8.6 Billion Spend on Search Engine Advertising in 2007

eMarketer estimates that over $8.6 billion was spent on search engine advertising in 2007.

”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, considerable customer satisfaction,” says David Hallerman, eMarketer Senior Analyst and author of the new report, Search Engine Marketing: User and Spending Trends, “considerable customer satisfaction.”

In a Harris Interactive poll, 84% of respondents cited search engines for good customer service, topped only by supermarkets.

No wonder usage is growing. “At least 155 million people in the US used search engines in 2007,” says Mr. Hallerman. “That number will rise by 25 million in 2011.”

Search ad spending is up, too eMarketer estimates that US search advertising spending grew almost 27% last year.

All of the eight researchers eMarketer surveyed project continued growth in spending. However, all but one, Forrester, see the growth rate slowly declining.

For now, though, one company is reaping an overwhelming share of the benefits of both customer satisfaction and growth in the industry.

"Google dominates the market," says Mr. Hallerman. “It draws far more search users and search requests—and therefore search ad revenues—than all its rivals put together.”

eMarketer estimates that Google raked in 75% of US paid search advertising in 2007, up from 60% in 2006. Number two Yahoo! collected a 9% share, and everyone else split 16% of the pie.

”That’s still a lot,” says Mr. Hallerman. “With over $8.6 billion going to search engine advertising in 2007, that 16% stake equaled nearly $1.4 billion. And with search spending projected to nearly double in 2011, even a small slice of the pie represents significant revenue.”

Google CEO bullish on mobile Web Advertising

The arrival of a truly mobile Web, offering a new generation of location-based advertising, is set to unleash a "huge revolution", Google Inc Chief Executive Eric Schmidt said on Friday.

"It's the recreation of the Internet, it's the recreation of the PC (personal computer) story and it is before us -- and it is very likely it will happen in the next year," he told a panel at the World Economic Forum.

Current estimates for mobile advertising are cautious, with consultancy Forrester predicting revenues of under $1 billion by 2012.

But Schmidt said this figure was too low and failed to take into account the fact the mobile Web was reaching a tipping point.

Google aims to be a prime mover by bidding for coveted airwaves to launch an open U.S. wireless network, pitting it against established telecommunications players. The move will take the Silicon Valley-based company well beyond its core Web search and online advertising franchises.

Some analysts are worried at the high costs involved but Schmidt said he was confident location-based advertising -- which could, for example, direct hungry travelers to nearby restaurants -- would be "a very, very good business".

Content providers, already struggling in the modern world of music and film downloads, are less convinced that mobile Internet is a minefield.

"It is not going to be easy to hang on the price of content," said Howard Stringer, chief executive of Sony Corp.

China Close To Becoming World’s Largest Internet Market By Users

New statistics released by the Chinese Government show that China is due to surpass the United States as the nation with the most internet users in the coming months.

The state-owned China Internet Network Information Center said that China’s total number of Internet users rose 53% to 210 million at the end of 2007 up from 137 million at the end of 2006 and 162 million in June 2007. According to the WSJ, China is now just five million users shy of surpassing the United States as the world’s largest Internet market.

Chinese internet stocks listed in the United States and elsewhere soared in 2007 has the market continued to grow at massive rates. Notably though most Chinese access the internet via internet cafe’s, although home or business internet use is also rapidly growing.

Final Online Holiday Shopping Tally Finishes Up 19%

An interesting article demonstrating the changing behaviors of online spending...

Online shopping in the U.S for the 2007 holiday season totaled $29.2 billion - up 19% versus the same period in 2006, according to comScore, Inc., and off slightly from the originally forecast 20% bump. Monday, Dec. 10, dubbed by comScore as "Green Monday," was the heaviest online spending day of the season with $881 million spent by shoppers, followed by Tuesday, Dec. 11 ($819 million) and Thursday, Dec. 6 ($803 million). "Cyber Monday" (Monday, Nov. 26), which represents the first major spike in online spending activity during the season, ranked as the 9th-heaviest day, with $733 million.

The week ending Dec. 16 was the heaviest week of the season with $4.7 billion in spending edging out the week ending Dec. 9, which saw $4.6 billion. The week ending Nov. 18 showed the strongest growth rate (26%) versus the corresponding week in 2006, while the week ending Nov. 4 showed the softest growth (4%).

The results include home, work and university locations, but exclude auctions and large corporate purchases.

In terms of category sales:
- Video games
- Consoles
- Accessories

Were the fastest-growing, jumping 129% versus the 2006 holiday season, with popular consoles like Nintendo Wii and Sony PlayStation and games like "Halo 3" driving strong sales in the category. Furniture, appliances and equipment (up 67%), event tickets (up 24%), and consumer electronics (up 23%) also experienced above-average growth, according to comScore.

After seeing substantial softness early in the season, online apparel sales picked up considerably in the latter part of the season, finishing up 18%. Meanwhile, sales of jewelry and watches declined marginally versus year ago as rising costs in precious metals like gold and platinum may have dampened consumer demand.