Report: Lack Of Buying Searchers Leading To Depressing Search Ad Market

I have been fascinated watching how the search ad space has been impacted by the current global recession. Rimm-Kaufman has posted early first quarter PPC data showing the weak trends in retail for search advertisers. Let me summarize his retail client data:

• Approximately 20% reduction in sales from search ads from last year
• Approximately 20% reduction in his costs from search ads from last year
• The average order value from search ads dropped 10% from last year
• The conversion rate from search ads seemed to remain stable from last year
• There may be more competition in the space, but hard to prove

Rimm-Kaufman’s findings are based on this analysis:

This suggests to us that the main cause of decline is simply fewer people shopping. The people who are shopping are spending less, but the biggest dent has come from traffic.

In early January, we wrote about how the recession was impacting PPC budgets.