So I’ve been watching revenue estimates for the paid search marketplace lately, and I’m confused. The target for 2006 was $6 billion, set a few years ago by Piper. We’re clearly past that – and a year early. But the numbers are all over the place lately. Here’s a quote from the Kelsey Group, for example:
“Paid search advertising may well reach $7 billion in 2005,” said Neal Polachek, senior vice president, research and consulting, The Kelsey Group.
OK, so…Google is going to do about $6 billion in revenues this year. Toss out AOL and Ask, as they are in that gross number. But Yahoo is not. They do at least a billion and a half more in search revenues. Then there are the second tier players, who have to throw in a few more hundred million bucks here and there. And what about the Yellow Pages folks?
Anyway, with just Google and Yahoo’s results to date, we’re way past $7 billion. Right? Or maybe Kelsey is not counting AdSense as paid search? Whose numbers do you believe?
There are two big points:
One is some forecasts are US only and others are worldwide. International is currently around a third of Google and Yahoo’s revenue.
Also there is Adsense for content and Adsense for search. So the better forecasts count Adsense for content in display advertising rather than search advertising because the user is not expressly disclosing their intent.
One Puzzling variable is – who is LOOSING this new money that is goin towards Online Search Advertising?
Is Hard Copy as a whole loosing Advertisers, or are Advertisers just increasing their Online Spending while NOT decreasing their Print Media spending.
Then, are consumers just buying more as a result of all this addtional Advertising, or just substituting their online purchases for what would have been Print Media Ad motivated. purchases.
What will the ultimiate effect be on the long-term survivablity of the Print Media?
One good news is the reports that Google is now using the Print Media as an additional resource to combine with it’s Clients’ online Ad campaigns. 🙂
The numbers are all over the place. Agreed.
The Kelsey Group does local but has historically relied on a composite of third parties to size the general search market. In that release we’re not talking about directories, verticals, classifieds (all of which represent local spending to varying degrees). And AdSense is not search because the user behavior is fundamentally different). The point being made is that there’s a discrepancy between the consumer and advertiser behavior and the corresponding $$ that are being allocated to geotargeted search. If geotargeted search were being more effectively monetized it would be generating revenues commensurate with consumer usage of search for local information.
Also, what’s striking is that all the forecasts have been surpassed already.
Semi-rough numbers for the US alone, paid search revenues in 2005
Google = $3.7 billion
Yahoo = $1.6 billion
So, how much US paid search revenues are the other sites getting, besides that $5.3 billion?
Those eMarketer estimates are based on reported revenues through Q3, with 61% of Google’s total ad revenues of $6.0 billion (projected) coming from the US, and with 69% of Yahoo’s total ad revenues — not just paid search, but portal stuff too –of $4.5 billion (projected) US derived.
Semi-rough numbers for the US alone, paid search revenues in 2005
Google = $3.7 billion
Yahoo = $1.6 billion
So, how much US paid search revenues are the other sites getting, besides that $5.3 billion?
Those eMarketer estimates are based on reported revenues through Q3, with 61% of Google’s total ad revenues of $6.0 billion (projected) coming from the US, and with 69% of Yahoo’s total ad revenues — not just paid search, but portal stuff too –of $4.5 billion (projected) US derived.
Report from CNN today on overall online advertising, “In the first half of 2005, U.S. online advertising spending increased 26 percent to $5.8 billion in the first half of this year, according to data compiled by PricewaterhouseCoopers LLP for the Interactive Advertising Bureau.”