Google Gets 75% Of Paid Search Clicks & Dollars: Report

Three of every four paid search clicks happen on Google, and 75 cents of every paid search dollar is spent on Google. That’s according to the latest quarterly report from Efficient Frontier, a search advertising agency that manages more than $750 million in annual digital spending annually. The stats cover Q4 of 2009, and show Google’s share of paid search clicks rising from 71% in Q3 to 74.4% in Q4. Yahoo’s share of paid clicks, meanwhile, dropped from 24.4% in Q3 to 21% in Q4. Bing’s share was down slightly, but remains up 31% year over year.

The numbers are similar on the spending side, Efficient Frontier reports. Google is the clear leader, but the company’s 74.5% share is actually down year-over-year. For the year, Yahoo remained steady at 20.4% of spend, while Bing grew 25% from Q4 2008 to Q4 2009.

The report offers an overall positive outlook on search advertising. Efficient Frontier says the retail sector led a strong Q4 2009 that was up 6% from quarter to quarter and from year to year. Retail advertisers spent 17% more in Q4 than they did a year earlier, but retail CPC was down 9% from Q4 2008 levels. The report suggests lower cost-per-click may be due to search engines experimenting with new ad formats:

“Google and the other engines are adding more features to provide comparative shopping data within the SERP, a move that is likely contributing to a retail CTR drop-off of over 40% YOY.”

Looking ahead, Efficient Frontier is optimistic for 2010. The company expects that a “moderate amount of CPC growth will accelerate growth in Q1 and throughout 2010,” and that “2010 spend growth will exceed earlier estimates of 10-15%.” The report also predicts solid growth for Bing in 2010, saying that a 30% gain is possible, which would put Bing between 6-7% of click share by the end of the year. But there’s also a warning that Yahoo’s falling share of paid clicks could offset Bing’s gains if and when the Microsoft-Yahoo search deal is approved and takes effect.