Paid search growth may slow | Outlook for GoogleCNET News.com
Paid search growth may slow | CNET News.com: "JupiterResearch, a division of Jupitermedia, has forecast total online ad spending, including search and display ads like banners, will nearly double to $16.1 billion by 2009 as consumers devote more time to the Web and new technologies make it easier to create and track campaigns..."You have to assume that three years from now, Google is more than just a search engine," said Mahaney, who expects the Google IPO would be priced at the lower end of a $108- to $135-per-share range. "Seventy-five percent of your investment is based on your outlook on paid search and 25 percent on your belief that this company can successfully generate other revenue."
Google has been testing additional ventures, including its comparison shopping site Froogle, Gmail electronic mail service and local search advertising as it faces growing competition from Yahoo and Microsoft's MSN.
According to JupiterResearch, local search spending will grow more slowly than total online advertising or paid search, rising to $879 million in 2009 from $502 million this year.
"There's not a really attractive model here for local marketers" from restaurants to dentists, Elliott said. "They still want you to walk through the door."
The rise in search prices per click also will lose steam, growing 26 percent to 36 cents in 2004, then slowing in 2006 to incremental annual growth of 1 cent to 2 cents per click.
At the same time, advertisers have already begun to scrutinize the rising cost of search marketing and demand more precise ways of tracking the effect of their spending.
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posted by Jen @ 6:32 AM
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