The latest estimates from eMarketer put total US paid search spending at $3.6 billion in 2004, growing to $4.3 billion by 2005. Search has been popular largely because it provides a better ROI than other methods of advertising. For many companies, though, the level of ROI they derive from search campaigns is now beginning to taper off. Across the board, the average cost per keyword is creeping upward. In their March 2003 landmark report on search, Pipar Jaffray estimated back then that the average cost per lead for search was $0.29. However, in their just released June 2004 report, the cost per lead had risen to $0.45. That's still better than e-mail, at $0.55, but the gap is closing.
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