Agencies: Global Search Spend Growth Slows in Q2

Global growth in search marketing spend slowed in the second quarter, according to reports from two large agencies, Covario and Efficient Frontier. Data released this week is consistent with an earlier report from Citibank.

According to Efficient Frontier, search spend grew only 8% in the second quarter, as compared to the same period in 2010. Covario, which reported numbers from its tech and consumer electronics clients, said growth in paid search advertising was up only 7% in Q2 compared to a year earlier. The first quarter was up 26% compared to the same quarter a year ago, according to Covario.

Things were even worse in the U.S., according to Covario. The agency noted that spending in the Americas region was down 16% in Q2 from Q1 of this year, and down 5% from the same period a year ago. Efficient Frontier didn’t provide U.S.-specific data.

The agencies attributed the overall slowdown to a few factors. Both agreed that the fast pace of growth in Q1, and from the first to the second quarter of 2010, were hard to keep up with. Covario also believes marketers spent so strongly in the first quarter, that they had to keep their Q2 budgets restrained to keep consistent with first-half budgets. Efficient Frontier, meanwhile, said advertisers shifted their strategy to focus on ROI instead of volume in the second quarter. A slowdown of the economy in Europe generally was also a factor, according to both companies, and Japan hasn’t yet recovered after the earthquake in March.

Covario said advertiser spending on Google was down 11 percent globally from the first quarter, and up 4 percent from the second quarter of last year. The Yahoo-Bing search alliance saw 21 percent less spending in the second versus the first quarter, and it was down 12 percent from the year-ago period. Efficient Frontier looked at search engine share, instead, noting that spending share commanded by Google dipped slightly, from 79.2% to 78.5%, as compared to the previous quarter. Yahoo-Bing benefited, growing share from 20.8% to 21.5%.

Related Topics: Channel: Strategy | Stats: Spend Projections

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About The Author: is Executive Features Editor at Search Engine Land and Marketing Land. She’s a well-respected authority on digital marketing, having reported and written on the subject since 1998.

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  • Kevin

    Hmm, interesting as this data doesn’t match with that coming from Marin, Didit.com, or RKG.

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