Report: Google Leads U.S. Search Advertising Market With 76% Market Share

Efficient Frontier today released the findings of its quarterly analysis of U.S. paid search activity. The report was based on an analysis of 92 billion impressions and 600 million clicks across a portion of Efficient Frontier customers during the fourth quarter of 2008, which includes some of the world’s largest brands. According to the report, Google has maintained its hold on the search advertising market with 76 percent market share, and Yahoo continued to increase its presence, gaining 3 percent market share year-over-year.

Despite the economic downturn and reports of the erosion of other marketing channels in 2008, the index of Efficient Frontier customers included in the Q4 report saw a minimal 8 percent decrease year-over-year, while the retail sector saw a 9 percent uptick in spending year-over-year, an indication of the strength of the search marketing channel.

Additional search engine marketing trends

• Small advertisers in the U.S. accounted for a greater decrease in search advertising spend than larger, more established brands
• Overall impressions for search engines are down 6 percent year-over-year
• Overall click-through-rates (CTRs) in search were relatively flat year-over-year, gaining only 2 percent
• Overall search cost-per-click (CPC) is down 5 percent year-over-year
• Automotive industry spend declined 15 percent, due primarily to lower impression volume, reflecting weakness in consumer demand.
• Financial service spend declined 20 percent despite impressions being up by 5 percent reflecting high customer demand for financial services, with but fewer qualified conversions
• Retail spend increased 9 percent, reflecting the strength of the channel in price comparison and shopping efficiency, particularly for more established online brands
• Travel and Entertainment spend decreased 24 percent, primarily due to reduced traffic volume, which is down in by 18 percent in the sector year-over-year

The full report is available by request from Efficient Frontier’s web site.