The search marketing business is still young but prospects for growth are phenomenal.

Geoff Ramsey, CEO of eMarketer, underscored the potential for growth when he noted that search marketing is only at 10% of its potential size. Mr. Ramsey devoted his speech to three key themes that he says will drive the future of search marketing: richer video, mobile devices, and smarter personalization. All told, Mr. Ramsey pointed out that $5 billion was spent on US search marketing in 2005 and predicted that $10 billion will be spent in 2009.

Metrics, along with click fraud, was one of the key points of discussion at the Expo. "The information that comes out of search is transferable to other kinds of marketing. It has measurability and accountability, which are wide open in other areas," noted Tim Armstrong of Google. "Most agencies competitively aren’t set up to manage their business from a spreadsheet the way search marketers do. They shouldn’t be nervous, but they should be putting energy into understanding metrics."

Gerry Campbell of AOL also underscored the importance of metrics. "The value of metrics is transforming other marketing disciplines, which are placing more emphasis on using data to target consumer intent and deliver relevant messages in all forms of advertising," he said.

In a survey by IntelliSurvey Inc. and Radar Research, published in December 2005, 80% of respondents said that increased traffic volume was among the metrics used to measure search advertising success. Also cited were conversion rates and click-through rates.

Barry Diller, CEO of IAC/Interactive Corp. and the keynote Expo speaker, had some possibly prescient comments on the future of search. Mr. Diller admits that with his revamped (his once-faithful butler, Jeeves, was sent packing late last year) he has some way to go if he is going to seriously compete with the three leaders in search. Mr. Diller believes that vertical search is the way of the future and that traffic is directly related to the extent to which a search engine can provide local results.

More here.