What is the overall market size of SEO?
What is the expected growth of digital marketing this year and beyond?
This high-level SEO industry growth report will give you a sense of the overall size, scope and expected growth of the digital marketing industry.
Table of Contents
Disclaimer & Executive Summary
Please consider the following key points relative to this market report.
- This report on the SEO & digital marketing industry provides detailed expert market size and market growth estimates for digital marketing/SEO consultants, search engine optimization (SEO) agencies, SEM firms and other companies who provide expert consulting for internet advertising. The report includes detailed discussion of the United States as well as global statistics.
- This market report is not comprehensive, but represents a collation of various market reports and research reports performed by reputable third parties. The research included herein should not be wholly relied upon to make complete, accurate or timely business decisions, including investment decisions.
- Related, ancillary services and firms provide various overlapping services, including–but not limited to–website design, public relations, management consulting, advertising & market research/analysis and IT consulting.
- The numbers discussed below do not take into account obscured data, including services provided by white label SEO companies.
- We encourage those interested in further detail based on the findings presented to further consult the original research sources referenced herein.
IBIS World Statistics
- Total SEO industry revenue was $52 billion USD in 2021
- Overall industry profit for 2021 was $3.1 billion USD
- The expected annual growth between 2020 and 2025 is 3.5%
- There are over 125,000 total companies servicing the SEO and digital marketing industry
- The expected growth in internet traffic from 2020 to 2025 is 26.4%
Market Report World
- The expected growth in industry revenue from 2020 to 2024 is $740 million USD
- The expected compounded annual growth rate from 2020 to 2024 is 15%
Borrell
- The expected market size of the industry in 2020 was $79.3 billion USD
As one might expect, significant variation exists between assumptions on market size and growth.
However, some reports take a look at industry specifics like SEO and digital marketing SaaS, including MarTech, while others focus specifically on direct digital marketing and SEO services. Despite the variation, key indicators, including the SWOT and industry analysis below reveal additional details on whether or not it makes sense to enter the SEO business.
SEO Industry Performance
Historical performance for SEO & digital marketing industry.
SEO Industry Lifecycle
Demand lifecycle for digital marketing and SEO relative to market maturation.
SWOT Analysis
The following provides a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis of the SEO market.
SEO Industry Products & Services
Products and services provided by agencies, service providers, SaaS/MarTech companies in SEO & digital marketing. Source: Borrell.
Spending by category
- 53% of industry budget and spend was for “web presence”
- 17% of industry budget and spend was on “online ad production”
- 12% of industry budget and spend was for “online marketing support”
- 9% of industry budget and spend was for “online public relations”
- 9% of industry budget and spend was for “consulting and research”
Major Market Segments in SEO
Major markets that typically engage SEO and digital marketing service providers. Source: IBIS World.
Major Market Segments by Sector
- 30% of the industry is from retail trade and consumer goods
- 21% of the industry revenue is from travel, entertainment and media
- 18% of the industry revenue is from internet and telecom
- 11% of industry revenue is from other business
- 10% of industry revenue is from financial services
- 10% of industry revenue is derived from healthcare and pharmaceuticals
Major Competitors
As a highly-fragmented industry, industry researchers do not believe that any single SEO agency or digital marketing company represents more than 1% of the overall industry pie.
Conclusion
Strong opportunities remain in the SEO & digital marketing industry.
Continuous innovation makes the advertising industry a dynamic sector. Prior to recent memory, advertising was primarily concentrated in print and broadcast media. Significant shifts to internet marketing continue to occur, especially as more brands push toward direct-to-consumer (DTC) advertising options through online search, social media and other digital channels. Furthermore, the proliferation of mobile phones, tablet and desktop computers is expected to continue to see the rise in the digital marketing industry. These shifts are also creating shifts in consumer media consumption behavior. As a result, advertisers are expected to follow consumer demand of digital media.
In fact, according to the Internet Advertising Bureau (IAB) internet advertising revenues increased nearly 54% from the years 2013 to 2018. Increased demand for industry services is expected to expand the industry further in 2020, created anticipated earnings before interest, taxes, depreciation and amortization (EBITDA) of nearly 7% of overall industry revenues. Even in spite of pandemic pressures, the industry is expected to continue to grow over the coming four years (through 2025), albeit less rapidly than in years past.
Frequently Asked Questions (FAQs)
What are the major profit stats and drivers?
Industry EBITDA accounted for roughly 6.7% of revenue in 2020. This represents a slight decrease from 2015 when EBITDA margins were 8% of revenue. Profit remains higher among larger industry players.
What are expected industry COGS (cost of goods sold)?
COGS (cost of goods sold) in the SEO and digital marketing industry are low, representing only about 1.4% of revenues. Most of these expenses are related to software and office-related products.
What are Industry Depreciation Expenses?
Industry depreciation expenses relative to revenue were <1% in 2020.
What are typical wages in the SEO industry?
Wages in digital marketing accounted for some 38.8% of revenue in 2020, up from 37.6% in 2015. The industry remains reliant on heavy labor inputs, particularly on the consulting side.
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