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PAID SEARCH:
FOLLOW THE MONEY
The Reasons Behind the Growth of
Paid Search And What it Can Do for You
INTEGRATED ONLINE MARKETING · 877.568.7477 · ONEUPWEB.COM · ©2008Why the Ever-Increasing
Talk About Paid Search?
In just ten years, it's been responsible for building an unknown
startup into the fifth largest corporation in America. It was the
primary force behind the world's richest man-principal stockholder
of the country's third largest company-offering more than $44
billion for a much smaller, financially-strapped competitor. It has
revolutionized the business of advertising worldwide and launched
new, highly innovative industries focused on measuring and
maximizing its impact. It's Paid Search. And every day it grows in
importance. for everyone.
INTEGRATED ONLINE MARKETING · 877.568.7477 · ONEUPWEB.COM · ©2008What Do We Mean by Paid Search? US Media Spending Growth: Paid Search vs. Traditional Media The term Paid Search refers to advertisements placed (% change)on search engine results pages (SERPs)-typically text links that appear atop and/or listed on the right side of the SERPs.
Traditionally, these ads consist of a text link to a company's website or landing page and are often referred to as Sponsored Listings or Pay Per Click (PPC) ads. Paid Search ads appear on SERPs based on the search terms used in a query. To determine which keywords will trigger an ad to appear, marketers bid on keywords used to find their website-the higher the bid, the higher the position an ad gets on the page.
Over time, the definition of Paid Search has evolved into an umbrella term that includes other types of online advertisements-not just Sponsored Listings on SERPs. Contextual advertisements, or online advertisements placed on websites based on the content of a site or page rather than search terms, often fall under the umbrella of Paid Search and can include text, images, audio or video. For the purpose of this paper, we are focusing our dicussion on the traditional Paid Search advertising model-ads appearing on SERPs.
Source: Advertising Age, Dec. 2007; eMarketer, Jan. 2008
INTEGRATED ONLINE MARKETING · 877.568.7477 · ONEUPWEB.COM · ©2008Paid Search-Major Advertising Media Placement Trends (
a Ford Motor Company $2.58 Billion
MEDIA 2005 ($) 2006 ($) % CHANGE
BtoB Magazines 6,765 5,109 -24.5Newspaper 112,173 80,740 -33.9Network TV 461,709 524,052 13.5Internet 55,019 99,064 80.1
b Berkshire Hathaway $1.09 Billion
MEDIA 2005 ($) 2006 ($) % CHANGEMagazines 56,183 45,799 -18.5Network TV 56,775 65,109 14.7Outdoor 17,671 21,031 19Internet 2,210 13,910 529.4
c Macy's $1.36 Billion
MEDIA 2005 ($) 2006 ($) % CHANGESpot TV 178,550 77,966 -56.3Local Magazines 2,458 2,823 14.8Newspaper 738,866 657,014 -11.1Internet 1,144 4,525 295.6
d Kraft Foods $1.42 Billion
MEDIA 2005 ($) 2006 ($) % CHANGEMagazines 474,760 418,322 -11.9FSI 50,724 38,469 -24.2Syndicated TV 26,963 18,923 -29.8Internet 12,133 22,889 88.7
Source: Advertising Age, Dec. 2007
INTEGRATED ONLINE MARKETING · 877.568.7477 · ONEUPWEB.COM · ©2008The Numbers Tell the Tale. US Paid Search Advertising Spending, 2001-2007 (% of total online advertising spending)As the chart to the right illustrates, Paid Search has been a rapidly growing segment of online advertising, with nearly half of total online ad spending now devoted to Paid Search advertising. Online advertising spending in the US has seen double digit yearly growth since 2002 A and with that, online advertising's share of marketing budgets has grown among major advertisers and so has the dollar amount allocated to it. At the same time, the relative investment in most traditional advertising vehicles-network television, radio, newspapers and business magazines- Source: eMarketer, Mar. 2006continues to drop. These trends have not gone unnoticed by the media. Network television now shares content online-often free-for the opportunity to maintain branding and open new avenues for ad revenue. Radio and newspapers have reached an understanding with Google to sell excess ad inventory. Google then resells the space and offers creative assistance by certifying approved production sources. (FYI-Oneupweb is a Google-approved radio production source.) Newspapers and business... [download for more]
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