WildBlueSkies - Trends and strategies in Digital Media

According to SEMPO’s 2007 State of the Market Survey, North American spending on SEM for 2007 was almost $12.2 billion says this article in ClickZ. Paid placement accounted for 87 percent of overall spending, or $10.6 billion, while SEO accounted for approximately 11 percent, or almost $1.3 billion. Further, 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.
According to the report’s executive summary:

SEM is poaching budget from other marketing channels, especially from offline marketing channels. This represents a marked difference from 2005 when budget was shifted mostly from online media such as Web development and affiliate marketing but is consistent with spending in 2006. However, the degree to which certain channels are cannibalized is much higher than in the past surveys. While about a third of advertisers report their funding for paid placement programs and organic SEO came from newly created budgets in 2007 (32% and 35%, respectively), advertisers are for the most part shifting budgets from other marketing platforms. A third of advertisers report they are shifting budgets from print magazine advertising (up from 20% in 2006) and over one in five advertisers (22%) are cannibalizing their Web site development budgets. Other channels affected by a shift in spending include direct mail (17%), print newspaper advertising (15%), and TV advertising (13%).

Filed under: Business, Statistics