As the market for display advertising continues to look gloomy, it’s instructive to look at trends in the supply of search traffic now that demand (at least for search and contextual traffic) is up in the air.

I took a look at Hitwise’s most recent press release about search market share, and noted that Google gained search market share, at the expense of Yahoo, MSN and AOL, from September to October. Looking back over the entire past year, a trend is clearly developing: Google is slowly accreting search traffic and solidifying its dominance over Web search. And overall search engine traffic continues to inch upward.

What does this mean?  It means the relatively rosy predictions of healthy contextual ad growth aren’t off-base. The search advertising market includes both ads delivered directly on SERPs and those served on publisher sites via contextual ad networks (the largest of which are owned by the largest search engines themselves), and publisher sites continue to receive growing quantities of searches from the largest search engines. The chart to the right demonstrates that navigation via search engines (especially Google), despite consolidation of the blogosphere, substantial weakening of online retail, and competition from social networks, hasn’t slowed, and there is no reason why it should with a softening economy. (Searching is still free, right?) Combine that with the fact that performance-based, measurable-response advertising is the least likely to get cut from advertising budgets, and you have a relatively sanguine outlook…for contextual advertising, at least.

This entry was posted on Wednesday, November 19th, 2008 at 5:32 pm and is filed under Online Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.