Report: Paid Search Rebounded In Q3 2011

Paid search advertising grew 24% in the third quarter of 2011 as compared to the year-ago period, according to a new report by interactive marketing agency Covario. A second report on the quarter conducted by Marin Software finds that click volume increased by 22% year-over-year while cost-per-click prices were lower, indicating marketers achieved increased efficiency.

The Covario figures represent a rebound from a lull in Q2 of 2011. The agency attributes the comeback to strong back to school spending to market consumer technologies and strong growth in the Asia-Pacific region. Covario expects 2011 spending as a whole to end up 20% higher than 2011 — in line with the top-end of the company’s forecast.

Marin Software found its clients grew more efficient in the third quarter, possibly driving them to greater spend. On Google, the company saw a 19% increase in clicks on a 24% drop in impressions. This accompanied a 57% increase in click-through rates and a 18% drop in cost per-click. Marin attributed the trends to improved matching and more effective bidding.

On Yahoo and Bing — which typically have delivered greater performance, but lower volume — Marin found clients investing more. The company saw a 43% higher click volume at a 10% lower cost-per-click. Click-through rates declined by 10% year-over-year, but improved 9% from last quarter, which Marin interpreted as coming from improved ad matching or better traffic.

(Efficient Frontier released its own Q3 research earlier this week, also taking a look at the Google/Yahoo/Bing trends.)

Marin found that advertisers’ improvements in efficiency have come, at least in part, by the increasing use of more specific match types, moving from Broad to Phrase or Exact — increasing relevancy and click-through rates. By increasing use of Exact Match, Marin says they’ve grown their click share by 6% while increasing share of spend by only 2%.

This improvement in efficiency is expected to drive additional spending in 2012, according to Covario. The company’s advertisers expect to spend 18 to 22% more in 2012, with 18-20% growth in North America, 15-18% growth in Europe and the Middle East, and 40+% growth in the Asia Pacific region.

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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