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There's an insightful article over at the Financial Times today that talks about the oddity of an industry that can account for such a large percentage of online advertising spend despite taking up just 5% of a user's time online.
From the article:
But, looked at another way, the search engines run by Google, Yahoo and MSN have a weirdly high share of internet advertising. Most people spend 95 per cent of their time on the internet doing other things than searching. They read new sand entertainment sites, send e-mail or instant messages, blog about their beliefs or even display indecent photographs of themselves.
So 5 per cent is the number that Google, Yahoo and Microsoft's MSN Search should worry about: the amount of internet time devoted to searching. Perhaps it is even lower, since a lot of searches are so broad and unconnected with any impulse to spend money that no one will buy a linked advertisement. Whatever it is, an awful lot of advertising revenue flows from a single digit.
The article goes on to talk about the possible shift toward more behavioral targeted advertising and wonders whether it may eventually have an impact on search's reign over the world of online advertising. While it's possible, it's also important to remember that search engines are also working on behavioral targeting and demographic targeting that's likely to help increase the ROI of search advertising campaigns down the road as well.
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