I mentioned in a previous post we asked an MBA student at the London Business School scope out market sizes in the SEO and search tools market.
Sanjeev Sharma did an excellent job for us and I’ve decided to publish his findings below in order to help other tools startups raise funds and help grow the market.
Feel free to re-publish to the data below with a link back to this post:
We adopted the following approaches to estimate the tools market size for Organic SEO, Online-Ad placements and Affiliate marketing:
Estimating the size of customer base
GOAL: Determine # of websites paying for Organic SEO, Online-Ad placements and Affiliate marketing
- Determine # of Active websites = ~ 72 million (source: Netcraft, Feb 2010)
- Assuming 20% Active websites pay for Online Marketing based on Pareto’s Rule we have 14.4 million Paying websites
- Online Marketing Segmentation (based on US revenue data, Forrester 2010):
- Online Marketing = Interactive Marketing + Affiliate Marketing
- Interactive Marketing = SEM + Display Ads + Email + Social Media + Mobile Marketing
- SEM = Paid Search + SEO
- Display Advertising = Static Ads + Context Ads + Video + Rich Media (excluding video)
- Using the % Revenue split as a proxy for # of websites paying for Organic SEO, Online Ad-placements and Affiliate Marketing and applying in an early adoption factor based on Technology Adoption curve we have ~ 200,000 web sites
Estimating the size of user base
GOAL: Determine # of interactive marketers involved in (thereby being the purchase customers) for Organic SEO, Online-Ad placements and/or Affiliate marketing
- Estimate revenue/interactive marketer based on revenue of Top 11 US Digital Agencies (extrapolating data from Forrester and AdAge)
- Estimate # of interactive marketers in US based on revenue ratio of Top 11 US Digital Agencies and Total US Interactive Marketing revenue
- Estimate # of interactive marketers in Europe applying logic in step 2
- Calculate # of interactive marketers by skill/function i.e. Organic SEO, Online Ad-placement and Affiliate marketing using the revenue split in Step 4 (see above section)
- Estimated # of interactive marketers ~ 120,000
- SEO Tools Market – Market Size