The Impact Of Search

A new report issued by McKinsey & Company takes a comprehensive look at search, offering insight into its global impact and economic value.

McKinsey reports that an average U.S. user in 2010 performed about 1,500 searches. Some 90 percent of online users rely on search engines (which begs the question, what are the other 10 percent doing?) Globally, around 1.6 trillion searches are performed each year. Approximately 25 percent of traffic going to mainstream content creators on the web is referred by search engines.

Apparently, users get a lot more out of search besides locating the desired information. According to McKinsey, there are nine primary sources of “search value”: better matching of relevant information, time saved, raised awareness about the searched information, getting the best price, long-tail offerings (niche items that a small number of customers might want), people matching, problem solving, new business models (such as price comparison sites), and entertainment (specifically, search helps navigate available digital music and video).

As you might guess, the report finds that the domination of search engines is being challenged by social networks. The use of social networks to access content grew dramatically from 13 percent in 2008, to 20 percent in 2009, to 33 percent in 2010. The use of search engines dropped from 69 percent in 2008 to 65 percent in 2009 and 66 percent in 2010, no doubt impacted by the rise of social media. The use of bookmarks/favorites declined from 37 percent in 2008 to 28 percent in 2010, while portal website usage declined from 26 percent in 2008 to 19 percent in 2010.

The search industry was responsible for worldwide revenues of $40 billion in 2010 derived from three main segments: enterprise search, local and classified search, and search marketing.

McKinsey reports that 40 percent of online advertising dollars are spent on search advertising. That translates into about 6 percent of the total advertising budget (online and offline) invested in online search advertising globally. In the U.S., 48 percent of online ad dollars go to paid search. Advertisers deploying search earn an average ROI of 7:1. Clearly, search remains a significant promotional avenue for advertisers, but again, the growth of social media is causing advertisers to shunt at least some of their budget to Facebook, Twitter and the like.

The value of search to U.S. content creators in 2010 was somewhere between $2.2 and $2.9 billion, according to McKinsey. A much tougher question to answer, says McKinsey, is “exactly how much value does search create?” The firm says no one has looked at the value of search by country or globally before. Based on the nine sources of value identified previously, McKinsey estimates a gross measured value created by search in the U.S. in 2009 of $242 billion — but the firm cautions that this is a conservative estimate. That’s a contribution of over 1 percent to this country’s GDP (Gross Domestic Product). Globally, says McKinsey, the gross value created by search in 2009 was $780 billion, again a conservative figure.

All of these statistics may appear to be somewhat bewildering, but the underlying message is clear: Search, which is only twenty years old, has had a widespread and profound effect on the way people use the Internet, and the way advertisers make money on the Internet. Both its technological and economic impact are awesome.

About Barry Silverstein

Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to Brandchannel.com, the world’s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.

6 Responses to The Impact Of Search

  1. SEO-Resseler says:

    thank you for this statistics  Barry.Search engines now are really the most visited sites on the in the Internet .According to another research more than 68% of users uses Google and more than 18% use bing and other engines to find what they want that why most of the marketers are searching for effective methods to rank their site up so they get more costumers and SEO and SMO are the most used methods to dFor more visit http://www.zenoseo.com/seo-reseller

  2. Mel Lifshitz says:

    That’s blunt statistics in there.  No wonder SEO is a multi billion dollar industry.

  3. This
    is an enormously good and worthy column you have written here. your provided
    info must be to take into consideration, thanks for sharing this post.
     

  4. Well as far as features is considered McKinsey brings
    multiple functionalities for advertising world, getting advanced results
    through SEO strategies is one of the best approach to gain high traffic.
     

  5. It is a great news for SEO’s… I really like this statistic….

  6. Airport Taxy says:

    Great post full of useful tips! My site is fairly new and I am also having a hard time

    getting my readers to leave comments. Analytics shows they are coming to the site but I have a feeling “nobody wants to be first”.

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