The answer is : $5.75 Billion.

Seems like people are spending some big bucks on Search Marketing — including Pay Per Click Search Marketing and Search Engine Optimization. According to a research report released by Search Engine Marketing Professionals Organization, advertisers in the U.S. and Canada spent $5.75 billion on Search Engine Marketing in 2005, a 44 percent increase over 2004 spending.

The survey found the bulk of the SEM spending was spent in 2005 on paid placement, accounting for 83 percent or $4.7 billion. While four out of five advertisers report they engage in organic search engine optimization (SEO), organic SEO accounted for approximately 11 percent of overall spending; paid inclusion accounted for just 4 percent of overall spending; and SEM technologies, including leasing, agency solutions and in-house development, accounted for less than 2 percent of overall spending.

Other highlights of the survey :

• Google and Yahoo still command the lion’s share of Internet advertising.
• Branding, sales, leads and traffic are the top objectives of paid placement programs.
• Little SEM funding is newly created; most is shifted from other programs.
• Advertisers and agencies are approaching their pricing limits.
• SEM agencies need to prove their value-add to advertisers.

You may read the press release about the report here.