Study: Paid search to continue climbing

Jupiter says the search market will expand to niches such as travel and financial services.

Paid search is expected to grow faster than any other sector of online advertising, increasing from US$2.6 billion in 2004 to US$5.5 billion in 2009, according to a new study.

In addition, the search market is expected to become more specialized, as search focuses more on specific categories, according to the study published last week by JupiterResearch. Specialized search in four categories--retail, financial services, media and entertainment, and travel--accounted for 79 percent of the paid search market in 2004, Jupiter said.

Paid search spending is high in these sectors because a significant portion of commerce in these areas has shifted online, the market researcher said. Jupiter predicted that the online travel market will grow from US$54 billion in 2004 to US$91 billion in 2009, for instance, and online shopping will grow from US$66 billion in 2004 to US$130 billion in 2009.

Jupiter predicts that the success of specialized search will result in broad-based search engines spinning off search tools for specific niches, a similar route taken by television and print publishing markets.

"The trend will cause a sea change in how advertising spending is allocated online," Jupiter analyst Niki Scevak said in a statement. If "media firms do not seize this opportunity, search engines like Yahoo and Google, as well as a number of established and start-up vertical search engines like and Sidestep will enter to satisfy the market demand."

The growth in media and entertainment search engines will be driven by classifieds, Jupiter said. Online classifieds are projected to grow from US$1.9 billion in 2004 to US$3.7 billion in 2009.