Online Adspend to Reach $18.9B, Search to Top Display

JupiterResearch announced today that online advertising will continue the steady growth it has seen since 2002, with total revenue growing to $18.9 billion in 2010. Paid search advertising will be critical to this burgeoning growth and will eventually comprise a larger portion of total spend than display advertising. Rich media and streaming media will also see strong growth, generating almost $4.5 billion in 2010, as will classified advertising, which will bring in $4.1 billion.

So as a Calgary Business – what does that mean to you?

Well really short-term (today) it probably does not mean much unless you are a share holder in Google (GOOG) as this announcement might effect the stock price.

However, what a study like this demonstrates is the trend of where things are going. Considering we are well over half way to finishing 2005 and 139 shopping days until Christmas, this type of research begs the questions, “Does your business have an online strategy mapped out yet in terms of how you are going to use online search?”.

The one common theme that I always come back to, is that businesses in Calgary need to ensure that have a strategy going forward, even if that is a conscious decision not to do anything. Searching for a business online will only continue to increase, at least for a few years yet. In terms of real value for an advertiser, I believe a strategy implemented today will increase in value for a business owner, at least in the short-term.

To use an example, let’s explore the keyword “calgary salons“. As of today, there are 2 paid advertisers, not of which are Calgary specific, advertising for this keyword. Conversely, look in the printed local phone book. I can count 29 display ads and many more small bold listings.

Now consider this:

What if you placed an ad Google that read something like this:

Our Beauty Salon in Calgary
Todays special – print this ad for
25% off any service. Call 555-1212

According to Overture results for last month, there were 77 searches on this keyword alone. In our experience, Google tends to out perform Overture by a 3 to 1 ratio, therefore we could assume that over 200 searches for this particular keyword were done on Google.

Now consider this; what if you were to advertise your business today, targeting this specific keyword, using an ad similar to what I have written above, what type of advantage would you have being the only Calgary business listed there? Consider how powerful this might be? If you were the only beauty salon in the local phone book, instead of competing with 29 other display ads, how much business would you get from that ad? I believe that anybody who searches for “calgary salons” is most likely in the market for salon types services.

The Jupiter Report is showing us where the trend is going. The question for local businesses, do you jump on paid for search advertising when none of your competitors are there, or do you want until their are 29 display advertisers and then decide to advertise?