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According to the SEMPO report released yesterday, search marketing spending ended up being even higher than expected last year. Good news for people like us in the SEM space. Most of the money is going to paid search (87%) with organic SEO picking up about 10%.

Some of the key findings from the report:

  • The North American SEM industry grew from $9.4 billion in 2006 to $12.2 billion in 2007, exceeding earlier projections of $11.5 billion for 2007.
  • North American SEM spending is now projected to grow to $25.2 billion in 2011, up significantly from the $18.6 billion forecast a year ago.
  • Marketers are finding more search dollars by poaching budget from print magazine spending, website development, direct mail and other marketing programs.
  • Paid placement captures 87.4% of 2007 spending; organic SEO, 10.5%; paid inclusion, .07%, and technology investment, 1.4%.
  • Google AdWords remains the most popular search advertising program, but both Google and Yahoo sponsored search spending has decreased from a year ago.

It’s not really clear how they came up with the spending figures for this report. If this data is simply coming from the SEMPO survey, I’m not sure how it could be accurate. They must be pulling from other sources, right? Also, this only includes search, not contextual ads, because if it did include other non-search ads run through the search engines, the figure should be much higher than $12 billion. Google did $16B total revenue themselves last year, mostly from PPC advertising (search/contextual). Even if it is just search, the $12B figure still seems low to me. Also, I’m not sure how Google and Yahoo spending could have decreased with the overall total going up so much from the previous year, especially when Google’s own financials tell a different story. Perhaps those surveyed just said they were spending less?

Regardless of the details, the search marketing pie is growing and is projected to double by 2011. In our country’s current economic situation, I expect we’ll continue to see a shift of marketing dollars from less cost-effective media like print and broadcast into search marketing. People are going to put the money into the marketing channels that yield results.

Keep it coming.