Are PPC Budgets Increasing Or Decreasing In These Recessionary Times?

I have been hearing from many people in the search industry that the recession won’t impact the search space as much as other industries. In fact, many people feel that search will grow, while we see other industries take huge double-digit declines. I am skeptical about the search industry not taking a hit, in fact a major hit. So when I see search companies release data, I take interest.

Alan Rimm-Kaufman, who is incredibly data driven, posted an aggregate data analysis of his client’s Q4 2008 versus 2007 search ad spend. Let me bullet point the key metrics for you:

• PPC Sales: showed a growth for 35% of Kaufman’s clients but a decline for 65% of his clients in the 4th quarter of 2008 vs. 2007
• PPC budgets: 25% of Kaufman’s clients increased their PPC spend 2008 Q4 vs. 2007, while 75% pulled back PPC spend

Those results don’t seem overwhelmingly positive to me.

However, a SearchIgnite release (PDF) claims retail search spend is up 33% so far in Q4 2008, compared to Q4 2007. This is specifically retail, but still, overall search spend is up 33% for this company who manages over $350 million in paid search annually.

There are many predictions and theories for 2009 and search ad spend. Personally, I am a pessimist when it comes to the economy and I am overall worried about this industry’s growth, like I am other industries.

Brad Geddes the other day wrote a piece here named Beat the Competition by Anticipating Traffic Changes that might help some search advertisers through these more difficult times.