Reliable reports based on a study conducted on Search Engine Marketing service sector shows that the SEM industry will see a great growth and the expenditure on SEM services will increase between 24 percent and 32 percent.
Researches conducted by E-Consultancy services, search engine marketing expenditure will increase by 24% and paid search services will increase by 23%. A major portion of this money is directed towards pleasing Google! Yes Google will continue to rule the search market as per the study results published by E-Consultancy. So it would then imply all the businesses that invest a lot of money to gain better visibility in Google the search engine with highest number of users. Over 80% of the internet users use Google’s search engines and this will continue to be so.
The increasing online competition is the major cause for this increase in SEM expenses. What we need to take note here is that along with the increasing expenditure business cannot expect proportionate ROI. In spite of allocating higher budget for SEM efforts, business owners have to be contented with the limited returns that they will be getting. Online competition is also going to increase to unprecedented levels and the ROI is less measurable when it comes to online channels when compared to the other means.
According to the E-Consultancy research UK will spend £2.75bn this year and it states that UK market “remains buoyant despite fear about an overall advertising downturn”. The ad industry will be affected by the economic concerns of the industry and we cannot expect the ad industry to be totally immune to the pitfalls. However, the internet usage will continue to increase which will create a vicious circle of demand vs. supply but this will continue to reduce the return on investments made on search engine marketing efforts and at one point it will get saturated. Then new methods are likely to sprout changing the shape of online advertising and marketing.
The increased growth rate however when compared to the previous is low. There are number of reasons for this downturn. How are the SEO and SEM companies to respond to this changing trend? What we observe today in the UK will occur in the other markets including US and other parts of Europe. This is bound to become a global phenomenon.
The question is, whether this trend is good or bad for the SEO and SEM firms? There is an increase in the amount of money consumers are spending on the SEM companies but the rate of increase has slowed down and it has been pointed out that this trend will continue for a considerable period of time which should make the SEM companies look alternative means of increasing their revenue.
People will think twice when the ROI keeps dropping down; they will look for alternative options to promote their business besides the online promotion. They would no more have a justifying reason to invest further on search engine marketing. Businesses too have to have strategies that will help them to stand out in the midst of heavy competition.
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