Spending on search engine marketing will nearly triple by 2009, according to JupiterResearch, a division of Jupitermedia Corp. The forecast, released Monday, expects the market for paid search to grow 189 percent from $1.9 billion in 2003 to $5.5 billion in 2009.

The use of pay-per-click services like Overture and Google’s AdWords program has exploded in the past year. Many individual real estate agents and brokerages use paid search to advertise their Web sites to online home shoppers.

The sharp rise in the cost-per-click of paid search and the increase in paid clicks will drive this market. The company expects the average click price to jump to 47 cents in 2009, a 62 percent increase from 29 cents in 2003.

As prices rise, the return-on-investment from search marketing has started to fall. Search marketers can still achieve a positive investment return, but only through an increased focus on measurement and more intelligent bidding.

A JupiterResearch executive survey found that just one-third of search marketers consider historical effectiveness data or the cost of goods sold when bidding for paid listings. Over half of search marketers use unsophisticated bidding strategies or no specific strategy at all.

“Due to rising prices, many of the search marketers that used to get a great return on their investment are now only getting a good one,” said Nate Elliott, associate analyst at JupiterResearch. “As ROI continues to fall, marketers will need to do a better job measuring and optimizing their search campaigns. By improving efficiency, search marketers will be able to keep up with the higher prices and still profit from search leads.”

The complete findings of the forecast are available through Jupitermedia.

Darien, Conn.-based Jupitermedia provides original information, images, research and events for information technology, business and creative professionals.

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Send tips or a Letter to the Editor to jessica@inman.com or call (510) 658-9252, ext. 133.

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