According to MAGNAGLOBAL paid search is the leading form of online advertising, accounting for nearly 50% (actual 46.3%) of all online advertising. To Internet marketers this is not much of a surprise but it is something that many businesses still don’t grasp.

The study predicts a steady path of growth in overall online advertising spend as seen in the chart below.

Paid search should continue to lead the way moving in to the future. The report tells us.

Paid Search has quickly become the most important component of online advertising, and in 2010 this segment will account for $29.8 billion, up by 16.5% over 2009 totals on a constant currency basis. Google remains by far the global leader in Search, although a handful of other suppliers of search advertising are dominant in certain countries. Unfortunately for Google, China and Russia – the fastest growing large markets for online advertising – pose a challenge for foreign-based search engines. Separate government actions have led to Google closing its operations in those countries. However, domestic players (Baidu and Yandex in particular) have instead become dominant. The enormous influence – and profitability – of Paid Search increases the probability of governmental involvement in many countries in the years ahead. Such actions are unlikely to constrain the medium’s growth.

The caution of government intervention into this system is something that everyone should keep in the back of their mind since it can be a huge wild card as to the impact any government actions could have on the current system.

How is your online advertising budget broken out? Do you have paid search as half of that spend? Is it more? Is it less?

Studies like this often miss what many of the smaller players are actually doing because they are not considered in the research. While it is good to keep a finger on the pulse of these trends as a whole it is even more important to know just how they impact your business and what blend of advertising options best meet your specific business needs.

Do you have thoughts to share with us?

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