SEM Market in India pegged at $ 225 million by 2010

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IAMAI has published a report on the Indian SEM market (Search Engine Marketing), and as per the report, industry is expected to grow from the present $112.5mn to $175mn by 2009 and $225mn by 2010.

The growth is primarily driven by:

• Increase in Internet user base : 29mn active users, expected to grow at a significant rate in the next few years.
• Increase in search
• Increase in awareness
• Increase in sectors employing SEM tactics

Online search breakdown

• Top 4 metros account for 40% of searches. Other 4 metros (31%), small metros (21%) and other cities result in 8%.
• School going kids account for 16%, College going students (26%), Young men (27%), Older men (14%), Working women (10%) and Not working women (7%)

IAMAI is betting big on outsourced SEM, but sees some hindrances:

• Lack of information about India
• Apprehensions of Data security
• Erratic behavior of exchange rates-

Globally, SEM expenditures in North America including US and Canada will reach $25.2 billion in 2011 which stood at $12.7 billion in 2007.

The study, to my surprise doesn’t take into account the big sword that’s hanging all over in the global economy- recession.

Advertising spend is dropping globally and search ads, though preferred over banner ads too is facing the heat – US SEM market is witnessing a decline and so is UK – India, being a nascent market will also suffer as advertisers will prefer the traditional channel more than Internet.

What’s your take?

Download the report.