Wow, that’s a number. Let’s take this statement to try to calculate what this means in terms of search engine marketing budgets in Asia:

1. To start with we need to set a few numbers. As we don’t exactly know we have to assume:

• Average click-through-rate (CTR): 1.5%
• Average cost-per-click (CPC): 0.20 USD

2. Amount of Internet users:

I did a small table because I wanted to break the total amount of Internet users in Asia down to single markets. For this I used the statistics of the World Factbook.

As you can see, the amount of Internet users I came up with differs from the amount in the initial statement. So, in order to keep relations, we also have to adjust the amount of total searches.

450 million Internet users = 20 billion searches
525 million Internet users = 23 billion searches

3. Calculation:

• 23 billion searches x CTR of 1,5% x 0.20 USD CPC x 12 months =
  828 million USD per year click budget in Asia spent

Is that so? Let’s make a test backwards to put these 828 millions into relation:

• Baidu alone had a revenue of 227 million USD in 2007 (source: wikipedia), which mainly comes from online advertising. For 2008: expected growth of 20% = 272 Mio. USD
• Baidu has a market share of appr. 63% in China, i.e. the Chinese market for keyword advertising is 431 million USD (227 million / 63% x 100%).
• And, as the above table shows, China’s Internet users make up for about 48% of Asian Internet users.
• So: 431 million USD / 48% x 100% = 898 million USD

Well, that’s not the same but rather close. We assumed a few figures such as

• CTR and CPC
• CTR could be actually much higher, due to Baidu’s advertising display strategy
• Baidu’s revenue would probably not totally come from keyword advertising

Anyway, there are good reasons to say that the market size for keyword advertising in Asia is currently somewhere between 800 and 900 million USD.

4. Finally, we can again break the Asian market size for search engine marketing down to single Asian markets:

5. Here is what other resources say:

• In Q3/2008, market size of keyword advertising increased by 19.3 per cent quarterly to 1.464 billion yuan, accounting for 43.8 per cent of the Internet advertising market. (lexisnexis)
• Search engine advertising accounted for 27.3 percent of the market in terms of value, up 4.3 percentage points over the previous year, and it was predicted to hit 30 percent this year, the report said. (highbeam)

Recent global market shares of search engines (I/2008, netapplications.com):

Broken down into Asian countries, Google’s markets share looks like this:

I did some research and compared the positions of the search engines in the following Asian markets. If available I added the rough percentages in market share, sometimes the available numbers vary really heavily. Total percentage per country can exceed 100% as users use more than one search engine (depends on the source). Anybody got better, more accurate or additional numbers, just post them, I’ll update the chart.

It is very obvious that Google’s global market share is nurtured by high market shares in the US and EU. In some parts of Asia local search engines and Yahoo are often preferred. Why is that?

Possible reasons:

• missing language adaptation, Google mainly dominates English-speaking countries
• poor management skill, read the comments of this article
• local search engines better serve the desires of the search engine users. Example: Naver in Korea with a total different search result page layout that’s been copied by Google

It is also interesting that e.g. in Vietnam Google is the market leader whereas in the Philippines Yahoo obviously leads the market. And both countries are not English language dominated, I suppose. Any explanations for that?