Who says that recession has hit hard? Take a look at the online advertising industry and you will find that there has been a 5% increase in the overall spending on search engine marketing (SEM). People are beginning to spend more on paid SEM and organic search engine optimization services, along with affiliate marketing.
Yes! Last year, the advertising spend in search engine marketing (SEM) had dropped due to recession. The economic downturn has definitely had a negative impact but now things are slowly coming back to normal. The search engine marketing industry has started to stabilize and it can be seen from the statistics available for the third quarter of 2009. In the third quarter of 2008, advertising spend in the SEM industry in US was 100% and the ROI was also 100%. But in the first quarter of 2009, advertising spend was 84% (falling by 16%) although the ROI was 92%. In the third quarter of 2009, advertising spend increased by 11% vis-à-vis Q1 of 2009 and the ROI was 98%.
The advertising spend in the SEM industry in the US was up 5% vis-à-vis Q2, 2009 although the year-over-year (YoY) ratio showed a 5 percent decline. The decline in the year-over-year ratio is being driven by continued weakening of the cost per click (CPC) advertising market. To make things worse, Google's CPC has also taken a dip and showed a downturn in four consecutive quarters. The only good news is that businesses are able to enjoy a stable return on investment (ROI) even during such a lean period.
Every online marketer, advertising professional, and SEO or SEM website marketing expert is focusing on the performance of Google and Yahoo. Google has been enjoying a dominant position with a good 70 percent share of the market pie but in the last 3 quarters, Google has lost a certain percentage of the overall spend share on the quarter-over-quarter (QoQ) basis as well as year-over-year (YoY). Google has lost 1.78 percent on quarter-over-quarter (QoQ) basis and 0.83 percent on year-over-year (YoY). Even Yahoo is not doing any better as their spend share went down by 0.07 percent while their click share suffered a setback as it dipped by 2.43 percent on year-over-year(YoY) results.
The fact of the matter is that things have started to look bright again as the search engine marketing industry takes a breath of reprise. According to David Karnstedt, the CEO and President of Efficient Frontier, “The third quarter results and a look beyond provide some encouraging signs for the Search Marketing industry as well as the overall economy.”
Karnstedt also added that particular sectors like travel & tourism has definitely lagged behind and is still continuing to do so. On the other hand, sectors like retail has definitely picked up as they move into the fourth quarter of 2009. The finance industry is also slowly stabilizing as it showed a positive growth where consumer demand is concerned. The finance industry statistics show a 1 percent dip in quarter-over-quarter (QoQ) and a 7 percent upturn in year-over-year (YoY).
According to Karnstedt, the Q4 of 2009 and Q1 of 2010 is a critical period for online marketers and advertisers.