The size of the UK market for Search Engine Marketing will grow to £1.41 billion by the end of 2006, a 65% rise from £855 million in 2005, according to research published in E-consultancy’s 2006 Search Marketing Buyer’s Guide.

The new report replaces the 2005 Search Engine Marketing Buyer’s guide and looks at both organic search engine optimisation (SEO) and paid advertising.

Key points include:

  • The UK Paid Search market, which more than doubled in size during a remarkable 2005, will grow to £1.26 billion in 2006, a 67% increase on 2005 when Paid Search was worth £757m.
  • The market for Search Engine Optimisation, also known as natural or organic search, will be worth £147 million by the end of 2006, up 50% from £98 million in 2005, according to E-consultancy forecasts.
  • While Paid Search will begin to slow down slightly, the pace of growth in the SEO market will continue to accelerate as more companies understand the importance and value of ‘natural’ search engine visibility.
  • Growth in the market for SEO services increases as more businesses grasp the importance of visibility on natural listings for financial and brand objectives.
  • Marketers are becoming more savvy about Paid Search ROI. PPC keyword deflation will continue to occur in some sectors, as a correction to initial over-enthusiasm.
  • Search is increasingly being built into overall marketing plans as it becomes more strategic.
  • There is increased awareness about the need for ethical SEO.

E-consultancy analyst Linus Gregoriadis said: “Marketers will continue to increase their investment in Search because of the attractive returns and its accountability. The market will remain extremely buoyant through 2006 and beyond, though we expect the upward trajectory of Paid Search to flatten slightly as the market becomes more mature.”

Chris Lake, E-consultancy’s editor, added: “It has taken a bit longer than for Paid Search, but we believe that SEO has now also reached a ‘tipping point’. SEO only accounts for 10% of total SEM spend but expect this proportion to increase. There is still a massive opportunity out there for companies who are currently overlooking the revenue-generating and brand-building opportunities of high natural search listings.”

Another excellent report from E-consultancy and well worth purchasing.