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E marketer SEM

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  • 1. Executive Summary: Search marketing depends critically on its audience—where people are clicking,money will follow.That is why search engines compete for the user’s goodwill,whether it be with more relevant and complete search 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 one company, Google, dominates the market. It draws far more search users and search requests—and therefore search ad revenues—than all its rivals put together.An eMarketer estimate shows Google raking in 75% of US paid search advertising in 2007, up from 60% in 2006.With No. 2 Yahoo! collecting a mere 9% share, the rest split 16% of the pie. But with over $8.6 billion going to search engine advertising in 2007, that 16% stake equals nearly $1.4 billion.And with search spending nearly doubling to almost $16.6 billion in 2011—and still the biggest form of online advertising—even relatively small slices can represent significant revenues. Key Questions ■ What factors contribute most to search marketing spending? ■ Why will emphasis on search engine optimization increase in the next few years? ■ How can marketers better understand the search audience? ■ What do people think about search engine results? ■ In what ways do search and privacy intersect? How does that affect marketers? Search Engine Marketing: User and SpendingTrends January 2008 David Hallerman, Senior Analyst dhallerman@emarketer.com US Online Advertising Spending, by Format, 2006-2011 (millions) 2006 2007 2008 2009 2010 2011 Search $6,799 $8,624 $11,000 $12,935 $14,906 $16,590 Display ads $3,685 $4,687 $5,913 $6,663 $7,500 $8,190 Classified $3,059 $3,638 $4,675 $5,493 $6,281 $6,930 Rich media/video $1,192 $1,755 $2,613 $3,575 $4,463 $5,481 Lead generation* $1,310 $1,733 $2,269 $2,795 $3,281 $3,675 E-Mail $338 $428 $481 $553 $600 $630 Sponsorships $496 $535 $550 $488 $469 $504 Total $16,879 $21,400 $27,500 $32,500 $37,500 $42,000 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; online ad data includes categories as defined by IAB/PwC benchmark—display ads (such as banners), search ads (including paid listings, contextual text links and paid inclusion), rich media (including video), classified ads, sponsorships, referrals (lead generation) and e-mail (embedded ads only); excludes mobile ad spending; *also called referrals Source: eMarketer, October 2007 088301 www.eMarketer.com The First Place to Look Copyright ©2008 eMarketer, Inc. All rights reserved. The eMarketer View 2 Search Ad Spending 4 Comparative Estimates: Search Marketing 6 Search Spending by Type 8 People Who Search 10 Related Information and Links 32 About eMarketer 32
  • 2. Search Engine Marketing 2 The eMarketer View 090505 The spectacular gains for US search advertising spending over 10 years, rising from less than $300 million in 2001 to almost $16.6 billion in 2011, represent a rare phenomenon in marketing— namely, that of considerable customer satisfaction. Generally, Internet users see paid search and contextual advertising as sufficiently relevant and non-intrusive.That approval, or at least tolerance, is why so many people click on these ads and why advertisers increasingly spend to woo their clicks. Search marketing is all about consumers.And where they go the money follows.Search marketing can be likened to the Zen parable about the tree falling in the forest:If no one hears it,does it make a sound? In the same fashion,if a search engine serves up a text-link ad and no one clicks on it,does it still make someone money? The central position of the search audience in monetizing search marketing means that the search engines and the advertisers both rely on the user’s goodwill. Another factor supporting search ad spending is what happens after the click. Since advertisers can more readily track the results of a search marketing campaign than one using online display advertising, search can become self- supporting, especially for retailers, with the cost of each click translating to cost-plus-X dollars in sales. Also contributing to search spending growth are brand marketers and the relationship consumers have with brands.When an offline ad campaign drives awareness,even if only partially,many people tend to search online to find out more about the product or service. Therefore,brand marketers need to factor search advertising into their overall campaigns to support efforts in other media. Besides advertising, the other side of search marketing is search engine optimization (SEO), the process of modifying a Web site so that it ranks higher in the organic listings relative to relevant keywords. eMarketer estimates that in 2007 paid search ads alone contributed 62% to all of search engine marketing spending, with SEO spending contributing about 18% to the pie. By 2011, a greater focus on SEO will give it a nearly 23% share, while paid search spending will fall back to not quite 57% of the total. Further, SEO tends to be less expensive than paid search. Therefore, even small boosts in SEO spending relative to paid search can indicate larger changes in marketing effectiveness than might be indicated by dollars alone. Behind that spending shift is the recognition that, even though many people are willing to click on relevant paid search ads, they prefer organic listings. One survey of online retailers found 46% of respondents saying SEO performed best, compared with 37% who preferred the performance of pay-per-click ads. In addition,as brand advertisers increasingly make search a central component of their online campaigns,the need to see those brands with top natural rankings becomes ever more urgent. What do people think about search engine results? Surprisingly, it does not vary much depending on the degree of search usage, according to a Forrester Research study. For example, 59% of all respondents did not pay attention to paid search ads. Further, 36% did not trust search engine ads.That underscores the importance of increased SEO spending, which spreads the marketing message through non-ad-based listings. When viewed by the audience marketers look to reach, the 40% share of total online advertising dollars going to paid search can appear outlandish. In fact, relative to the time people spend using search engines, companies pour disproportionate sums into paid search ads compared to display ads on content sites. 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. Key eMarketer Numbers—Search Engine Marketing $16.6 billion US search advertising spending in 2011, up from $6.8 billion in 2006 11.3% US search advertising spending growth in 2011, down from 32.2% in 2006 $21.5 billion US search engine marketing spending in 2011, up from $8.2 billion in 2006 $4.9 billion US search engine optimization (SEO) spending in 2011, up from $1.4 billion in 2006 180.0 million US search engine users in 2011, up from 147.0 million in 2006 85.2% US search engine users as a percent of total Internet users in 2011, up from 80.8% in 2006 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 marketer's URL is indexed by a search engine; search engine marketing includes both advertising and non- advertising (non-media buy) components; the main search marketing component is search engine optimization (SEO), which includes those techniques used to create better placement in the natural, or organic, search results; search engine users defined as ages 3+; based on usage anytime during the year from all locations Source: eMarketer, January 2008
  • 3. Search Engine Marketing 3 The eMarketer View Of course, when search is effective, people find what they need and go away, and that greatly reduces the time spent on a site. But when content is effective, people want to stick around. Nevertheless, a 10-1 ratio between search and display dollars points to the weight of Internet search engine users in contrast to the brief time they spend searching. Keeping the customer satisfied will keep the search dollars flowing. Increasingly, consumer satisfaction with search—and usage of the data created each time consumers enter a search term—counts privacy as a valuable asset.The “Digital Footprints” report, released in December 2007 by the Pew Internet & American Life Project, showed that 39% of Internet users expressed concern about how much information about them was available online. However, only 21% of that segment also took steps to limit the amount of information available.All told, 57% of Pew respondents either had some worry about personal data, took steps to limit what was available, or both.This is the online population addressed by efforts such as Ask.com’s AskEraser option. Or, to view the same data another way, 60% of Internet users were not worried about how much information was available about them online, and a similar 61% did not bother to limit the amount of information that could be found about them online.This is the online population that might continue to be satisfied with Google or Microsoft, both of which hold on to search data for months. Still, data-privacy practices vary significantly at the five largest search engine companies (as shown in the chart from CNET’s News.com). Combine that with political concerns about how search engines use consumer data—as raised in congressional inquiries about the DoubleClick purchase—and AskEraser’s consumer-privacy controls will be just the tip of the iceberg. 090739 Depending on who you ask, Americans conduct between 50% (comScore) and 68% (Compete) of their searches on Google, with figures from Hitwise and Nielsen falling in between. Does Google’s dominance here imply that marketers should follow the audience by placing most of their paid search ad dollars on the search giant? Not necessarily so. Google’s greater popularity among the search audience is matched by its popularity among marketers.That causes most search keywords to get, by auction, higher per-click prices than at the other search engines.Therefore, just to be effective, a search marketing campaign needs to consider how spreading its ad budget among several search engines might give it greater reach at the same time, or perhaps even at a lower cost. Data Privacy Practices at the Five Largest Search Engine Companies, December 2007 (% of respondents) Ask AOL Google Microsoft Yahoo! Time data retained Hours 13 months 18 months 18 months 13 months Data deleted or anonymized? Deleted Deleted Partially anonymized Deleted Partially anonymized User info linked? No No No Yes Yes Behavioral targeting (BT)? No Yes No Yes Yes Give users ability to opt-out of BT? - Yes - No* No Note: *can opt-out of behavioral targeting on third-party sites but not on MSN.com Source: CNET News.com as cited in press release, December 12, 2007 090739 www.eMarketer.com
  • 4. Search Engine Marketing 4 The eMarketer View The Four Elements of Search Marketing The umbrella term “search engine marketing” covers four related but distinct kinds of marketing. Paid search advertising. These ads appear on search engine results alongside natural, or organic, listings when Internet users enter search queries.Typical paid search ads are labeled “sponsored links” (Google) or “sponsor results” (Yahoo!) or “sponsored sites” (MSN) or “sponsored results” (Ask).This search format represents the largest spending share of search engine marketing. Contextual advertising. These ads appear alongside related content on third-party publisher sites. Google is the largest seller of these text-link ads with its AdSense program.Yahoo! and MSN compete with their ContentMatch and Content Ads programs, respectively, while AOL’s recent purchase of Quigo puts it squarely in the contextual-ad game, too. While not necessarily initiated by search queries, contextual advertising is typically tabulated as part of search engine marketing. There are three key reasons for that. One, the vast majority of contextual ads are sold by search engines; two, these text-link ads are typically priced and placed by advertiser bids; and, three, unless a user clicks on a contextual ad, no money exchanges hands. Paid inclusion. This search marketing procedure consists of two main elements. One guarantees that a marketer’s URL is indexed by a search engine.The listing is determined by the engine’s search algorithms.The other, as defined by Forrester Research, is “the amount spent on submitting pages to paid directories (like Froogle or Yahoo! Shopping) for cataloging.” Search engine optimization (SEO). With this type of marketing, companies and their search agencies use various techniques to create better placement for their Web site and specific pages in the natural, or organic, search results.The best analogy to differentiate paid search ads from SEO is the difference between a media buy and public relations. And, as with most other forms of advertising, a paid search ad can have immediate results, while SEO typically takes months to bear fruit—if it even does—just as with most PR campaigns. Search Ad Spending The gains for US search advertising spending this decade are stunning, soaring from a mere $299 million in 2001 to nearly $6.8 billion only five years later in 2006. Projecting out five years after that, to 2011, all signs indicate even larger growth, rising to not quite $16.6 billion—nearly $10 billion more in that relatively brief timespan. Behind this gold rush is a rare phenomenon in marketing— namely, that of considerable customer satisfaction. Generally, Internet users see paid search and contextual advertising as relevant enough and non-intrusive.That acceptance is why people click on these ads and why advertisers increasingly spend to woo their clicks. Another factor supporting search ad spending is what happens after the click. Since advertisers can more readily track the results of a search marketing campaign than one using online display advertising, search can become self-supporting, especially for retailers, with the cost of each click translating to cost-plus-X dollars in sales.
  • 5. Search Engine Marketing 5 Search Ad Spending Other contributors to search spending growth are brand marketers and the relationship consumers have with brands. When an offline ad campaign drives awareness, even if only partially, many people tend to search online to find out more about the product or service.Therefore, brand marketers need to factor search advertising into their overall campaigns to support efforts in other media. Even if a user does not click on an ad, his or her seeing the ad is basically a free impression for the advertiser. 090470 As vast as search advertising spending might be, its growth is leveling off.After a 27.5% increase in 2008, annual growth will subside to around 10% by early next decade.The declining growth is due to several factors. One is the vast size of the US search market, in which even large dollar gains equate to smaller percentage gains.The other is the economic slowdown, which over time will reduce shopping—both for homes and smaller items—and therefore people will search and click less. 090472 Paid search reached a 40% share of total US Internet ad spending in 2004. Since then, and going forward, online advertisers have and will put about the same percentage into search. 090478 US Search Advertising Spending, 2001-2011 (millions) 2001 $299 2002 $927 2003 $2,543 2004 $3,850 2005 $5,142 2006 $6,799 2007 $8,624 2008 $11,000 2009 $12,935 2010 $14,906 2011 $16,590 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 marketer's URL is indexed by a search engine Source: eMarketer, January 2008 090470 www.eMarketer.com US Search Advertising Spending Growth, 2001-2011 (% change) 2001 175.3% 2002 210.5% 2003 174.3% 2004 51.4% 2005 33.5% 2006 32.2% 2007 26.8% 2008 27.5% 2009 17.6% 2010 15.2% 2011 11.3% 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 marketer's URL is indexed by a search engine Source: eMarketer, January 2008 090472 www.eMarketer.com US Search Advertising Spending, 2001-2011 (% of total online ad spending) 2001 4.2% 2002 15.4% 2003 35.0% 2004 40.0% 2005 41.0% 2006 40.3% 2007 40.3% 2008 40.0% 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 marketer's URL is indexed by a search engine Source: eMarketer, January 2008 090478 www.eMarketer.com
  • 6. Search Engine Marketing 6 Search Ad Spending To put that 40% share into context, note how no other online ad format contributes much more than half that amount. 088422 However,between 2008 and 2011,there will be greater growth for rich media and video ads and lead-generation advertising than for paid search.Those two online ad formats are relatively undeveloped compared to search,hence their higher growth rates. 088302 Comparative Estimates: Search Marketing Estimates for search advertising range widely. In 2008, for example, Forrester Research is at the low end (at $7.72 billion) and Piper Jaffray at the high end (at $15.50 billion). One reason for this divergence comes from how search advertising is defined and what elements get included. For example, some, such as Forrester, count SEO in their total search estimates. Although SEO is essential for search marketing, it is not a media buy, and therefore eMarketer does not regard SEO spending as ad spend. In these search advertising comparative estimates, such spending has been subtracted, where appropriate, to better compare apples to apples. 090487 US Online Advertising Spending, by Format, 2006-2011 (% of total online ad spending and billions) 2006 2007 2008 2009 2010 2011 Search 40.3% 40.3% 40.0% 39.8% 39.8% 39.5% Display ads 21.8% 21.9% 21.5% 20.5% 20.0% 19.5% Classified 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% Lead generation* 7.8% 8.15 8.3% 8.6% 8.8% 8.8% E-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% Total $16.9 $21.4 $27.5 $32.5 $37.5 $42.0 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; online ad data includes categories as defined by IAB/PwC benchmark—display ads (such as banners), search ads (including paid listings, contextual text links and paid inclusion), rich media (including video), classified ads, sponsorships, referrals (lead generation) and e-mail (embedded ads only); excludes mobile ad spending; *also called referrals Source: eMarketer, October 2007 088422 www.eMarketer.com US Online Advertising Spending Growth, by Format, 2006-2011 (% increase/decrease vs. prior year) 2006 2007 2008 2009 2010 2011 Rich media/video 18.7% 47.2% 48.9% 36.8% 24.8% 22.8% Lead generation* 74.0% 32.3% 30.9% 23.2% 17.4% 12.0% Search 32.2% 26.8% 27.5% 17.6% 15.2% 11.3% Classified 43.5% 18.9% 28.5% 17.5% 14.4% 10.3% Display ads 46.9% 27.2% 26.2% 12.7% 12.6% 9.2% Sponsorships -20.9% 7.9% 2.8% -11.4% -3.8% 7.5% E-Mail 34.6% 26.6% 12.4% 14.8% 8.6% 5.0% Total 34.6% 26.8% 28.5% 18.2% 15.4% 12.0% 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; online ad data includes categories as defined by IAB/PwC benchmark—display ads (such as banners), search ads (including paid listings, contextual text links and paid inclusion), rich media (including video), classified ads, sponsorships, referrals (lead generation) and e-mail (embedded ads only); excludes mobile ad spending; *also called referrals Source: eMarketer, October 2007 088302 www.eMarketer.com Comparative Estimates: US Search Advertising Spending, 2006-2011 (billions) Borrell Associates, July 2007 (1) eMarketer, January 2008 (2) Forrester Research, October 2007 (2) JPMorgan, January 2008 (2) Morgan Stanley, October 2006 (3) Oppenheimer & Co., September 2007 Piper Jaffray & Co., February 2007 PricewaterhouseCoopers, June 2007 (4) Veronis Suhler Stevenson, August 2007 (4) Note: includes both national and local search; (1) includes paid placement and contextual search advertising; (2) includes paid search (paid placement), contextual search, paid inclusion; excludes SEO; (3) search fees advertisers pay Internet companies to list and/or link their company site/domain name to a specific search word or phrase; (4) keyword search Source: Borrell Associates, provided to eMarketer, July 2007; eMarketer, January 2008; Forrester Research, "U.S. Online Marketing Forecast 2007 To 2012," October 2007; JPMorgan and company reports, "Nothing But Net," January 2008; Morgan Stanley, "US Internet Advertising Outlook, 2006-2010E," 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 New 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 2006 $8.13 $6.80 - $8.60 $6.68 $6.75 $9.90 $6.72 $7.74 2007 $10.32 $8.62 $6.15 $11.76 $8.62 $8.58 $13.06 $8.50 $10.17 2008 $12.35 $11.00 $7.72 $15.52 $10.90 $10.65 $15.50 $10.25 $12.79 2009 $13.79 $12.94 $9.72 $19.10 $13.40 $13.05 $17.68 $11.80 $15.66 2010 $14.25 $14.91 $11.58 $23.63 $15.79 - $19.75 $13.20 $18.31 2011 $13.24 $16.59 $14.07 $26.79 - - $21.52 $14.50 $20.87 090487 www.eMarketer.com
  • 7. Search Engine Marketing 7 Comparative Estimates: Search Marketing When it comes to spending increases, however, there is far less divergence.Among the nine researchers in the following chart, all but one (Forrester) see a slowly declining growth rate.And, even with that decline, all but one (Borrell) see positive year-over-year annual percentage changes. 090491 All researchers project that paid search will remain the dominant form of Internet ad spending in the next four years. However, in 2008 alone, those market shares diverge dramatically; Piper Jaffray believes search advertising will make up 52.6% of total Internet ad spending, whereas Veronis Suhler Stevenson forecasts search as having a 33.7% share. Varying methodologies concerning what elements get included in both search advertising and overall Internet advertising contribute greatly to these differences. 090493 Comparative Estimates: US Search Advertising Spending Growth, 2006-2011 (% change) Borrell Associates, July 2007 (1) eMarketer, January 2008 (2) Forrester Research, October 2007 (2) JPMorgan, January 2008 (2) Morgan Stanley, October 2006 (3) Oppenheimer & Co., September 2007 Piper Jaffray & Co., February 2007 PricewaterhouseCoopers, June 2007 (4) Veronis Suhler Stevenson, August 2007 (4) 2006 41.5% 32.2% - - 29.9% 31.3% 50.9% 30.7% 38.1% 2007 26.8% 26.8% - 36.8% 29.1% 27.0% 32.0% 26.5% 31.4% 2008 19.7% 27.5% 25.5% 31.9% 26.4% 24.2% 18.7% 20.6% 25.9% 2009 11.7% 17.6% 25.9% 23.1% 22.9% 22.5% 14.0% 15.1% 22.4% 2010 3.3% 15.2% 19.1% 23.7% 17.8% - 11.7% 11.9% 16.9% 2011 -7.1% 11.3% 21.5% 13.4% - - 9.0% 9.8% 14.0% 090491 www.eMarketer.com Note: includes both national and local search; (1) includes paid placement and contextual search advertising; (2) includes paid search (paid placement), contextual search, paid inclusion; excludes SEO; (3) search fees advertisers pay Internet companies to list and/or link their company site/ domain name to a specific search word or phrase; (4) keyword search Source: Borrell Associates, provided to eMarketer, July 2007; eMarketer, January 2008; Forrester Research, "U.S. Online Marketing Forecast 2007 To 2012," October 2007; JPMorgan and company reports, "Nothing But Net," January 2008; Morgan Stanley, "US Internet Advertising Outlook, 2006-2010E," 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 New 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 Comparative Estimates: US Search Advertising Spending As a Percent of Total Online Advertising Spending, 2006-2011 Borrell Associates, July 2007 (1) eMarketer, January 2008 (2) Forrester Research, October 2007 (2) Morgan Stanley, October 2006 (3) Oppenheimer & Co., September 2007 Piper Jaffray & Co., February 2007 PricewaterhouseCoopers, June 2007 (4) Veronis Suhler Stevenson, Note: includes both national and local search; (1) includes paid placement and contextual search advertising; (2) includes paid search (paid placement), contextual search, paid inclusion; excludes SEO; (3) search fees advertisers pay Internet companies to list and/or link their company site/domain name to a specific search word or phrase; (4) keyword search Source: Borrell Associates, provided to eMarketer, July 2007; eMarketer, January 2008; Forrester Research, "U.S. Online Marketing Forecast 2007 To 2012," October 2007; Morgan Stanley, "US Internet Advertising Outlook, 2006-2010E," 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 New 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 2006 33.7% 40.3% - 41.8% 40.0% 51.2% 40.0% 32.7% 2007 35.6% 40.3% 44.6% 43.8% 40.5% 52.9% 40.3% 33.3% 2008 36.5% 40.0% 41.7% 45.9% 41.0% 52.6% 40.7% 33.7% 2009 36.7% 39.8% 39.7% 48.0% 41.4% 52.1% 41.0% 34.0% 2010 35.3% 39.8% 37.1% 49.6% - 51.7% 41.0% 33.9% 2011 32.6% 39.5% 35.9% - - 51.2% 41.0% 33.7% 090493 www.eMarketer.com
  • 8. Search Engine Marketing 8 Search Spending by Type In 2007, paid search ads will contribute 62% to all search engine marketing spending, with SEO spending contributing about 18% to the pie. By 2011, however, a greater focus on SEO means that form of search marketing will represent nearly 23%, while paid search will fall back to not quite 57%. Behind that shift is the recognition that, even though most people are ready to click on relevant paid search ads, they prefer organic listings even more and tend to equate higher organic search rankings with better brands. Further, as brand advertisers increasingly make search a central component of their online campaigns, the need to see those brands with top natural rankings becomes ever more urgent. Contextual advertising will also expand in the next four years, moving up from a 14% share in 2007 to 17% in 2011.This spending swing will be due to two factors: one, better algorithms that more effectively target the context, creating more relevant ads, and, two, more Web publishers will look to bulk up their revenues by greater use of their ad inventory space. 090485 According to Forrester, a similar but more dramatic shift will occur in search marketing spending. However, the research firm sees paid search with only a 44% share in 2011, whereas SEO will contribute 33% to the whole. 090460 In dollar terms, the paid search market share will surpass $6.5 billion in 2007 and nearly double to almost $12.2 billion in 2011. Over the same period, spending for SEO and contextual advertising will more than double. Overall, search engine marketing spending will rise spectacularly from $10.6 billion in 2007 to $21.5 billion in 2011. 090480 US Search Engine Marketing Spending, by Type, 2006-2011 (% of total and millions) 2006 2007 2008 2009 2010 2011 Paid search advertising 63.5% 62.0% 61.2% 59.4% 58.0% 56.7% Contextual advertising 12.9% 13.9% 14.7% 15.5% 16.5% 16.9% Paid inclusion 6.3% 5.7% 4.8% 4.5% 3.9% 3.6% Search engine optimization (SEO) 17.4% 18.4% 19.3% 20.6% 21.6% 22.8% Total $8,229 $10,574 $13,625 $16,285 $19,006 $21,490 Note: Search engine marketing includes both advertising and non-advertising (non-media buy) components; 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 marketer's URL is indexed by a search engine; search engine optimization (SEO) includes those techniques used to create better placement in the natural, or organic, search results; numbers may not add up to 100% due to rounding Source: eMarketer, January 2008 090485 www.eMarketer.com US Search Marketing Spending Share, by Type, 2007-2012 (% of total and millions) 2007 2008 2009 2010 2011 2012 Paid search 56% 54% 53% 49% 44% 40% Paid inclusion 10% 10% 9% 8% 7% 7% Contextual ads 10% 10% 11% 12% 16% 18% SEO 24% 26% 27% 31% 33% 35% Total (millions) $8,056 $10,432 $13,310 $16,775 $20,993 $25,323 Note: paid search defined as amount spent on paid search media on search engines; paid inclusion defined as amount spent on submitting pages to paid directories (like Froogle orYahoo! Shopping) for cataloging; contextual ads defined as amount spent buying contextual ads across content sites in different search engine or aggregator networks; SEO defined as search engine optimization, or amount spent for techniques to boost natural or organic rankings for various keywords Source: Forrester Research, "U.S. Online Marketing Forecast 2007 To 2012," October 2007 as cited in Advertising Age, "Search Marketing Fact Pack 2007," November 2007; eMarketer calculations, December 2007 090460 www.eMarketer.com US Search Engine Marketing Spending Growth, by Type, 2006-2011 (millions) 2006 2007 2008 2009 2010 2011 Paid search advertising $5,222 $6,554 $8,333 $9,675 $11,031 $12,194 Contextual advertising $1,061 $1,466 $2,008 $2,522 $3,130 $3,633 Paid inclusion $517 $604 $660 $737 $745 $763 Search engine optimization (SEO) $1,430 $1,950 $2,625 $3,350 $4,100 $4,900 Total $8,229 $10,574 $13,625 $16,285 $19,006 $21,490 Note: Search engine marketing includes both advertising and non-advertising (non-media buy) components; 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 marketer's URL is indexed by a search engine; search engine optimization (SEO) includes those techniques used to create better placement in the natural, or organic, search results; numbers may not add up total due to rounding Source: eMarketer, January 2008 090480 www.eMarketer.com
  • 9. Search Engine Marketing 9 Search Spending by Type The Forrester perspective shows a similar curve, with total search marketing at only $8.1 billion in 2007 and $21 billion in 2011.The 2012 projection shows a steep jump, however, rising to over $25.3 billion by the end of that year. 090457 In comparing the eMarketer and Forrester Research growth rates, note the following. ■ 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 advertising to have reached their peak—at 38.2%—in 2007, Forrester sees up-and-down gains, with a 66.9% high in 2011. ■ The largest increase for SEO spending will happen in 2007, eMarketer projects, or in 2010, according to Forrester. 090484 090461 A greater spending shift to SEO relative to paid search is supported by research that shows people tend to click more on organic listings than ads. From the marketer perspective, or at least that of the retailer, paid search is used only somewhat more than natural search. 082606 However,an Internet Retailer survey of chain retailers,catalog companies,Web-only merchants and consumer brand manufacturers showed 46.1% of respondents saying SEO performed best compared with 37.3% for pay-per-click advertisements. US Search Marketing Spending, by Type, 2007-2012 (millions) 2007 2008 2009 2010 2011 2012 Paid search $4,496 $5,633 $7,054 $8,220 $9,237 $10,129 Paid inclusion $818 $1,043 $1,198 $1,342 $1,469 $1,773 Contextual ads $838 $1,043 $1,464 $2,013 $3,359 $4,558 SEO $1,904 $2,712 $3,594 $5,200 $6,928 $8,863 Total $8,056 $10,432 $13,310 $16,775 $20,993 $25,323 Note: paid search defined as amount spent on paid search media on search engines; paid inclusion defined as amount spent on submitting pages to paid directories (like Froogle orYahoo! Shopping) for cataloging; contextual ads defined as amount spent buying contextual ads across content sites in different search engine or aggregator networks; SEO defined as search engine optimization, or amount spent for techniques to boost natural or organic rankings for various keywords Source: Forrester Research, "U.S. Online Marketing Forecast 2007 To 2012," October 2007 as cited in Advertising Age, "Search Marketing Fact Pack 2007," November 2007 090457 www.eMarketer.com US Search Engine Marketing Spending Growth, by Type, 2007-2011 (% change) 2007 2008 2009 2010 2011 Paid search advertising 25.5% 27.1% 16.1% 14.0% 10.5% Contextual advertising 38.2% 36.9% 25.6% 24.1% 16.1% Paid inclusion 16.8% 9.3% 11.7% 1.1% 2.4% Search engine optimization (SEO) 36.4% 34.6% 27.6% 22.4% 19.5% Total 28.5% 28.9% 19.5% 16.7% 13.1% Note: Search engine marketing includes both advertising and non-advertising (non-media buy) components; 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 marketer's URL is indexed by a search engine; search engine optimization (SEO) includes those techniques used to create better placement in the natural, or organic, search results Source: eMarketer, January 2008 090484 www.eMarketer.com US Search Marketing Spending Growth, by Type, 2008-2012 (% change) 2008 2009 2010 2011 2012 Paid search 25.3% 25.2% 16.5% 12.4% 9.7% Paid inclusion 27.5% 14.9% 12.0% 9.5% 20.7% Contextual ads 24.5% 40.4% 37.5% 66.9% 35.7% SEO 42.4% 32.5% 44.7% 33.2% 27.9% Total 29.5% 27.6% 26.0% 25.1% 20.6% Note: paid search defined as amount spent on paid search media on search engines; paid inclusion defined as amount spent on submitting pages to paid directories (like Froogle orYahoo! Shopping) for cataloging; contextual ads defined as amount spent buying contextual ads across content sites in different search engine or aggregator networks; SEO defined as search engine optimization, or amount spent for techniques to boost natural or organic rankings for various keywords Source: Forrester Research, "U.S. Online Marketing Forecast 2007 To 2012," October 2007 as cited in Advertising Age, "Search Marketing Fact Pack 2007," November 2007; eMarketer calculations, December 2007 090461 www.eMarketer.com Type of Search Engine Marketing Used by US Retailers, March 2007 (% of respondents) Note: n=245; numbers may not add up to 100% due to rounding Source: Internet Retailer with WebSurveyor, April 2007 082606 www.eMarketer.com Both equally 26.1% More natural search than paid search 34.7% More paid search than natural search 39.2%
  • 10. Search Engine Marketing 10 Search Spending by Type Considering, too, how SEO tends to be less expensive than paid search, then even small boosts in SEO spending relative to paid search can indicate a larger shift in marketing effectiveness than might be indicated by dollars alone. 082609 People Who Search How much do advertisers spend for paid search relative to the audience for those ads? Viewed by the people marketers look to reach, the 40% share for paid search can appear outlandish. In fact, when it comes to paid search advertising, there is an extreme disconnect between the 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 counterintuitive, especially for traditional marketers. That’s all to say that, relative to the time people spend using search engines, companies pour disproportionate sums into paid search ads compared to display ads on content sites.According to ongoing research from the Online Publishers Association (OPA) and Nielsen//NetRatings, US Internet users in 2007 will spend less than 5% of their online time using search versus nearly 50% of their time on content sites. 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. Best Performing Type of Search Engine Marketing for Conversion Rates according to US Retailers, March 2007 (% of respondents) Note: n=245; numbers may not add up to 100% due to rounding Source: Internet Retailer with WebSurveyor, April 2007 082609 www.eMarketer.com Both equally 16.6% Natural search engine optimization 46.1% Pay-per-click 37.3% Average Share of Time US Internet Users Spend Online, by Site Category, Q1 2006-Q2 2007 (% of total) Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 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
  • 11. Search Engine Marketing 11 People Who Search But, to the point of this report, the increase in paid search spending per search hour does not come close to the overall Internet ad spending gain of 26.8% for 2007.The audience is far ahead of the advertiser. 090740 Who is the audience for search engines and the advertisers who love them? The following sections help paint a fuller picture of the search audience by answering these questions: ■ Who searches? ■ How many people search? ■ How often do they search? ■ Where do people search? ■ 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 from Nielsen//NetRatings indicated that searchers were much like Internet users in general, except for some salient differences. For example,while 20% of the online population was younger than 18,a lower percentage used each of the five search engines included.Similarly,while 28% of the online population was between 35 and 49,a higher percentage used the five search engines. However, household income and gender among search engine users more or less tracked the overall figures for each category shown. 082314 What do people think about search engine results? Surprisingly, user responses do not vary much according to the degree of usage, Forrester Research found. Advertising Dollars Spent per Hour of US Consumer Internet Usage*, by Type, 2006 & 2007 Paid search spending** per search hours $4.76 $5.07 Total Internet ad spending per total hours $0.79 $0.78 Display ad spending*** per content hours $0.55 $0.49 2006 2007 Note: based on eMarketer ad spending estimates divided by total time spent online by site category (Online Publishers Association and Nielsen//NetRatings), with the last reported month for Internet usage as October 2007; *consumer usage for Internet content sites (display), search sites (paid search) and total time spent online; **includes paid search ads only on search engines and excludes contextual advertising and paid inclusion; ***includes static display ads, rich media and video ads Source: eMarketer, December 2007; Online Publishers Association and Nielsen//NetRatings, December 2007 090740 www.eMarketer.com Demographic Profile of US Search Engine Users, by Search Engine, October 2006 Unique users (millions) Audience reach Gender Male Female Age <18 18+ 18-21 21-34 35-49 50-64 65+ Household Income <$25,000 $25,000-$49,999 $50,000-$74,999 $75,000-$99,999 $100,000-$149,000 $150,000+ No response Google 93.0 59% 50% 50% 18% 82% 4% 17% 33% 22% 6% 5% 19% 27% 21% 17% 9% 2% Yahoo! 55.1 35% 49% 51% 13% 87% 3% 18% 34% 25% 7% 6% 22% 28% 19% 16% 8% 1% MSN 40.2 25% 48% 52% 12% 88% 3% 14% 35% 28% 8% 5% 21% 27% 20% 16% 9% 2% Ask.com 38.8 24% 47% 53% 17% 83% 3% 15% 33% 25% 7% 8% 24% 26% 19% 14% 7% 2% AOL 25.3 16% 43% 57% 14% 86% 3% 12% 31% 28% 13% 6% 22% 26% 19% 17% 10% 1% Online Population 157.1 100% 48% 52% 20% 80% 4% 17% 28% 23% 9% 6% 23% 27% 19% 16% 8% 3% Source: Nielsen//NetRatings appearing in Piper Jaffray & Co., February 2007 082314 www.eMarketer.com
  • 12. Search Engine Marketing 12 People Who Search For example—and this points to the importance of increased spending on SEO—59% of all respondents to Forrester’s study said they did not pay attention to paid search ads. Further, 36% did not trust search engine ads.Though it cannot be deduced from this figure that 64% of search engine users do trust those ads, it would seem that there is more trust than not. 082203 Even if search ads are not central for most search users,the search engines themselves get high grades from US consumers.In a Harris Interactive poll from July 2007,84% of respondents cited search engines for good customer service,topped only by supermarkets. However, the term “customer service” is likely used broadly here, since one would guess that the vast majority of people who have used a search engine have never actually spoken with or e-mailed the people running that engine. Most probably, these results imply that people like what they get from search sites. 086389 Looking specifically at search engines and portals, the American Customer Satisfaction Index (ACSI) research for 2007 showed that only Yahoo! and Google got ranked higher than average on its 100- point scale. 086448 Attitudes of Search Engine Users in North America toward Search Results, by Frequency of Search Engine Usage, Q2 2006 (% of respondents) I don't pay attention to the advertise- ments that appear around search results There seem to be more advertisements on search engines now compared with last year I don't trust search engine advertisements Search engine advertisements are less relevant now compared with last year When I see a search advertisement featuring a brand I recognize, I think more highly of that brand I often find the advertisements just as relevant as the search results I often click on the advertisements that appear next to the results Occa- sion- ally* 62% 54% 38% 19% 13% 11% 10% Moder- ately** 63% 56% 38% 19% 13% 12% 11% Fre- quent- ly*** 62% 59% 38% 20% 15% 14% 13% All respon- dents 59% 51% 36% 18% 12% 11% 10% Note: *use search engines once a month to several times a month; **use search engines once a week to several times a week; ***use search engines daily Source: Forrester Research, December 2006 082203 www.eMarketer.com Customer Service Quality according to US Adult Consumers, by Industry, July 2007 (% of respondents) Good Bad Not sure or refused Supermarkets 92% 8% * Online search engines 84% 7% 9% Computer hardware companies 78% 14% 7% Hospitals 78% 20% 2% Banks 78% 22% * Computer software companies 77% 16% 8% Packaged food companies 77% 22% 1% Car manufacturers 72% 26% 1% Electric and gas utilities 71% 29% * Internet service providers 70% 24% 5% Investment and brokerage firms 70% 25% 5% Online retailers 69% 21% 11% Telephone companies 67% 32% 1% Airlines 61% 35% 4% Pharmaceutical and drug companies 60% 39% * Life insurance companies 57% 39% 4% Cable companies 48% 49% 2% Health insurance companies 39% 60% 1% Managed care companies (eg HMOs) 37% 57% 6% Oil companies 33% 66% 2% Tobacco companies 26% 72% 1% Note: n=1,010; numbers may not add up to 100% due to rounding; *<0.5% Source: Harris Interactive, "Harris Poll" as cited in press release, August 8, 2007 086389 www.eMarketer.com US Customer Satisfaction with Portals and Search Engines, 2002-2007 (based on a 100-point scale*) 2002 2003 2004 2005 2006 2007 Yahoo! 76 78 78 80 76 79 Google 80 82 82 82 81 78 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
  • 13. Search Engine Marketing 13 People Who Search Consumer attitudes about search—and the data created each time people enter a search term—increasingly count privacy as a valuable asset.The “Digital Footprints”report,released in December 2007 by the Pew Internet & American Life Project, studied the connections between online personal information and search.Though the report did not focus on search query data,it is a useful guide to understanding how much concern people have about their personal information and its availability on the Internet. Though 39% of respondents expressed concern about the degree of information about them available online, only 21% of that segment also took steps to limit the amount of information available.This was called the “Concerned and Careful” group. Another 17%, dubbed the “Confident Creatives,” may not have been worried but did limit the data connected with them. All told, 56% of respondents either had some worry about personal data, took steps to limit what was available, or both.This is the online population addressed by efforts such as Ask.com’s AskEraser option. Or,to view the same data another way,60% of Internet users were not worried about how much information was available about them online,and a similar 61% did not bother to limit the amount of information that could be found about them online.This is the online population that might continue to be very satisfied with Google orYahoo!,both of which hold on to search data for months. 090737 A demographic portrait of these Internet users shows a correlation between higher education and greater concern and care regarding personal information. Further, more women than men expressed anxiety about how much information about them might be available online. 090738 But perhaps the concerns regarding search privacy are not as pervasive as they might appear. US Adult Internet Users Who Are Concerned about Their Personal Information Being Available Online, December 2006 (% of respondents in each group) % of adult Internet users Worry about how much information is available about you online? Take steps to limit the amount of information available about you online? Concerned and careful (1) 21% Yes Yes Worried by the Confident creatives (3)wayside (2) 18% Yes No 17% No Yes Unfazed and inactive (4) 43% No No 090737 www.eMarketer.com Note: n=1,623 ages 18+; (1) defined as those who "fret about the personal information available about them online and take steps to proactively limit their own online data"; (2) defined as those who "despite being anxious about how much information is available about them, do not actively limit their online information"; (3) defined as those who "do not worry about the availability of their online data and actively upload content, but still take steps to limit their personal information"; (4) defined as those who "neither worry about their personal information nor limit the amount of information that can be found out about them online" Source: Pew Internet & American Life Project, "Digital Footprints: Online Identity Management and Search in the Age of Transparency," December 16, 2007 Gender Age Education Annual household income Internet experience Male Female 18-29 30-49 50-64 65+ Less than high school High school graduate Some college College graduate <$30,000 $30,000-$49,999 $50,000-$74,999 $75,000+ % with broadband at home Average number of years online Concerned and careful (1) 46% 54% 25% 46% 23% 6% 6% 26% 29% 39% 22% 24% 25% 29% 68% 9 Worried by the way- side (2) 46% 54% 20% 46% 28% 6% 8% 32% 27% 33% 21% 23% 20% 35% 63% 8 52% 48% 31% 44% 19% 5% 6% 30% 30% 34% 28% 27% 14% 31% 65% 8 UnfazedConfident creatives (3) and inactive (4) 50% 50% 21% 41% 28% 10% 7% 30% 27% 36% 22% 28% 18% 32% 60% 8 090738 www.eMarketer.com Demographic Profile of US Adult Internet Users Who Are Concerned about Their Personal Information Being Available Online, December 2006 (% of respondents in each group) Note: n=1,623 ages 18+; (1) defined as those who "fret about the personal information available about them online and take steps to proactively limit their own online data"; (2) defined as those who "despite being anxious about how much information is available about them, do not actively limit their online information"; (3) defined as those who "do not worry about the availability of their online data and actively upload content, but still take steps to limit their personal information"; (4) defined as those who "neither worry about their personal information nor limit the amount of information that can be found out about them online" Source: Pew Internet & American Life Project, "Digital Footprints: Online Identity Management and Search in the Age of Transparency," December 16, 2007
  • 14. Search Engine Marketing 14 People Who Search Only 27% of respondents in a Ponemon Institute survey commissioned by Vontu, a data-security company, cited search terms as a type of personal information whose loss or theft would concern them. 085452 Such concerns appear to be extremely colored by age, however. In the same Ponemon-Vontu survey, 34% of those ages 18 to 25 would be disturbed by the loss of search term data more than any other type. 085454 Types of Personal Information that US Consumers Are Most Concered about Losing via Theft or Data Loss, 2007 (% of respondents) Medical records 40% Pharmaceutical history 38% Credit card number 35% Debit card number 34% Social security number 33% Credit report (credit score) 27% Search terms on a search engine (eg Google) 27% Bank account/routing number 27% Tax return information 23% Court or legal history (including criminal record) 21% Note: n=786 Source: Vontu, “2007 Consumer Survey on Data Security” conducted by Poneman Institute, June 25, 2007 085452 www.eMarketer.com Types of Personal Information that US Consumers Are Most Concered about Losing via Theft or Data Loss, by Age, 2007 (% of respondents in each group) Search terms 34% 14% Debit card number 32% 46% Bank account/routing number 24% 42% Employment history 19% 7% Social security number 17% 41% Credit report 13% 29% Tax return information 11% 39% Movie (video) rentals 7% 45% Home (real estate) value 1% 30% Marital status 1% 19% 18-25 (n=111) 65+ (n=69) Note: includes responses with the maximum differences between younger and older respondents Source: Vontu, “2007 Consumer Survey on Data Security” conducted by Poneman Institute, June 25, 2007 085454 www.eMarketer.com
  • 15. Search Engine Marketing 15 People Who Search Earlier data indicated that AskEraser, or equivalent programs from other search engines, could win more users.The Center for Survey Research and Analysis at the University of Connecticut found that 60% of US adults somewhat or strongly opposed search engines permanently storing user search behaviors. 070847 Trust is limited.At least that’s true among the 51% of respondents who expressed some degree of apprehension that information collected by search engines would remain private. 070848 How Many People Search? Trust might be limited, but that has not held many back from searching.At least 155 million people in the United States used search engines in 2007.That group will rise by 25 million by 2011. 090496 In fact, search engine use is growing faster than overall Internet users and will continue along those lines.That means that even some portion of existing Internet users who do not search will start to. 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. US Adults' Opinions Regarding Whether or Not Search Engine Companies Should Permanently Store Users' Search Behaviors, February 2006 (% of respondents) Strongly support 13% Somewhat support 19% Somewhat oppose 27% Strongly oppose 33% Don't know/no answer 8% Note: n=800 Source: Center for Survey Research and Analysis at the University of Connecticut, February 2006 070847 www.eMarketer.com US Adults' Level of Confidence that Information Collected by Search Engine Companies Will Remain Private, February 2006 (% of respondents) Extremely confident 5% Very confident 8% Somewhat confident 34% Not too confident 30% Not confident at all 21% Don't know/no answer 2% Note: n=800 Source: Center for Survey Research and Analysis at the University of Connecticut, February 2006 070848 www.eMarketer.com US Search Engine Users, 2006-2011 (millions) 2006 147.0 2007 155.2 2008 161.9 2009 168.5 2010 174.9 2011 180.0 Note: ages 3+; based on usage anytime during the year from all locations Source: eMarketer, January 2008 090496 www.eMarketer.com US Search Engine User Growth vs. Total Internet User Growth, 2006-2011 (% change) 2006 8.7% 3.7% 2007 5.6% 3.4% 2008 4.3% 3.1% 2009 4.1% 3.2% 2010 3.8% 3.0% 2011 3.0% 2.5% Search engine users Internet users Note: ages 3+; based on usage anytime during the year from all locations Source: eMarketer, January 2008 090501 www.eMarketer.com
  • 16. Search Engine Marketing 16 People Who Search Perhaps more important for marketers is the penetration of search among the total US population, at more than 55% in 2008 and surpassing 60% in 2011. 090504 The OPA-Nielsen data showed a similar figure for search engine use, with 83.4% reach in the second quarter of 2007. However, more Internet users visited content and communications sites than those who searched.That greater reach on non-search sites is one reason for contextual ad programs and deals between search engines and social network sites. 090413 Counting search users by search engine sites finds Google at the top of the heap. However, while comScore’s qSearch 2.0 service said there were 142.1 million unique users on Google in September 2007, Nielsen Online’s MegaView Search service put that month’s figure at 105 million. The main reason for the difference is one of definition.The higher comScore data are based on what it calls “expanded search rankings.”That means the count includes not just what the company deems the five “core search engines” in the US—Google sites,Yahoo! sites, Microsoft sites, the Ask network and the Time Warner network—but also the following. ■ Partner search: searches initiated at partner sites that redirect the visitor to a search engine site. ■ Cross-channel search: multiple searches when employing more than one search tab (e.g.,Web, images, news) for a single search term. ■ Local search: maps, directions and local directory listings. ■ Major “vertical” search locations, such as eBay and Amazon in retail and Expedia in travel. US Search Engine Users As a Percent of Total Internet Users and Total Population, 2006-2011 2006 80.8% 51.4% 2007 82.5% 53.8% 2008 83.5% 55.6% 2009 84.2% 57.3% 2010 84.8% 59.0% 2011 85.2% 60.2% Total Internet users Total population Note: ages 3+; based on usage anytime during the year from all locations Source: eMarketer, January 2008 090504 www.eMarketer.com Average Web Site Reach among US Internet Users, by Site Category, Q1 2006-Q2 2007 (% of total users) Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Content 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 domains Source: Online Publishers Association (OPA) and Nielsen//NetRatings, "Internet Activity Index (IAI)," October 2007; eMarketer calculations, November 2007 090413 www.eMarketer.com
  • 17. Search Engine Marketing 17 People Who Search On the other side, Nielsen counts just search engine providers but does go beyond the five core sites. 090343 089458 With those different approaches to defining the search engine universe, not only does the number of people searching differ but growth rates differ as well. For example, while comScore pegged the September 2007 searcher growth at the Ask network at only 1.6%, Nielsen saw searcher growth at the core Ask.com site at a strong 10.5%. 090348 089485 How Often Do People Search? When it comes to consumer activity online, search is a mass of seeming contradictions. People do it often but not for too long. However, no matter what the age group, over 90% of US consumers use search engines or portals weekly, according to the “State of Media Democracy” survey from Deloitte & Touche. By conflating search and portals, however, those estimates offer fuzzy math. More likely, the questions labeled “seek personal interest information”—at 72% or higher—and “seek product reviews, conduct shopping research”—ranging from 53% to 74%—better represent the weekly search engine audience. Number of US Unique Searchers, by Search Engine Provider*, April-September 2007 (millions) Apr May Jun Jul Aug Sep Google 101.6 100.8 101.5 103.7 105.4 105.0 Yahoo! 57.6 57.6 59.6 61.2 61.1 60.0 MSN/Windows Live 41.3 38.9 49.0 57.6 48.2 44.8 AOL 23.8 22.7 23.8 23.5 22.8 23.1 Ask.com 15.9 16.7 18.3 17.1 17.0 18.8 Smarter Search 6.8 - 8.1 9.9 10.9 11.6 NexTag 9.2 7.9 10.2 10.6 10.9 10.0 MapQuest 7.2 7.5 7.9 8.1 7.2 7.6 Local.com 8.1 8.4 7.9 9.1 8.3 7.3 SBC Yellow Pages 7.7 7.5 8.6 - 7.2 6.8 Shopzilla - 6.4 - 7.2 - - Total unique searchers 131.4 130.9 133.0 135.8 135.4 134.7 Note: among home and work users; total among individual search engine providers is greater than total unique searchers since many unique searchers visit more than one search provider each month; *top 10 for each month Source: Nielsen Online, “MegaView Search," provided to eMarketer, November 2007; eMarketer calculations, November 2007 089458 www.eMarketer.com Number of US Unique Searchers, by Search Engine Provider, April-September 2007 (millions) Apr May Jun Jul Aug Sep Google sites 133.0 135.0 138.6 139.9 142.3 142.1 Yahoo! sites 97.8 99.3 101.6 104.1 103.8 102.1 Time Warner Network 81.8 83.6 85.2 85.4 83.8 79.8 Microsoft sites 65.3 64.6 67.2 69.9 68.8 65.2 Ask Network 39.5 40.4 43.4 43.6 42.8 43.5 Total Internet 179.4 182.9 184.8 184.6 184.9 184.9 Note: total among individual search engine providers is greater than total unique searchers since many unique searchers visit more than one search provider each month Source: comScore qSearch 2.0, "Expanded Search Report for the US," provided to eMarketer, November 2007 090343 www.eMarketer.com Growth of US Unique Searchers, by Search Engine Provider, May-September 2007 (% change) May Jun Jul Aug Sep Google sites 1.5% 2.6% 1.0% 1.7% -0.1% Yahoo! sites 1.6% 2.3% 2.5% -0.3% -1.6% Time Warner Network 2.2% 2.0% 0.2% -1.9% -4.8% Microsoft sites -1.1% 4.1% 4.0% -1.6% -5.1% Ask Network 2.3% 7.4% 0.6% -1.8% 1.6% Total Internet 1.9% 1.0% -0.1% 0.1% 0.0% Source: comScore qSearch 2.0, "Expanded Search Report for the US," provided to eMarketer, November 2007; eMarketer calculations, November 2007 090348 www.eMarketer.com Growth of US Unique Searchers, by Search Engine Provider*, May-September 2007 (% change) May Jun Jul Aug Sep Ask.com 5.5% 9.2% -6.4% -0.6% 10.5% Smarter Search - - 23.1% 10.1% 6.1% MapQuest 3.9% 5.4% 1.7% -10.5% 5.8% AOL -4.5% 4.9% -1.4% -2.7% 1.1% Google -0.8% 0.7% 2.2% 1.6% -0.4% Yahoo! 0.1% 3.5% 2.6% 0.0% -1.8% SBC Yellow Pages -2.4% 15.1% - - -5.1% MSN/Windows Live -5.7% 25.8% 17.6% -16.3% -7.1% NexTag -14.7% 29.3% 3.9% 2.7% -7.8% Local.com 4.8% -6.0% 14.6% -9.3% -11.2% Shopzilla - - - - - Total unique searchers -0.4% 1.6% 2.1% -0.3% -0.5% 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 089485 www.eMarketer.com
  • 18. Search Engine Marketing 18 People Who Search Note again that eMarketer puts search reach, and not just weekly reach, at 82.5% for 2007, while the OPA-Nielsen data for the second quarter of 2007 are 83.4%. 086517 In contrast, 68% of North American Internet users told Forrester Research that they used search engines once a week or more frequently. 082202 Among olderAmericans,search engine use is nearly as ubiquitous as e-mail use,according to Pew Internet & American Life Project research.This is another indicator of how marketers need to target search engine marketing at nearly all demographics. 087210 Where Do People Search? Though the comScore and Nielsen numbers disagree about how many people have been using search engines,there is more coherence regarding the share of users searching on specific sites. For example, looking just at September 2007, either 76.9% (comScore) or 77.9% (Nielsen) of unique searchers used Google. Similarly, either 35.3% or 33.2% used Microsoft sites or MSN/Windows Live, according to the two researchers. Online Activities Performed Weekly* according to US Consumers, by Age, February 23, 2007-March 6, 2007 (% of respondents in each group) Use search engines or portals Read about local news, weather or current events Read national/world news, weather or current events Seek personal interest information Check out new Web sites that have never visited before Purchase products Seek product reviews, conduct shopping research Read entertainment/celebrity news Research for work/school Read sports news/information Read travel/leisure information Millen- nials 13-24 94% 64% 59% 72% 72% 52% 53% 62% 85% 48% 33% Gen X 25-41 93% 88% 82% 77% 73% 78% 74% 69% 61% 54% 59% Baby boomers 42-60 91% 87% 81% 72% 75% 77% 73% 58% 52% 56% 59% Matures 61-75 90% 86% 88% 73% 70% 79% 70% 46% 30% 57% 63% All 13-75 92% 82% 77% 73% 73% 72% 69% 61% 59% 54% 54% Note: n=2,200 ages 13-75; *frequently/occasionally Source: Deloitte & Touche, "State of the Media Democracy" conducted by Harris Group, provided to eMarketer, August 2007 086517 www.eMarketer.com Internet Users in North America Who Use Search Engines, by Frequency, Q2 2006 (% of respondents) Daily 32% Several times a week 29% Once a week 7% Several times a month 14% Once a month 7% Less than once a month 7% Never 3% Source: Forrester Research, December 2006 082202 www.eMarketer.com Online Activities of US Older Adults and Seniors, 2006 & 2007 (% of respondents) E-Mail* Use a search engine** Search for maps or driving directions** Research hobbies or interests* News* Buy a product*** Visit state, local or federal government sites*** Travel purchase or reservations*** Get financial information*** Instant messaging*** Research spiritual or religious information* Upload and share photos*** Research family history or genealogy*** Rated a product, service or person using an online rating system** Play online games*** Used online classified sites, Craigslist*** Online auction*** Online auctions*** Sell products or services*** Download podcasts*** Create or work on personal Web page** Social networking*** 50-64 91% 90% 82% 77% 70% 69% 68% 61% 46% 36% 32% 30% 28% 28% 26% 23% 21% 19% 13% 12% 8% 4% 65+ 88% 74% 76% 62% 58% 50% 50% 48% 35% 28% 29% 35% 31% 22% 23% 16% 9% 11% 7% 4% 2% 1% Note: respondents answering if they had ever conducted the following activities online; *survey conducted in February-March, 2007; **survey conducted in December 2006; ***survey conducted in August 2006 Source: Pew Internet & American Life Project, "Usage Over Time," June 15, 2007 087210 www.eMarketer.com
  • 19. Search Engine Marketing 19 People Who Search Although shares differ for Yahoo!, the Time Warner network (mainly AOL) and Ask, those three, in addition to Google and Microsoft, get the greatest share of searchers. 090345 090316 In fact, among all types of Web sites—not just search—Google had the second greatest share of visits in September 2007, according to Hitwise. Other search sites that ranked highly in the entire US Web universe in that month included Yahoo! Search (seventh) and MSN Search (12th). 090324 Where Do Searchers Come From? Where Do They Go? Tracking where search engine visitors come from and where they go can help marketers understand patterns to improve their search advertising. Research from Hitwise indicates clear distinctions between upstream search engine visitors (the URL visited immediately before) and much more uniformity among downstream travels (the URL visited immediately after a search). For Google and Ask, the top 10 upstream sites delivered 37.7% and 43% of their October 2007 US visitors, respectively. However, for Yahoo! Search and MSN Search, their top 10 upstream sites were far more concentrated, delivering 73.5% and 80.7% of their October 2007 US visitors, respectively. Share of US Unique Searchers, by Search Engine Provider, April-September 2007 (% of total and millions) Apr May Jun Jul Aug Sep Google sites 74.2% 73.8% 75.0% 75.8% 77.0% 76.9% Yahoo! sites 54.5% 54.3% 55.0% 56.4% 56.1% 55.2% Time Warner Network 45.6% 45.7% 46.1% 46.2% 45.3% 43.1% Microsoft sites 36.4% 35.3% 36.4% 37.9% 37.2% 35.3% Ask Network 22.0% 22.1% 23.5% 23.6% 23.2% 23.5% Total Internet (millions) 179.4 182.9 184.8 184.6 184.9 184.9 Note: total percentage among individual search engine providers is greater than 100% since many unique searchers visit more than one search provider each month Source: comScore qSearch 2.0, "Expanded Search Report for the US," provided to eMarketer, November 2007 090345 www.eMarketer.com Most Popular Web Sites* in the US, Ranked by Market Share of Visits**, April-September 2007 Apr May Jun Jul Aug Sep MySpace 5.86% 6.22% 6.71% 6.33% 5.76% 5.17% Google 4.64% 4.77% 4.79% 4.80% 4.79% 5.03% mail.yahoo.com 4.27% 4.45% 4.35% 4.47% 4.67% 4.91% Yahoo! 4.04% 3.97% 4.17% 3.94% 3.84% 3.94% eBay 1.62% 1.59% 1.57% 1.57% 1.59% 1.81% mail.live.com - 0.33% 0.41% 0.51% 1.07% 1.75% search.yahoo.com 1.40% 1.48% 1.52% 1.56% 1.60% 1.68% MSN 1.69% 1.54% 1.54% 1.48% 1.56% 1.55% Hotmail 1.95% 1.85% 1.70% 1.64% 1.42% 1.00% Facebook 0.84% 0.92% 1.01% 1.03% 1.05% 0.96% YouTube 0.65% 0.75% 0.84% 0.77% 0.70% 0.69% search.msn.com 0.77% 0.73% 0.72% 0.62% 0.55% 0.56% images.google.com 0.53% 0.54% 0.50% 0.47% 0.44% 0.49% Gmail 0.34% 0.37% 0.37% 0.40% 0.43% 0.46% Wikipedia 0.42% 0.42% 0.37% 0.37% 0.38% 0.45% 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% www.pogo.com - - - - 0.32% 0.33% news.yahoo.com - - - - - 0.33% address.yahoo.com - - - - - 0.33% mail.myspace.com 3.76% 3.90% 4.34% 4.02% 3.52% - blog.myspace.com 0.42% 0.43% 0.45% 0.41% 0.36% - music.myspace.com 0.36% 0.40% 0.44% 0.36% - - Photobucket - - 0.35% - - - AOL 0.34% - - - - - Note: *top 20 for each month; **in September 2007 Source: Hitwise, "US Data Center," May-October 2007 090324 www.eMarketer.com Share of US Unique Searchers, by Search Engine Provider*, April-September 2007 (% of total and millions) Apr May Jun Jul Aug Sep Google 77.3% 77.0% 76.3% 76.4% 77.8% 77.9% Yahoo! 43.8% 44.0% 44.8% 45.0% 45.1% 44.6% MSN/Windows Live 31.4% 29.7% 36.8% 42.4% 35.6% 33.2% AOL 18.1% 17.3% 17.9% 17.3% 16.9% 17.1% Ask.com 12.1% 12.8% 13.7% 12.6% 12.6% 14.0% NexTag 7.0% 6.0% 7.6% 7.8% 8.0% 7.4% Local.com 6.1% 6.5% 6.0% 6.7% 6.1% 5.4% SBC Yellow Pages 5.8% 5.7% 6.5% - 5.3% 5.1% MapQuest 5.5% 5.7% 6.0% 5.9% 5.6% 5.7% Smarter Search 5.2% - 6.1% 7.3% 8.1% 8.6% Shopzilla - 4.9% - 5.3% - - Total unique searchers 131.4 130.9 133.0 135.8 135.4 134.7 Note: among home and work users; total among individual search engine providers is greater than 100% since many unique searchers visit more than one search provider each month; *top 10 for each month Source: Nielsen Online, “MegaView Search," provided to eMarketer, November 2007; eMarketer calculations, November 2007 090316 www.eMarketer.com
  • 20. Search Engine Marketing 20 People Who Search The percentages for downstream visits among all four search engines were far more alike, ranging from 13% to 14.8% among the top 10 sites in that same month. 090415 The largest share of Google visitors from August to October 2007 came from MySpace, the most-visited US Web site, according to Hitwise data (see previous section). However, many Google visitors also came from both Yahoo! and MSN, the next three sites, which implies that those two portals are not capturing enough of their own users when they’re ready to search. 090416 That the greatest share of Ask.com visitors came from Google in the three months shown implies the smaller search engine is a key second choice when people don’t find what they need on Google.That is something marketers should evaluate when considering which search engines to advertise on. 090432 In contrast, there’s far greater imbalance among visitors to Yahoo! Search and MSN Search.“Captive audience” might be one term to describe how more than 50% of Yahoo! Search visitors came from the main portal, while 67% or more of MSN Search visitors came from its portal. Top Six Upstream* Sites that US Internet Users Visit Immediately before Visiting Ask.com, Ranked by Visitor Share, August-October 2007 Aug Sep Oct Google (www.google.com) 12.25% 13.31% 13.67% MySpace (www.myspace.com) 9.38% 9.60% 8.70% Yahoo! (www.yahoo.com) 4.49% 4.33% 4.34% Yahoo! Search (search.yahoo.com) 4.00% 4.30% 4.16% Yahoo! Mail (mail.yahoo.com) 3.64% 3.53% 3.57% MSN (www.msn.com) 2.68% 2.65% 2.69% Total, top six 36.45% 37.72% 37.12% Note: *upstream sites are those visited immediately prior to individual search engine visit Source: Hitwise, provided to eMarketer, December 2007; eMarketer calculations, December 2007 090432 www.eMarketer.com Top Six Upstream* Sites that US Internet Users Visit Immediately before Visiting Google, Ranked by Visitor Share, August-October 2007 Aug Sep Oct MySpace (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 individual search engine visit Source: Hitwise, provided to eMarketer, December 2007; eMarketer calculations, December 2007 090416 www.eMarketer.com Total US Internet User Visitor Shares at the Top 10 Upstream and Downstream Sites*, by Search Engine, May-October 2007 May Jun Jul Aug Sep Oct Upstream Google (www.google.com) 37.8% 38.7% 37.3% 36.1% 37.1% 37.7% Ask (www.ask.com) 46.4% 44.9% 43.1% 43.1% 44.3% 43.0% Yahoo! Search (search.yahoo.com) 69.6% 69.0% 70.7% 72.8% 73.0% 73.5% MSN Search (search.msn.com) 72.2% 72.4% 76.4% 80.6% 81.5% 80.7% Downstream Ask (www.ask.com) 14.0% 13.7% 12.3% 12.3% 12.8% 13.0% Yahoo! Search (search.yahoo.com) 14.1% 14.5% 14.0% 13.8% 13.8% 13.7% MSN Search (search.msn.com) 16.8% 17.3% 16.1% 15.1% 14.9% 14.9% Google (www.google.com) 15.8% 15.7% 14.9% 14.9% 14.8% 14.8% Note: *upstream sites are those visited immediately prior to individual search engine visit; downstream sites are those visited immediately after individual search engine visit Source: Hitwise, provided to eMarketer, December 2007; eMarketer calculations, December 2007 090415 www.eMarketer.com
  • 21. Search Engine Marketing 21 People Who Search For search marketers, the implication here might be to accompany search ads on those two engines with display ads on the related portals, considering how many people go from one to the other. 090417 090431 Downstream activity—that is, where people go after leaving a search engine—is far more spread out than upstream traffic patterns.Therefore, sites that appear often on search results— notably Wikipedia and eBay—appear on the top six list for all four large search engines. 090433 090434 090435 Top Six Upstream* Sites that US Internet Users Visit Immediately before Visiting Yahoo! Search, Ranked by Visitor Share, August-October 2007 Aug Sep Oct Yahoo! (www.yahoo.com) 50.33% 50.36% 50.90% Yahoo! Mail (mail.yahoo.com) 10.64% 11.06% 11.13% MySpace (www.myspace.com) 4.23% 4.28% 3.97% My Yahoo! (my.yahoo.com) 2.02% 2.11% 2.20% Google (www.google.com) 1.11% 1.17% 1.20% eBay (www.ebay.com) - 1.08% 1.06% Yahoo! Image Search (images.search.yahoo.com) 1.32% - - Total, top 6 69.65% 70.06% 70.45% Note: *upstream sites are those visited immediately prior to individual search engine visit Source: Hitwise, provided to eMarketer, December 2007; eMarketer calculations, December 2007 090417 www.eMarketer.com Top Six Upstream* Sites that US Internet Users Visit Immediately before Visiting MSN Search, Ranked by Visitor Share, August-October 2007 Aug Sep Oct MSN (www.msn.com) 67.41% 69.28% 69.72% Windows Live Mail (mail.live.com) 1.06% 1.82% 2.55% MySpace (www.myspace.com) 1.86% 1.70% 1.63% Windows Live Hotmail (www.hotmail.com) 5.76% 3.97% 1.62% My MSN (my.msn.com) 1.07% 1.31% 1.29% MSN Image Search (search.msn.com/images) - - 0.98% Google (www.google.com) 0.94% 0.90% - Total, top six 78.10%78.97%77.80% Note: *upstream sites are those visited immediately prior to individual search engine visit Source: Hitwise, provided to eMarketer, December 2007; eMarketer calculations, December 2007 090431 www.eMarketer.com Top Six Downstream* Sites that US Internet Users Visit Immediately after Visiting Google, by Visitor Shares, August-October 2007 (% of total) Aug Sep Oct Google Image Search (images.google.com) 4.34% 4.45% 4.53% Wikipedia (www.wikipedia.org) 1.81% 2.12% 2.16% MySpace (www.myspace.com) 2.50% 2.17% 2.03% Gmail (www.gmail.com) 1.33% 1.35% 1.36% eBay (www.ebay.com) 1.03% 1.04% 1.03% Yahoo! Mail (mail.yahoo.com) - 0.81% 0.80% YouTube (www.youtube.com) 0.84% - - Total, top six 11.85% 11.94% 11.91% Note: *downstream sites are those visited immediately after individual search engine visit Source: Hitwise, provided to eMarketer, December 2007; eMarketer calculations, December 2007 090433 www.eMarketer.com Top Six Downstream* Sites that US Internet Users Visit Immediately after Visiting Yahoo! Search,Ranked by Visitor Share, August-October 2007 Aug Sep Oct MySpace (www.myspace.com) 3.43% 3.00% 2.82% Yahoo! Image Search (images.search.yahoo.com) 1.92% 1.98% 2.02% Wikipedia (www.wikipedia.org) 1.54% 1.76% 1.80% Google (www.google.com) 1.51% 1.59% 1.61% eBay (www.ebay.com) 1.19% 1.29% 1.32% Yahoo! Mail (mail.yahoo.com) 1.13% 1.16% 1.08% Total, top six 10.73% 10.79% 10.66% Note: *downstream sites are those visited immediately after individual search engine visit Source: Hitwise, provided to eMarketer, December 2007; eMarketer calculations, December 2007 090434 www.eMarketer.com Top Six Downstream* Sites that US Internet Users Visit Immediately after Visiting MSN Search, Ranked by Visitor Share, August-October 2007 Aug Sep Oct MySpace (www.myspace.com) 3.92% 3.49% 3.03% Google (www.google.com) 2.88% 2.99% 2.65% MSN Image Search (search.msn.com/images) - - 1.70% Wikipedia (www.wikipedia.org) 1.22% 1.44% 1.42% eBay (www.ebay.com) 1.71% 1.69% 1.32% Yahoo! (www.yahoo.com) 1.30% 1.30% 1.15% 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
  • 22. Search Engine Marketing 22 People Who Search 090436 How Many Searches Do People Conduct? When it comes to reckoning shares of total searches—and not just unique-visitor shares, where there can be overlap—Google is the clear preference among US Internet users. In data from Hitwise, people conducted up to 65% of their monthly searches on Google in the April to September 2007 period.Yahoo! Search trailed each month with about one-third of Google’s total, and, in that light, every other search engine collected a minuscule proportion of searches. 090322 The next two charts from Compete indicate relatively profound shifts in where people search.In the first 10 months of 2006,about 54% of searches took place on Google,with about 27% onYahoo! Search. 090437 However, in the corresponding months of 2007, Google’s monthly search share grew as high as 68%, while Yahoo! Search slipped to a mere 18% share. Some might say that Google is pulling away from the pack. 090451 Top Six Downstream* Sites that US Internet Users Visit Immediately after Visiting Ask.com, Ranked by Visitor Share, August-October 2007 Aug Sep Oct Ask Images (images.ask.com) 3.59% 4.09% 4.39% Google (www.google.com) 1.92% 2.03% 2.13% MySpace (www.myspace.com) 2.13% 2.01% 1.90% Wikipedia (www.wikipedia.org) 1.01% 1.29% 1.33% Yahoo! (www.yahoo.com) 0.76% 0.75% 0.72% Yahoo! Mail (mail.yahoo.com) - 0.60% 0.58% eBay (www.ebay.com) 0.68% - - Total, top six 10.09% 10.76% 11.05% Note: *downstream sites are those visited immediately after individual search engine visit Source: Hitwise, provided to eMarketer, December 2007; eMarketer calculations, December 2007 090436 www.eMarketer.com Share of Online Searches in the US, by Search Engine, April-September 2007 (% of total) Apr May Jun Jul Aug Sep www.google.com 65.3% 65.1% 63.9% 64.4% 64.0% 63.6% search.yahoo.com 20.7% 20.9% 21.3% 22.1% 22.9% 22.6% search.msn.com 7.8% 7.6% 7.7% 7.0% 6.5% 6.3% www.ask.com 3.7% 3.9% 3.4% 3.2% 3.5% 4.3% www.live.com* 0.7% 0.8% 2.1% 1.8% 1.5% 1.6% www.aolsearch.com 0.4% 0.4% 0.3% 0.4% 0.4% 0.4% Other search engines 1.4% 1.3% 1.2% 1.2% 1.3% 1.4% Note: April period=4 weeks ending April 28; May period=4 weeks ending May 26; June period=4 weeks ending June 30; July period=4 weeks ending July 28; August period=4 weeks ending September 1; September period=4 weeks ending September 29; *the search volume share reported for www.live.com starting week ending June 9 through July 9 includes searches automatically generated from a promotion on club.live.com Source: Hitwise, provided to eMarketer, November 2007 090322 www.eMarketer.com Share of Online Searches in the US, by Search Engine Provider, January-October 2006 Google Yahoo! MSN/Live Ask Other Jan 51.1% 27.7% 11.0% 5.0% 5.2% Feb 53.0% 26.0% 11.0% 5.0% 5.0% Mar 53.0% 26.0% 12.0% 5.0% 4.0% Apr 53.2% 26.8% 10.7% 4.7% 4.6% May 54.4% 26.3% 10.3% 4.8% 4.2% Jun 55.2% 26.7% 10.1% 4.1% 3.9% Jul 54.8% 27.7% 10.2% 3.7% 3.6% Aug 54.9% 27.9% 9.9% 3.7% 3.6% Sep 54.3% 29.2% 8.9% 4.4% 3.2% Oct 54.4% 29.6% 8.5% 4.3% 3.2% Note: excludes affiliate or syndicated search Source: Compete Inc. as cited in company blog, February-November 2007; eMarketer calculations, December 2007 090437 www.eMarketer.com Share of Online Searches in the US, by Search Engine Provider, January-October 2007 Google Yahoo! MSN/Live* Ask Other Jan 61.7% 23.1% 8.5% 3.6% 3.1% Feb 63.0% 21.0% 9.0% 3.0% 4.0% Mar 64.7% 19.7% 9.5% 3.4% 2.7% Apr 66.1% 20.4% 8.1% 3.2% 2.2% May 67.0% 19.7% 8.4% 3.5% 1.4% Jun 65.6% 20.5% 9.1% 3.5% 1.3% Jul 65.9% 19.7% 10.1% 3.1% 1.2% Aug 66.6% 19.8% 9.4% 3.1% 1.1% Sep 67.0% 19.0% 9.2% 3.6% 1.2% Oct 68.0% 18.1% 9.2% 3.9% 0.8% Note: excludes affiliate or syndicated search; *excludes MSN/Live's ClubLive promotion in June 2007 Source: Compete Inc. as cited in company blog, February-November 2007; eMarketer calculations, December 2007 090451 www.eMarketer.com
  • 23. Search Engine Marketing 23 People Who Search Search query share data from Nielsen and comScore also peg Google as No. 1 and Yahoo! Search as No. 2, but not by as large margins as Hitwise or Compete. In September 2007, Google’s share was either 54% (Nielsen) or 57% (comScore). 090319 090339 Even with comScore’s “expanded search rankings,” which measure a larger search universe, people conducted 50.6% of their searches on Google sites in September 2007. 090354 Does Google’s dominance here imply marketers should just follow the audience by placing most of their paid search ad dollars on the search giant? Not necessarily so. Google’s greater popularity among the search audience is matched by its popularity among marketers.That causes most search keywords to get, by auction, higher per-click prices than at the other search engines.Therefore, just to be effective, a search marketing campaign needs to consider how spreading its ad budget among several search engines might give greater reach at the same, or perhaps even at a lower cost. In absolute numbers, how many searches do people in the US do monthly? The Nielsen data say nearly 7.4 billion in September 2007, up from about 6.8 billion in April. 090317 Share of Search Queries Performed by US Internet Users, by Search Engine Provider*, April-September 2007 (% of total and billions) Apr May Jun Jul Aug Sep Google 55.2% 56.3% 52.7% 53.3% 53.6% 54.0% Yahoo! 21.9% 21.5% 20.2% 20.1% 19.9% 19.5% MSN/Windows Live 9.0% 8.4% 13.3% 13.6% 12.9% 12.0% AOL 5.4% 5.3% 5.5% 5.2% 5.6% 6.0% Ask.com 1.8% 2.0% 2.1% 1.8% 1.7% 2.2% My Web 1.0% 0.9% 1.0% 0.9% 0.9% 0.8% Comcast 0.5% 0.5% 0.4% 0.5% 0.4% 0.5% BellSouth - 0.4% 0.4% 0.5% 0.5% 0.5% My Way 0.4% - 0.5% 0.3% 0.4% 0.4% SBC Yellow Pages - - - - 0.4% 0.4% Dogpile.com 0.4% 0.4% 0.4% 0.3% - - EarthLink 0.4% 0.5% - - - - Other 3.9% 3.8% 3.6% 3.4% 3.5% 3.6% Total (billions) 6.84 7.17 7.41 7.77 7.83 7.39 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 090319 www.eMarketer.com Share of Search Queries Performed by US Internet Users, by Search Engine Provider*, June-September 2007 (% of total and billions) Jun Jul Aug Sep Google sites 54.9% 55.2% 56.5% 57.0% Yahoo! sites 23.8% 23.5% 23.3% 23.7% Microsoft sites 12.2% 12.3% 11.3% 10.3% Ask Network 4.6% 4.7% 4.5% 4.7% Time Warner Network 4.5% 4.4% 4.5% 4.3% Total (billions) 9.71 9.90 9.82 9.40 Note: among home, work and university users; *comScore's "core search report" is based on the five major search engines, and includes partner searches and cross-channel searches for each property; excludes searches for mapping, local directory and user-generated video sites that are not in the core domain of the five search engines Source: comScore qSearch 2.0 as cited in press releases, July-October 2007 090339 www.eMarketer.com Share of Search Queries Performed by US Internet Users, by Search Engine Provider, April-September 2007 (% of total and billions) Apr May Jun Jul Aug Sep Google sites 48.1% 48.6% 47.7% 48.3% 49.7% 50.6% Yahoo! sites 19.9% 20.0% 18.9% 18.4% 18.0% 18.3% Time Warner Network 7.6% 7.2% 7.3% 7.0% 6.8% 6.5% Microsoft sites 7.2% 7.3% 9.1% 9.1% 8.3% 7.7% Ask Network 3.3% 3.3% 3.4% 3.4% 3.2% 3.4% Top five 86.1% 86.4% 86.3% 86.3% 86.1% 86.5% Other 13.9% 13.6% 13.7% 13.7% 13.9% 13.5% Total Internet (billions) 12.07 12.48 13.39 13.70 13.70 13.02 Source: comScore qSearch 2.0, "Expanded Search Report for the US," provided to eMarketer, November 2007; eMarketer calculations, November 2007 090354 www.eMarketer.com Number of Search Queries Performed by US Internet Users, by Search Engine Provider*, April-September 2007 (millions) Apr May Jun Jul Aug Sep Google 3,773.0 4,033.3 3,906.9 4,143.8 4,199.5 3,994.2 Yahoo! 1,497.2 1,540.9 1,496.1 1,559.7 1,561.9 1,443.2 MSN/Windows Live 612.5 605.4 985.7 1,057.1 1,011.4 890.7 AOL 371.0 382.0 404.0 408.0 435.1 444.5 Ask.com 126.3 142.4 152.3 143.5 136.9 159.0 My Web 68.0 61.8 76.8 69.1 71.7 61.9 Comcast 35.2 34.9 30.5 37.3 34.7 38.9 BellSouth - 30.1 30.9 40.4 37.8 35.7 SBC Yellow Pages - - - - 31.9 29.4 My Way 26.8 - 35.6 24.5 32.5 26.8 Dogpile.com 28.6 26.3 30.5 25.7 - - 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
  • 24. Search Engine Marketing 24 People Who Search Despite its focus on just the top four search engines, the Compete monthly figure for September 2007 is almost 7.7 billion, with about 1.2 billion more searches at Google alone than in the Nielsen data. 090452 Even with its narrowed focus on the five core search engines, comScore put September 2007 US search queries at 9.4 billion, a lesser figure than during any of the three prior months. 090329 Within its “expanded search rankings,” the September 2007 total jumps to more than 13 billion search queries, a nearly 1 billion gain over the April figure of 12.1 billion. 090351 With the significant variations in the number of search queries among the three researchers shown, the question naturally arises: Whose number is most accurate? Perhaps a better perspective, though, is gained by looking at search query share, as in the charts leading off this section. Likely more than any other data in this report, the average number of queries per user per month demonstrates the pervasive nature of search. From Nielsen’s perspective, that figure hit 54.9 per person in September 2007; comScore pegged it at 70.4 searches on average. In either case, and no matter how they’re counted, the majority of all search queries represent potential marketing opportunities, whether through ads or natural rankings boosted by SEO. 090320 090374 Number of Searches in the US, by Search Engine Provider, July-October 2007 (millions) Google Yahoo! MSN/Live Ask Total, top four Jul 4,798 1,438 739 224 7,199 Aug 4,965 1,477 703 228 7,373 Sep 5,214 1,483 717 277 7,691 Oct 5,448 1,453 737 316 7,954 Note: excludes affiliate or syndicated search; top 4 total represents 98.8% of all searches (July), 98.9% (August), 98.8% (September), 99.2% (October) Source: Compete Inc. as cited in company blog, February-November 2007; eMarketer calculations, December 2007 090452 www.eMarketer.com Number of Search Queries Performed by US Internet Users, by Search Engine Provider*, June-September 2007 (millions) Jun Jul Aug Sep Google sites 5,330 5,459 5,545 5,356 Yahoo! sites 2,307 2,325 2,290 2,227 Microsoft sites 1,181 1,214 1,106 969 Ask Network 449 462 438 444 Time Warner Network 440 436 441 405 Total 9,707 9,896 9,820 9,401 Note: among home, work and university users; *comScore's "core search report" is based on the five major search engines, and includes partner searches and cross-channel searches for each property; excludes searches for mapping, local directory and user-generated video sites that are not in the core domain of the five search engines Source: comScore qSearch 2.0 as cited in press releases, July-October 2007 090329 www.eMarketer.com Number of Search Queries Performed by US Internet Users, by Search Engine Provider, April-September 2007 (millions) Google sites Yahoo! sites Time Warner Network Microsoft sites Ask Network Other Total Internet Apr 5,812 2,402 915 864 397 1,681 12,072 May 6,066 2,494 897 906 418 1,699 12,480 Jun 6,385 2,524 971 1,223 449 1,837 13,388 Jul 6,614 2,524 959 1,251 462 1,881 13,692 Aug 6,809 2,473 937 1,144 439 1,900 13,703 Sep 6,593 2,381 843 999 445 1,758 13,018 Source: comScore qSearch 2.0, "Expanded Search Report for the US," provided to eMarketer, November 2007; eMarketer calculations, November 2007 090351 www.eMarketer.com Average Number of Online Searches per US Unique Searcher, by Search Engine Provider*, April-September 2007 Apr May Jun Jul Aug Sep Google 28.7 30.8 29.4 30.5 31.0 29.7 Yahoo! 11.4 11.8 11.2 11.5 11.5 10.7 MSN/Windows Live 4.7 4.6 7.4 7.8 7.5 6.6 AOL 2.8 2.9 3.0 3.0 3.2 3.3 Ask.com 1.0 1.1 1.1 1.1 1.0 1.2 My Web 0.5 0.5 0.6 0.5 0.5 0.5 Comcast 0.3 0.3 0.2 0.3 0.3 0.3 BellSouth - 0.2 0.2 0.3 0.3 0.3 My Way 0.2 - 0.3 0.2 0.2 0.2 SBC Yellow Pages - - - - 0.2 0.2 Dogpile.com 0.2 0.2 0.2 0.2 - - EarthLink 0.2 0.3 - - - - Other 2.0 2.1 2.0 2.0 2.0 2.0 Total 52.0 54.7 55.7 57.2 57.8 54.9 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 090320 www.eMarketer.com Average Number of Online Searches per US Unique Searcher, by Search Engine Provider, April-September 2007 Apr May Jun Jul Aug Sep Google sites 43.7 44.9 46.1 47.3 47.8 46.4 Yahoo! sites 24.6 25.1 24.8 24.2 23.8 23.3 Time Warner Network 11.2 10.7 11.4 11.2 11.2 10.6 Microsoft sites 13.2 14.0 18.2 17.9 16.6 15.3 Ask Network 10.1 10.4 10.4 10.6 10.3 10.2 Total Internet 67.3 68.2 72.5 74.2 74.1 70.4 Source: comScore qSearch 2.0, "Expanded Search Report for the US," provided to eMarketer, November 2007; eMarketer calculations, November 2007 090374 www.eMarketer.com
  • 25. Search Engine Marketing 25 People Who Search One last take on counting queries:Ask.com showed an exceptionally large uptick in the average number of searches per searcher in September 2007. In that same month, the search engine also started a cross-media ad campaign to encourage use. The two facts are most likely connected. Marketing might be a key differentiator for competition among search engines, especially with every site other than Google being an also-ran. 090321 How Do People Use Keywords? When people enter search queries, what keywords do they use? As a starting point, keywords—and their pricing—form the pivotal core for search marketing campaigns. So, what keywords do people use most? According to Wordtracker, a keyword analysis firm that derives its data from Infospace, a search aggregator, 23.2% of all keywords or search terms entered in the August to October 2007 period were entertainment related.Within that keyword category, only a portion might be appropriate for search marketing campaigns. At the other end, only 2.3% of keywords came from either the health or the money and personal finance categories.Those are two verticals in which many companies use search advertising to boost traffic.And yet, with people searching for a limited number of keywords, that implies greater pricing competition for related search terms. 090385 A view of the top five keywords that people entered in each category indicates several factors about the ways people use search engines.Take the social networking category, for example. Both MySpace and YouTube were searched for at least two different ways.That indicates how various spellings need to be bid on for any set of keywords. Looking at the same category—or at the search sites, communication or e-commerce categories—it seems that the top searches might not be used so much to find things as they are to index things, a substitute for Web browser bookmarks. Do people really need to search for “Google” or “Hotmail.com” or “eBay” as terms? That is doubtful. Growth of Average Number of Online Searches per US Unique Searcher, by Search Engine Provider*, May-September 2007 (% change) May Jun Jul Aug Sep Ask.com 13.2% 5.2% -7.7% -4.4% 16.8% Comcast -0.6% -14.1% 20.0% -6.7% 12.8% AOL 3.3% 4.1% -1.1% 7.0% 2.7% Google 7.3% -4.7% 3.9% 1.6% -4.4% BellSouth - 0.8% 28.1% -6.2% -4.8% Yahoo! 3.3% -4.5% 2.1% 0.4% -7.1% SBC Yellow Pages - - - - -7.3% 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% My Way - - -32.6% 32.8% -17.2% Dogpile.com -7.6% 13.9% -17.4% - - EarthLink 11.9% - - - - Other 2.7% -5.5% -1.7% 4.5% -2.0% Total 5.2% 1.8% 2.7% 1.0% -5.1% 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 090321 www.eMarketer.com Top 25 Keywords' Share of Each Category's Total Keywords on Infospace, August-October 2007 Entertainment 23.2% Search 13.9% Social networking 13.5% E-Commerce/shopping/product 13.1% General information/general topics 7.9% News 6.7% Travel 6.5% Communication 6.2% Sports 4.2% Health 2.3% Money/personal finance 2.3% Note: Percents calculated by taking the total number of search queries for 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 25 keywords in all of the 11 categories; no overtly "adult" elements have been included Source: Wordtracker, November 2007; eMarketer calculations, November 2007 090385 www.eMarketer.com
  • 26. Search Engine Marketing 26 People Who Search Categories such as health and money and personal finance tend to garner more general terms.That implies that more searches, rather than user laziness, are taking place. 090387 Over time,people do tend to enter more complex search queries.In data comparing the average number of keywords per query in July 2004 with July 2006,one- and two-word queries both decreased, while more Internet users went to three-or-more-word queries. 082318 Top Five Keywords per Category on Infospace, August-October 2007 (% of each category's keywords) Social networking % share Search sites % share Commun- ication % share Travel % share % share News Money/ personal finance % share General information/ general topics % share Entertainment % share E-Commerce/ shopping/ product % share Health % share Sports % share #1 Myspace 25.04% Google 19.26% Hotmail 13.60% Map- quest 22.93% Bank of America 11.61% Obituaries 12.08% Baby boy names 12.61% Play game 12.13% eBay 17.57% Doctor's Excuse 9.11% ESPN 7.30% #2 Myspace. com 14.76% Yahoo 16.55% Hotmail. com 12.81% Maps 7.14% Jobs 9.06% News- paper obituaries 8.66% Dictionary 8.61% Play games 9.34% Craigslist 7.95% Finding dental care 7.12% WWE 7.03% #2 You- tube 13.07% Yahoo.com 10.33% Yahoo mail 11.17% Map quest 6.87% Mortgage calculator 8.99% Helmsley's trouble 7.95% Wikipedia 8.48% Vanessa Hudgens 7.87% Wallmart 4.90% Web md 6.58% John Sena 6.82% #4 You tube 8.14% Google.com 4.56% Gmail 5.33% Airline tickets 5.83% Insur- ance 7.85% Weather 7.55% Free English course 6.50% Music lyrics 6.91% Home Depot 4.79% Web MD 6.40% NFL Schedule 6.78% #5 Top five total Face book 7.52% MSN 4.52% Comcast. net 4.89% Google Earth 4.84% Realtor. com 6.48% Local newspaper 7.25% Dogs 6.27% Game cheats for ps2 5.27% Webkinz 4.37% Hearts 4.80% Football 5.64% 68.53% 55.23% 47.79% 47.61% 44.00% 43.49% 42.47% 41.51% 39.58% 34.02% 33.58% Note: Percents calculated by taking the total number of search queries for 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 25 keywords in all of the 11 categories; no overtly "adult" elements have been included Source: Wordtracker, November 2007; eMarketer calculations, November 2007 090387 www.eMarketer.com Average Number of Keywords per Search Query Used by Internet Users Worldwide, July 2004 & July 2006 One word 17% 11% Two words 30% 29% Three words 27% 28% Four words 15% 17% Five words 7% 8% Six words 3% 4% Seven words 1% 2% July 2004 July 2006 Source: OneStat.com appearing in Piper Jaffray & Co., February 2007 082318 www.eMarketer.com
  • 27. Search Engine Marketing 27 People Who Search When marketers look at the growing size of user search queries, along with the tendency to approach any subject with various spellings and perspectives, their need for large keyword inventories expands.According to the US chain retailers, catalog companies,Web-only merchants and consumer brand manufacturers who responded to an Internet Retailer survey, 45.2% of the 245 respondents maintained keyword inventories of 501 or more words. 082618 Similarly, a WebTrends survey found that 44% of search marketers dealt with 1,000 or more keywords in each paid search campaign. 083799 Considering how keywords—and how much to bid on each— form just one part of search marketing’s front end, along with the text of the ad and details of the linked landing page, this preceding research points to how search engine marketing is likely the most complex form of advertising in any medium. The details involved in effective search marketing become even more complex when the time of day, day of week and time of year are layered on top of keyword bidding; potential factors such as geotargeting; and the tracking needed—based on each keyword’s bid and ranking at a particular moment—if the user clicks on the ad linked to the search term. Why Do People Search? The Internet is the tell-me-more medium—the world’s largest library, mall and local pub or schoolyard rolled into one.What do people want to know more about? Those Web site categories that gained the greatest share of visitors directly from search engines included education, health and medical, food, and beverage and music, according to Hitwise data. 090464 From the marketer’s point of view, people search to shop, sometimes for pleasure and sometimes, as with health-related items, for necessity. Size of Pay-per-Click Keyword Inventory according to US Retailers, March 2007 (% of respondents) <50 words 25.1% 51-100 words 11.5% 101-200 words 8.5% 201-250 words 6.4% 251-500 words 3.4% 501-750 words 8.5% 751-1000 words 3.0% 1001-5000 words 12.8% 5001-10000 words 6.0% 10000+ words 14.9% Note: n=245; numbers may not add up to 100% due to rounding Source: Internet Retailer with WebSurveyor, April 2007 082618 www.eMarketer.com Total Number of Keywords Used by US Search Marketers in Their Paid Search Campaigns, April 2007 (% of respondents) <1,000 31% 1,000-10,000 22% 10,000-75,000 9% 75,000-200,000 6% 200,000+ 7% Don't know 14% No answer 11% Note: n=132 Source: WebTrends, "Paid Search Marketing Survey," provided to eMarketer, May 8, 2007 083799 www.eMarketer.com Top Vertical Categories Ranked by Percent of US Internet Users Whose Visits Came from Search Engines, September 2007* 1. Education 44.64% 2. Health and medical 44.43% 3. Food and beverage 39.74% 4. Music 39.16% 5. Community 34.73% 6. Travel 32.51% 7. Government 31.78% 8. Shopping and classifieds 25.55% 9. Aviation 24.85% 10. Automotive 23.75% 11. Lifestyle 23.19% 12. News and media 20.89% 13. Entertainment 20.81% 14. Gambling 20.63% 15. Business and finance 17.00% 16. Computers and Internet 13.90% 17. Sports 9.84% All categories 24.45% Note: *four weeks ending September 29, 2007 Source: Hitwise, October 2007 as cited in Advertising Age, "Search Fact Pack 2007," November 2007 090464 www.eMarketer.com
  • 28. Search Engine Marketing 28 People Who Search When people start to shop, a general search engine is the most- used online resource, more so for inexpensive than costly goods, according to the October 2007 “Digital Consumer Behavior Study” from Avenue A-Razorfish. 088153 However, as the shopping cycle continues, search may matter less. In the 2007 version of a Millard Group report, only 13% of US online buyers used a search engine to access a retail site. Prior connections with the retailer, such as an e-mail promotion or a merchant link, are far more used. Of course, the initial contact used to create that connection might very well have come from a consumer search. 087431 A similar 10% of Internet users cited search engines as their primary outlet for learning about new products, according to an Accenture report. 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 look for a place to purchase the item. 083391 Most Likely Online Shopping Resource of US Internet Users for Beginning Product Research, by Product Cost, July 2007 (% of respondents) General search engine to see what comes up 54% 45% Specific e-commerce site frequented or thought to specialize in that type of product 15% 15% Web site of a known and established retail store 15% 15% Comparison shopping search engines to see the price up front 14% 14% Other 1% 2% Do not use the Web for making purchase decisions 1% 8% <$100 $1,000+ Note: n=475; numbers may not add up to 100% due to rounding Source: Avenue A | Razorfish, "Digital Consumer Behavior Study," October 2, 2007 088153 www.eMarketer.com Select Methods by which US Online Buyers Accessed Retail Web Sites, 2005 & 2007 (% of respondents) E-Mail promotion 45% 62% Link from the merchant 24% 38% Entering URL directly 32% 24% Bookmarks 25% 20% Search engines 15% 13% 2005 2007 Source: Millard Group report as cited by DM News, September 13, 2007 087431 www.eMarketer.com Primary Means by which US Internet Users Find Out about New Products, January 2007 (% of respondents) TV 34% Word of mouth 20% Print ads 17% Internet search engines 10% Manufacturer Web sites 4% Internet advertising 3% 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
  • 29. Search Engine Marketing 29 People Who Search When people do use search engines to shop, they most typically search for company sites, best prices and information, or at least that was the case for the online mothers surveyed by DoubleClick Performics, Microsoft and ROI Research. 086752 In fact, among all the age groups polled by Deloitte & Touche, search engine results were more likely to lead to site visits than any other form of advertising, including word of mouth,TV commercials and display ads on other sites. So it’s no wonder that 40% of total Internet spending goes to paid search advertising. 086527 No wonder, too, that search engine optimization will receive increased attention and spending, considering how 18.1% of retailers say that 10% or more of search engine shoppers visit their sites as the result of a natural search listing. 082615 Surprisingly, perhaps, people search not only for high- consideration products, such as cars or high-definition TVs, but also for consumer packaged goods (CPG) such as baby products, food, personal care items and household goods. For low-cost items such as these, greater involvement tends to link search and site visits, as shown in research from comScore, Procter & Gamble and Yahoo! That’s why 60% of unique visitors to baby product sites used search versus only 23% for household product sites, since shopping for young children is far more important than buying the latest detergent. 088709 Select Uses of Search Engines according to US Online Females with Children, July 2007 (% of respondents) To find specific manufacturer/product Web sites 85% To find the best price for a product/service 72% To gather information before marking an online purchase 70% To find out where to purchase offline 64% To further learn about a product/service after seeing an advertisement 64% To gather information before marking an offline purchase 57% Note: n=991 female Internet users with at least one child ages 18 or younger living at home; respondents were asked to indicate, on a five point scale, how strongly they agree or disagree with these statements; results are a summary of the "agree" responses Source: DoubleClick Performics, Microsoft, ROI Research, "Searcher Moms: A Search Behavior and Usage Study," provided to eMarketer, August 21, 2007 086752 www.eMarketer.com Types of Advertising that Cause US Consumers to Visit Web Sites, by Age, February 23, 2007-March 6, 2007 (% of respondents in each group) Result from using Internet search engines Someone's recommendation Seeing ad on TV Seeing ad in print (newspaper or magazine) Seeing ad at other Web sites Sales or product offers received in the mail Hearing an ad on the radio Millennials 13-24 84% 85% 64% 56% 55% 41% 46% Gen X 25-41 87% 85% 66% 66% 59% 58% 56% Baby boomers 42-60 83% 79% 67% 67% 54% 58% 48% Matures 61-75 81% 76% 62% 67% 50% 59% 41% All 13-75 84% 82% 65% 64% 55% 54% 49% Note: n=2,200 ages 13-75 Source: Deloitte & Touche, "State of the Media Democracy" conducted by Harris Group, provided to eMarketer, August 2007 086527 www.eMarketer.com Percent of Search Engine Shoppers Who Visit Retail Web Sites through a Natural Search according to US Retailers, March 2007 (% of respondents) 0.0%-1.0% 12.3% 1.1%-2.0% 14.8% 2.1%-4.0% 17.3% 4.1%-6.0% 6.6% 6.1%-8.0% 8.6% 8.1%-10.0% 2.5% 10.1%-15.0% 7.4% 15.1%+ 10.7% Don't know 19.8% Note: n=245; numbers may not add up to 100% due to rounding Source: Internet Retailer with WebSurveyor, April 2007 082615 www.eMarketer.com US Internet Users Who Use Search to Reach CPG Web Sites, by Category, February-April 2007 (millions and % of unique category visitors) Unique visitors Unique visitors that used search to reach category site % of unique visitors that used search to reach category site Baby products 26.0 15.7 60% Food products 93.7 43.8 47% Personal care products 35.9 9.8 27% Household products 7.3 1.7 23% Source: comScore, Inc., Search Engine Marketing Professional Organization (SEMPO), Procter & Gamble andYahoo!, "The Digital Shelf: the Opportunity for Search Marketing in Consumer Packaged Goods" as cited in press release, October 23, 2007 088709 www.eMarketer.com
  • 30. Search Engine Marketing 30 People Who Search Among visitors to CPG sites, those who used search to get there cited information, help and purchase decisions more than did non-searchers. Promotions were stronger drivers for those who did not use search engines.The implications, at least for low-cost, generally low-consideration goods, then, is that search campaigns might be more effective when linked with information that helps people make better purchase decisions than with special offers or other promotional deals. 088711 Not all searches are part of online-only endeavors, of course. Research from comScore and Yahoo! found that 43% of in-store buyers were influenced by a combination of online display and search ads. Even 26% of in-store buyers were inspired to hand over their credit cards because of a paid search campaign. 086196 And the CPG research from comScore found that consumers who searched tended to spend more offline on those goods than those who didn’t search. Of course, the mere fact of the search indicates greater intent on the user’s part and therefore might indicate greater tendency to purchase, too. 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. Reasons that US Search and Non-Search Users Visit CPG Web Sites, February-April 2007 (% of respondents) Searchers Non-searchers Information and help 73% 58% Find more information about products 48% 36% Learn about new products 44% 38% Compare competitive products 26% 10% Purchase decision 64% 44% Help me make a purchase decision 40% 28% Get/compare products 36% 23% Find where to buy/local places 31% 15% Promotion 47% 59% Find out about special offers 40% 47% See official company Web site 29% 22% Note: Searchers are those Internet users who used search engines to find the CPG sites Source: comScore, Inc., Search Engine Marketing Professional Organization (SEMPO), Procter & Gamble andYahoo!, "The Digital Shelf: the Opportunity for Search Marketing in Consumer Packaged Goods" as cited in press release, October 23, 2007 088711 www.eMarketer.com Effectiveness of Online Search and Display Advertising Campaigns in Converting US Online Researchers to In-Store Buyers, 2007 (% change in conversions) Consumers who saw a joint display and search campaign and subsequently made an in-store purchase 43% Consumers who saw a search campaign and subsequently made an in-store purchase 26% Consumers who saw a display campaign and subsequently made an in-store purchase 6% Note: The purchasing behavior of more than 175,000 comScore panelists was compared over a period of eight months-an unexposed control group and a group who had been exposed to ads from five major retailers Source: comScore Networks Inc. andYahoo!, "From Clicks to Bricks: The Impact of Online Pre-Shopping on Consumer Shopping Behavior" as cited in press release, July 30, 2007 086196 www.eMarketer.com Amount that US Search and Non-Search Users Spend Offline on CPG Products, by Category, February-April 2007 Searchers Non-searchers Household products $62.56 $52.09 Baby products $52.19 $46.36 Food products $51.91 $41.69 Personal care products $40.30 $32.34 Note: Searchers are those Internet users who used search engines to find the CPG sites Source: comScore, Inc., Search Engine Marketing Professional Organization (SEMPO), Procter & Gamble andYahoo!, "The Digital Shelf: the Opportunity for Search Marketing in Consumer Packaged Goods" as cited in press release, October 23, 2007 088713 www.eMarketer.com
  • 31. Search Engine Marketing 31 People Who Search The importance of smart keyword bidding and relevant landing pages associated with each keyword is emphasized by a survey from William Blair & Co. 085793 For more information about overall US ad spending, read eMarketer’s “US Advertising Spending” report at http://www.emarketer.com/Reports/All/Emarketer_2000442 Reasons that US College Students Do Not Click on Search Engine Sponsored Links, September-November 2006 (% of respondents) Irrelevance 73% Trust 16% Not looking to buy anything 9% Just don't 12% N/A 4% Note: ages 18-22 Source: William Blair & Company, "Millennials Survey," July 11, 2007 085793 www.eMarketer.com
  • 32. Search Engine Marketing 32 Related Information and Links Related Links Compete http://compete.com comScore http://www.comscore.com Forrester Research http://www.forrester.com Hitwise http://www.hitwise.com Nielsen//NetRatings http://www.nielsen-netratings.com Contact eMarketer, Inc. Toll-Free: 800-405-0844 75 Broad Street Outside the US: 212-763-6010 32nd floor Fax: 212-763-6020 New York, NY 10004 sales@emarketer.com Report Contributors Mike Chapman Editorial Director Joanne DiCamillo Production Artist Dana Hill Production Artist James Ku Data Entry Associate and Production Artist Yael Marmon Director of Research Daniel McMahon Copy Editor Hilary Rengert Senior Researcher and Production Artist Allison Smith Senior Editor Tracy Tang Senior Researcher About eMarketer eMarketer is "The First Place to Look" for market research and trend analysis on Internet, e-business, online marketing, media and emerging technologies. eMarketer aggregates and analyzes information from over 2,800 sources, and brings it together in analyst reports, daily research articles and the most comprehensive database of e-business and online marketing statistics in the world. A Trusted Resource eMarketer serves as a trusted, third-party resource, cutting through the clutter and hype–helping businesses make sense of the e-business numbers and trends. eMarketer's products and services help companies make better, more informed business decisions by: ■ Streamlining e-business research sources and reducing costs ■ Eliminating critical data gaps ■ Providing an objective, bird’s eye view of the entire e-business landscape ■ Better deploying and sharing information across the company ■ Building solid business cases backed up by hard data ■ Reducing business risk ■ Saving valuable time 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.