More search marketers than industry sales: William Blair

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The growth in total number of search engine marketers exceeds the growth of industry sales. In fact, the total number of advertisers is up an estimated 20 percent between February and July 2007, according to research conducted by William Blair and AdGooroo.

Blair partnered with AdGooroo to examine the search engine marketer trends that drive this $20 billion market.

"We culled data from AdGooroo's database of keyword advertising to glean insight into industry composition, industry growth, market share, seasonality and company-specific trends," the report says. "In total, we believe the global marketplace comprises more than 500,000 advertisers and that about 90 percent advertise with Google.

In addition, the studyáfound that Project Panama, which serves fewer, more relevant ads with each search, is affecting Yahoo's advertiser base. The system is helping Yahoo to attract a surge of new advertisers after the launch. Yahoo faced fallout, however, due to the relevancy-based ranking, which hurt some advertisers and its efforts to clean up the advertiser base, the study found.

The study concluded that Google is seeing stable growth.

"While seasonality is a factor, we believe that Google continues to enjoy steady growth in its total number of advertisers and dominates the industry with about three times more advertisers than Yahoo and nearly 10 times more than MSN," the report says.

Google's AdWords system is serving up a stable number of paid listings per search. AdGooroo forecasts continued steady and consistent improvement in revenue per search and feels Google is the "best pick" in the sector.

Competitiveness for paid search is on the rise, the study found. Advertisers appear to be very seasonal with bidding strategies. The report highlights the fact that about one-half of Yahoo and MSN's advertisers are also advertisers with Google, and that these networks attract approximately 30 percent and 10 percent of the total universe of search marketers each month.

"[What is] more important to consider is the pace at which the advertiser count is growing," the study says. "We view this information as valuable, since it provides some insight into the growth and vitality of the medium, as well as the potential competitiveness of keyword marketing.

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