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Wednesday, 22 February 2012

The Daily Stat: The Share of Search in Online Advertising

41% of Canadian Online Advertising Revenues is Earned by Search
Source: IAB 2010 Canadian Online Advertising Revenue Survey

According to the 2010 Canadian Online Advertising Revenue Survey published by the Interactive Advertising Bureau (IAB), advertising on search engines such as Google, Bing and Yahoo takes the biggest share of online advertising revenues in Canada. In 2010, search advertising revenues amounted to $907 million or 41% of the $2.2 billion industry. Without a doubt, search has been a staple of online life because of its utility to users and its value as a source of referral traffic to advertisers. But with the rise of alternative advertising channels namely, social media, will its lead remain?


The top 3 search engines in Canada


The search industry will soon approach maturity. According to comScore, consumer growth is no longer driving the market in Canada. Growth in the industry overall will come mostly from getting the remaining businesses in Canada to go online and spend on ads. Google estimates that over half of Canada's 2.2 million small businesses have yet to establish a web presence.
Moving forward, search engines will be unable to offer any radical innovations to their product that will be of substantially more value to advertisers to cause them to spend more money in general. Perhaps the final frontier in search innovation lies in mobile and location-based search. After this, I'm guessing any further innovations will be marginal, resulting in only slight increases in search budgets overall.
Display ads on the other hand will continue to grow in the long-run, driven by ongoing innovation in consumer interaction that you simply can't do with search ads. With that said, I expect search to remain an important part of the online marketing mix and continue to be a major presence with a substantial share of online revenues. I simply don't see people's need for search disappearing anytime soon.

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