.eMarketer.com keywords in all of the 11 categories; no overtly "adult" elements have been090321 included Source: Wordtracker, November 2007; eMarketer calculations, November 2007How Do People Use Keywords? 090385 www.eMarketer.comWhen people enter search queries, what keywords do they use? 090385As a starting point, keywords—and their pricing—form the pivotal A view of the top five keywords that people entered in eachcore for search marketing campaigns. category indicates several factors about the ways people useSo, what keywords do people use most? According to search engines. Take the social networking category, for example.Wordtracker, a keyword analysis firm that derives its data from Both MySpace and YouTube were searched for at least twoInfospace, a search aggregator, 23.2% of all keywords or search different ways. That indicates how various spellings need to be bidterms entered in the August to October 2007 period were on for any set of keywords.entertainment related. Within that keyword category, only a Looking at the same category—or at the search sites,portion might be appropriate for search marketing campaigns. communication or e-commerce categories—it seems that the topAt the other end, only 2.3% of keywords came from either the searches might not be used so much to find things as they are tohealth or the money and personal finance categories. Those are index things, a substitute for Web browser bookmarks. Do peopletwo verticals in which many companies use search advertising to really need to search for “Google” or “Hotmail.com” or “eBay” asboost traffic. And yet, with people searching for a limited number terms? That is doubtful.of keywords, that implies greater pricing competition for relatedsearch terms. Search Engine Marketing 25
  • 26. People Who SearchCategories such as health and money and personal finance tend Average Number of Keywords per Search Query Usedto garner more general terms. That implies that more searches, by Internet Users Worldwide, July 2004 & July 2006rather than user laziness, are taking place. One word 17%Top Five Keywords per Category on Infospace, 11%August-October 2007 (% of each categorys keywords) Two words #1 #2 #2 #4 #5 Top five 30% total 29%Social Myspace Myspace. You- You Facenetworking com tube tube book Three words 27%% share 25.04% 14.76% 13.07% 8.14% 7.52% 68.53% 28%Search sites Google Yahoo Yahoo.com Google.com MSN Four words% share 19.26% 16.55% 10.33% 4.56% 4.52% 55.23% 15%Commun- Hotmail Hotmail. Yahoo Gmail Comcast.ication com mail net 17%% share 13.60% 12.81% 11.17% 5.33% 4.89% 47.79% Five wordsTravel Map- Maps Map Airline Google 7% quest quest tickets Earth 8%% share 22.93% 7.14% 6.87% 5.83% 4.84% 47.61% Six wordsMoney/ Bank of Jobs Mortgage Insur- Realtor. 3%personal America calculator ance comfinance 4%% share 11.61% 9.06% 8.99% 7.85% 6.48% 44.00% Seven wordsNews Obituaries News- Helmsleys Weather Local 1% paper trouble newspaper 2% obituaries% share 12.08% 8.66% 7.95% 7.55% 7.25% 43.49% July 2004 July 2006General Baby boy Dictionary Wikipedia Free Dogs Source: OneStat.com appearing in Piper Jaffray & Co., February 2007information/ names Englishgeneral course 082318 www.eMarketer.comtopics 082318% share 12.61% 8.61% 8.48% 6.50% 6.27% 42.47%Entertainment Play Play Vanessa Music Game game games Hudgens lyrics cheats for ps2% share 12.13% 9.34% 7.87% 6.91% 5.27% 41.51%E-Commerce/ eBay Craigslist Wallmart Home Webkinzshopping/ Depotproduct% share 17.57% 7.95% 4.90% 4.79% 4.37% 39.58%Health Doctors Finding Web Web Hearts Excuse dental md MD care% share 9.11% 7.12% 6.58% 6.40% 4.80% 34.02%Sports ESPN WWE John NFL Football Sena Schedule% share 7.30% 7.03% 6.82% 6.78% 5.64% 33.58%Note: Percents calculated by taking the total number of search queries forthe top 25 keywords in each category generated within 90 days onInfospace and dividing by the total number of search queries for the top 25keywords in all of the 11 categories; no overtly "adult" elements have beenincludedSource: Wordtracker, November 2007; eMarketer calculations, November2007090387 www.eMarketer.com090387Over time, people do tend to enter more complex search queries. Indata comparing the average number of keywords per query in July2004 with July 2006, one- and two-word queries both decreased,while more Internet users went to three-or-more-word queries. Search Engine Marketing 26
  • 27. People Who SearchWhen marketers look at the growing size of user search queries, The details involved in effective search marketing become evenalong with the tendency to approach any subject with various more complex when the time of day, day of week and time of yearspellings and perspectives, their need for large keyword are layered on top of keyword bidding; potential factors such asinventories expands. According to the US chain retailers, catalog geotargeting; and the tracking needed—based on each keyword’scompanies, Web-only merchants and consumer brand bid and ranking at a particular moment—if the user clicks on themanufacturers who responded to an Internet Retailer survey, ad linked to the search term.45.2% of the 245 respondents maintained keyword inventories of501 or more words. Why Do People Search? The Internet is the tell-me-more medium—the world’s largestSize of Pay-per-Click Keyword Inventory according to library, mall and local pub or schoolyard rolled into one. What doUS Retailers, March 2007 (% of respondents) people want to know more about? Those Web site categories that<50 words 25.1% gained the greatest share of visitors directly from search engines51-100 words 11.5% included education, health and medical, food, and beverage and music, according to Hitwise data.101-200 words 8.5%201-250 words 6.4% Top Vertical Categories Ranked by Percent of US 251-500 words 3.4% Internet Users Whose Visits Came from Search Engines, September 2007*501-750 words 8.5% 1. Education 44.64% 751-1000 words 3.0% 2. Health and medical 44.43%1001-5000 words 12.8% 3. Food and beverage 39.74% 5001-10000 words 6.0% 4. Music 39.16%10000+ words 14.9% 5. Community 34.73%Note: n=245; numbers may not add up to 100% due to roundingSource: Internet Retailer with WebSurveyor, April 2007 6. Travel 32.51%082618 www.eMarketer.com 7. Government 31.78%082618Similarly, a WebTrends survey found that 44% of search marketers 8. Shopping and classifieds 25.55%dealt with 1,000 or more keywords in each paid search campaign. 9. Aviation 24.85% 10. Automotive 23.75%Total Number of Keywords Used by US SearchMarketers in Their Paid Search Campaigns, April 2007 11. Lifestyle 23.19%(% of respondents) 12. News and media 20.89%<1,000 31% 13. Entertainment 20.81%1,000-10,000 22% 14. Gambling 20.63%10,000-75,000 9% 15. Business and finance 17.00% 75,000-200,000 6% 16. Computers and Internet 13.90%200,000+ 7% 17. Sports 9.84%Dont know 14% All categories 24.45%No answer 11% Note: *four weeks ending September 29, 2007 Source: Hitwise, October 2007 as cited in Advertising Age, "Search FactNote: n=132 Pack 2007," November 2007Source: WebTrends, "Paid Search Marketing Survey," provided to 090464 www.eMarketer.comeMarketer, May 8, 2007083799 www.eMarketer.com 090464083799 From the marketer’s point of view, people search to shop,Considering how keywords—and how much to bid on each— sometimes for pleasure and sometimes, as with health-relatedform just one part of search marketing’s front end, along with the items, for necessity.text of the ad and details of the linked landing page, this precedingresearch points to how search engine marketing is likely the mostcomplex form of advertising in any medium. Search Engine Marketing 27
  • 28. People Who SearchWhen people start to shop, a general search engine is the most- Select Methods by which US Online Buyers Accessedused online resource, more so for inexpensive than costly goods, Retail Web Sites, 2005 & 2007 (% of respondents)according to the October 2007 “Digital Consumer Behavior Study” E-Mail promotionfrom Avenue A-Razorfish. 45% 62%Most Likely Online Shopping Resource of US Internet Link from the merchantUsers for Beginning Product Research, by ProductCost, July 2007 (% of respondents) 24% 38%General search engine to see what comes up 54% Entering URL directly 45% 32% 24%Specific e-commerce site frequented or thought to specialize inthat type of product Bookmarks 15% 25% 15% 20%Web site of a known and established retail store Search engines 15% 15% 15% 13%Comparison shopping search engines to see the price up front 2005 2007 14% Source: Millard Group report as cited by DM News, September 13, 2007 14% 087431 www.eMarketer.comOther 087431 1% A similar 10% of Internet users cited search engines as their 2% primary outlet for learning about new products, according to anDo not use the Web for making purchase decisions Accenture report. 1% 8% Yet even though TV might be the first way most people hear about a new product, a search can readily follow down the line as people <$100 $1,000+ look for a place to purchase the item.Note: n=475; numbers may not add up to 100% due to roundingSource: Avenue A | Razorfish, "Digital Consumer Behavior Study," October2, 2007 Primary Means by which US Internet Users Find Out088153 www.eMarketer.com about New Products, January 2007 (% of respondents)088153 TV 34%However, as the shopping cycle continues, search may matter Word of mouth 20%less. In the 2007 version of a Millard Group report, only 13% of USonline buyers used a search engine to access a retail site. Prior Print ads 17%connections with the retailer, such as an e-mail promotion or a Internet search engines 10%merchant link, are far more used. Of course, the initial contact Manufacturer Web sites 4%used to create that connection might very well have come from a Internet advertising 3%consumer search. Retail Web sites 3% Radio 2% Note: n=602 Internet users ages 18+ Source: Accenture, "Retail & CGS Innovation Survey: US Results," provided to eMarketer, April 4, 2007 083391 www.eMarketer.com 083391 Search Engine Marketing 28
  • 29. People Who SearchWhen people do use search engines to shop, they most typically No wonder, too, that search engine optimization will receivesearch for company sites, best prices and information, or at least increased attention and spending, considering how 18.1% ofthat was the case for the online mothers surveyed by DoubleClick retailers say that 10% or more of search engine shoppers visitPerformics, Microsoft and ROI Research. their sites as the result of a natural search listing.Select Uses of Search Engines according to US Online Percent of Search Engine Shoppers Who Visit RetailFemales with Children, July 2007 (% of respondents) Web Sites through a Natural Search according to US Retailers, March 2007 (% of respondents)To find specific manufacturer/product Web sites 85% 0.0%-1.0% 12.3%To find the best price for a product/service 1.1%-2.0% 14.8% 72% 2.1%-4.0% 17.3%To gather information before marking an online purchase 4.1%-6.0% 6.6% 70% 6.1%-8.0% 8.6%To find out where to purchase offline 64% 8.1%-10.0% 2.5%To further learn about a product/service after seeing an 10.1%-15.0% 7.4%advertisement 15.1%+ 10.7% 64% Dont know 19.8%To gather information before marking an offline purchase 57% Note: n=245; numbers may not add up to 100% due to rounding Source: Internet Retailer with WebSurveyor, April 2007Note: n=991 female Internet users with at least one child ages 18 or 082615 www.eMarketer.comyounger living at home; respondents were asked to indicate, on a five pointscale, how strongly they agree or disagree with these statements; results 082615are a summary of the "agree" responses Surprisingly, perhaps, people search not only for high-Source: DoubleClick Performics, Microsoft, ROI Research, "Searcher Moms:A Search Behavior and Usage Study," provided to eMarketer, August 21, consideration products, such as cars or high-definition TVs, but2007 also for consumer packaged goods (CPG) such as baby products,086752 www.eMarketer.com086752 food, personal care items and household goods. For low-costIn fact, among all the age groups polled by Deloitte & Touche, items such as these, greater involvement tends to link search andsearch engine results were more likely to lead to site visits than site visits, as shown in research from comScore, Procter & Gambleany other form of advertising, including word of mouth, TV and Yahoo! That’s why 60% of unique visitors to baby product sitescommercials and display ads on other sites. So it’s no wonder that used search versus only 23% for household product sites, since40% of total Internet spending goes to paid search advertising. shopping for young children is far more important than buying the latest detergent.Types of Advertising that Cause US Consumers toVisit Web Sites, by Age, February 23, 2007-March 6, US Internet Users Who Use Search to Reach CPG Web2007 (% of respondents in each group) Sites, by Category, February-April 2007 (millions and % Millennials Gen X Baby Matures All of unique category visitors) 13-24 25-41 boomers 61-75 13-75 Unique Unique % of unique 42-60 visitors visitors visitors that used that usedResult from using Internet 84% 87% 83% 81% 84% search searchsearch engines to reach to reachSomeones 85% 85% 79% 76% 82% category site category siterecommendation Baby products 26.0 15.7 60%Seeing ad on TV 64% 66% 67% 62% 65% Food products 93.7 43.8 47%Seeing ad in print 56% 66% 67% 67% 64% Personal care 35.9 9.8 27%(newspaper or productsmagazine) Household 7.3 1.7 23%Seeing ad at other Web 55% 59% 54% 50% 55% productssitesSales or product offers 41% 58% 58% 59% 54% Source: comScore, Inc., Search Engine Marketing Professional Organizationreceived in the mail (SEMPO), Procter & Gamble and Yahoo!, "The Digital Shelf: the Opportunity for Search Marketing in Consumer Packaged Goods" as cited in pressHearing an ad on the radio 46% 56% 48% 41% 49% release, October 23, 2007 088709 www.eMarketer.comNote: n=2,200 ages 13-75Source: Deloitte & Touche, "State of the Media Democracy" conducted by 088709Harris Group, provided to eMarketer, August 2007086527 www.eMarketer.com086527 Search Engine Marketing 29
  • 30. People Who SearchAmong visitors to CPG sites, those who used search to get there Effectiveness of Online Search and Displaycited information, help and purchase decisions more than did Advertising Campaigns in Converting US Onlinenon-searchers. Promotions were stronger drivers for those who Researchers to In-Store Buyers, 2007 (% change in conversions)did not use search engines. The implications, at least for low-cost,generally low-consideration goods, then, is that search campaigns Consumers who saw a joint display and search campaign and subsequently made an in-store purchasemight be more effective when linked with information that helps 43%people make better purchase decisions than with special offers or Consumers who saw a search campaign and subsequently madeother promotional deals. an in-store purchase 26%Reasons that US Search and Non-Search Users Visit Consumers who saw a display campaign and subsequently madeCPG Web Sites, February-April 2007 (% of an in-store purchaserespondents) 6% Searchers Non-searchers Note: The purchasing behavior of more than 175,000 comScore panelistsInformation and help 73% 58% was compared over a period of eight months-an unexposed control groupFind more information about products 48% 36% and a group who had been exposed to ads from five major retailers Source: comScore Networks Inc. and Yahoo!, "From Clicks to Bricks: TheLearn about new products 44% 38% Impact of Online Pre-Shopping on Consumer Shopping Behavior" as citedCompare competitive products 26% 10% in press release, July 30, 2007 086196 www.eMarketer.comPurchase decision 64% 44% 086196Help me make a purchase decision 40% 28% And the CPG research from comScore found that consumers whoGet/compare products 36% 23% searched tended to spend more offline on those goods than thoseFind where to buy/local places 31% 15%Promotion 47% 59% who didn’t search. Of course, the mere fact of the search indicatesFind out about special offers 40% 47% greater intent on the user’s part and therefore might indicateSee official company Web site 29% 22% greater tendency to purchase, too.Note: Searchers are those Internet users who used search engines to findthe CPG sites Amount that US Search and Non-Search Users SpendSource: comScore, Inc., Search Engine Marketing Professional Organization Offline on CPG Products, by Category, February-April(SEMPO), Procter & Gamble and Yahoo!, "The Digital Shelf: the Opportunityfor Search Marketing in Consumer Packaged Goods" as cited in press 2007release, October 23, 2007 Searchers Non-searchers088711 www.eMarketer.com Household products $62.56 $52.09088711 Baby products $52.19 $46.36Not all searches are part of online-only endeavors, of course. Food products $51.91 $41.69Research from comScore and Yahoo! found that 43% of in-store Personal care products $40.30 $32.34buyers were influenced by a combination of online display and Note: Searchers are those Internet users who used search engines to findsearch ads. Even 26% of in-store buyers were inspired to hand the CPG sites Source: comScore, Inc., Search Engine Marketing Professional Organizationover their credit cards because of a paid search campaign. (SEMPO), Procter & Gamble and Yahoo!, "The Digital Shelf: the Opportunity for Search Marketing in Consumer Packaged Goods" as cited in press release, October 23, 2007 088713 www.eMarketer.com 088713 However, the effectiveness of all searches, whether paid or organic, is founded on being relevant. Therefore, it’s a warning to hear that 73% of US college students—people who tend to be both more impressionable and more cynical than older users—do not click on search engine sponsored links because they are irrelevant. Search Engine Marketing 30
  • 31. People Who SearchThe importance of smart keyword bidding and relevant landingpages associated with each keyword is emphasized by a surveyfrom William Blair & Co.Reasons that US College Students Do Not Click onSearch Engine Sponsored Links,September-November 2006 (% of respondents)Irrelevance 73%Trust 16% Not looking to buy anything 9%Just dont 12% N/A 4%Note: ages 18-22Source: William Blair & Company, "Millennials Survey," July 11, 2007085793 www.eMarketer.com085793For more information about overall US ad spending, readeMarketer’s “US Advertising Spending” report athttp://www.emarketer.com/Reports/All/Emarketer_2000442 Search Engine Marketing 31
  • 32. Related Information and Links About eMarketerRelated Links eMarketer is "The First Place to Look" forCompetehttp://compete.com market research and trend analysis on Internet, e-business, online marketing, media andcomScorehttp://www.comscore.com emerging technologies. eMarketer aggregatesForrester Research and analyzes information from over 2,800http://www.forrester.com sources, and brings it together in analyst reports,Hitwise daily research articles and the mosthttp://www.hitwise.com comprehensive database of e-business andNielsen//NetRatings online marketing statistics in the world.http://www.nielsen-netratings.com A Trusted ResourceContact eMarketer serves as a trusted, third-party resource, cuttingeMarketer, Inc. Toll-Free: 800-405-0844 through the clutter and hype–helping businesses make sense of75 Broad Street Outside the US: 212-763-6010 the e-business numbers and trends. eMarketers products and32nd floor Fax: 212-763-6020 services help companies make better, more informed businessNew York, NY 10004 sales@emarketer.com decisions by:Report Contributors ■ Streamlining e-business research sources and reducing costsMike Chapman Editorial Director ■ Eliminating critical data gapsJoanne DiCamillo Production ArtistDana Hill Production Artist ■ Providing an objective, bird’s eye view of the entireJames Ku Data Entry Associate e-business landscape and Production ArtistYael Marmon Director of Research ■ Better deploying and sharing information across the companyDaniel McMahon Copy Editor ■ Building solid business cases backed up by hard dataHilary Rengert Senior Researcher and Production Artist ■ Reducing business riskAllison Smith Senior Editor ■ Saving valuable timeTracy Tang Senior Researcher To learn more about subscriptions to eMarketer, call 800-405-0844 (outside the U.S. and Canada, call 001-212-763-6010), or e-mail sales@emarketer.com. Search Engine Marketing 32