Search ads – 50% of the online ads spending

This might have seemed an utopia a couple of years ago, but Search ads now have over 50% of the total online ads spending. This affirmation is available for the US (as the latest Morgan Stanley report says), and maybe for UK (not sure though) and a couple of other big online markets.

As you can see in the picture bellow, things were a little different 5 years ago. Search Advertising had just 15% market share, while Banner ads were the big thing, with 47%. In just 3 years, from 2002 to 2005, things changed drastically. Let’s see why.

First, a huge number on small businesses went online. They couldn’t afford buying the so expensive banner ads so they needed a method to attract visitors and customers, but cheaper. And one that would convert and would have a good ROI rate. And they found what they were looking for in "search ads". That had a couple of advantages: people clicking your ads would already be interested in your products (cause they were searching for them), you could run campaigns no matter how small your budget wass and you would pay only when a visitor clicks your ad and comes to your site.

Supporting this theory, you can see in the graph bellow that in the last years, most of the online queries that resulted in something being bought (from new customers) came from paid searches, with organic traffic trailing in the second position but loosing ground.

On the other hand, the big online fishes also realized that putting money in banner ads is not a always a good idea. Might be OK for awareness and branding campaigns, but not if you are looking for a ROI. That’s why they went towards "search ads" too. And there are others smaller reasons too.

In the end, you can see that in 2007, "Search ads" had 52% of the money spent online. They stole percents from Banner ads and e-mail campaigns. Because they were better.

In my country (Romania) though, things are still on the same level they were in the US in 2000-2002. Banners ads are still the big thing and all the Big online agencies use them. But hopefully, while clients get smarter and more web savvy, they will learn what to demand and we’ll get rid of the intrusive expanding banner ads for good Hopefully.

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