British organisations will spend £2.75 billion on search engine marketing (SEM) activities this year, according to a new publication.

This represents an increase of 24 per cent compared with last year, E-consultancy’s Search Engine Marketing Buyer’s Guide said, according to Precision Marketing.

Breaking this down, the report said that search engine optimisation spending will rise 32 per cent to reach £330 million by the end of 2006, while pay-per-click expenditure will see growth of 23 per cent to hit £2.24 billion.

Despite this double-digit growth, it is not as high as the increases recorded in previous years, something that may be attributable to the slowing economy, E-consultancy editor-in-chief Chris Lake remarked.

However, he added: "Consumer internet usage is flattening out, but the sector is certainly more robust than other media channels that have a less measurable return on investment and should continue to grow for years to come."

Mark Jackson of Search Engine Watch recently commented that the level of spending going to organic and paid search appears to be somewhat disproportionate considering research suggesting that up to 70 per cent of all search engine click-throughs occur in organic listings.

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