Is Singapore Ready for SEM?


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Is Singapore Ready For SEM, Specifically Google Adwords?

Companies in the United States spent USD$5.1 billion on search engine marketing (SEM) in 2005, according to the Interactive Advertising Bureau. But how big is the market in Singapore ...or does it even exist?

SEM generally means buying a sponsored link (i.e. advertising) on search results. The top 3 major search engines have a pay-per-click (PPC) program available via Google Adwords, Yahoo Search Marketing and MSN Adcenter (currently on trial in Singapore) respectively.

SEM is popular with advertisers because it derives a higher conversion rate, i.e. from site visitor to customer, and you ONLY pay if someone clicks on your ad (i.e. PPC). The search results act as a "filter", and only displays your ad to someone searching for a related item.

It comes as no surprise that Google Adwords is the leader in the SEM industry - they were the ones who popularized the concept. How big are they? Google's advertising revenues totalled USD$2.4 billion in Q2 of 2006 - a 78% increase from the same quarter, last year!

So how is the situation with SEM in Singapore? Marketing Magazine's interview with Hong Kong-based Crid Yu, Google's Head of Sales for SEA, offers an insight on this subject:
- Google is waiting for enough momentum in the local market before having an office here.
- In the mean time, Yu travels here once a month to educate potential clients.
- Difficulty explaining SEM concept to someone from a traditional marketing background.
- People have a hard time accepting the concept of keywords and having a daily budget.
- Large companies can take 3 weeks to 6 months to start a SEM campaign.
- Google has "thousands of advertisers" here - multinationals, government bodies and SMIs.
- The biggest challenge of SEM in Singapore is education.
- Online marketing accounts for 7-9% of ad spend in developed SEM markets like UK and US.

Personally, I'm not that all surprised by the results of the interview because even Steve Noton of Adverted, famed SEM company from the US, has to rely on a day job at Global Sources, Singapore ;)

Update: Google has recently appointed Authorized Adwords Resellers in Singapore.