Search marketing has held up remarkably well during the recession. But can it last?

According to Hitwise, there are signs of weakness. In the four weeks leading up to May 9, it observed that 7.25% of search engine traffic in all categories of sites it monitors came from paid clicks.

That’s a 26% decline from the same period a year prior.

In a post on the Hitwise blog, Heather Hopkins says that the trend was noticeable across almost every individual category:

This trend is apparent across 16 of the 17 Hitwise parent categories (i.e. Automotive, Food and Beverage, Health and Medical, etc).

She went on to state that “The steady and consistent decline across categories indicates that this is not an isolated or seasonal variance“.

Hardest hit: brand name keywords. Cited as an extreme example: Home Depot. During the four week period tracked, only .83% of searches for “Home Depot” in 2009 came from paid clicks; that compares to 28.88% in 2008.

Obviously it’s easy to blame these declines on the recession and slimmer marketing budgets. But as Andy Beal at MarketingPilgrim points out, brands may also be getting smarter about organic vs. paid search. Referring to the decline in paid clicks for the brand keywords, Beal asks:

Is that likely due to a reduction in spend, or Orbitz et al figuring out that they really don’t need to spend so much on paid advertising–considering they’re #1 in the organic results?

Bingo.

Ironically, one has to wonder if the reported boost Google has given to brand websites could contribute to the declines Hitwise is seeing. After all, if those brands see more (free) organic traffic from Google, they’d have good reason to ease up on paid campaigns.

Whatever the case may be, paid search isn’t going anywhere and it’s inevitable that the landscape will change as market conditions change and as search marketers become more skilled in balancing organic SEO efforts and paid search to maximize ROI.