July 12, 2004

The PPC search industry in Australia will be worth about $70 million in 2004, and will grow to $250 million in 2008, as the demand for pay-per-click advertising grows.

The findings are in the first independent analysis of this burgeoning category of online advertising, to be released today by Frost & Sullivan.

The industry's strength was in its "cost per lead" model, the report says. Advertisers only pay for each click through to their website — as opposed to paying per ad viewed ( one of the reasons for the downfall of online banner advertising) or paying for each sale generated.

The price per click paid by advertisers ranged from 10c to $58, Frost & Sullivan senior analyst Foad Fadaghi said.

Eighty-six per cent of advertisers surveyed said they were satisfied with the return on investment from search marketing.

Search marketing in Australia is dominated by three players: Google, Yahoo! subsidiary Overture and Telstra's online directory business Sensis.

IT Today understands Google has more than half of the market and Sensis between 10 and 15 per cent, although neither company would comment.

Microsoft is expected to shake up the market when it launches its own web-search service later in the year.

Mel Bohse, who manages the Overture's local business, said she believed the Frost & Sullivan projections were "conservative".

Ms Bohse said Overture would introduce a local search service at the end of the year, adding it would benefit "not just those who have a website but also those brick-and-mortar companies who don't have a website at all".

Google has a US localised search beta, while Sensis, publisher of the Whitepages and Yellowpages directory, already has an advantage in this area.

But it's not all clear blue skies for search marketing. The report says traditional companies might be cautious of getting into bidding wars to have their ads placed alongside popular keywords.

Source: Australian IT

        

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