RKG Report: Search Growth Declines Slightly; Shakeup In Store For Shopping Space

Paid search’s growth rate slowed a bit in the second quarter of 2012, but it still increased 29% year-over-year — down from a 32% year-over-year growth rate in Q1. That’s according to the RimmKaufman Group’s latest report on digital marketing, released this week.

Generally speaking, CPC’s were down (6%) as compared to the same period last year, but click volume increased fairly dramatically (37%). RKG put together the report using stats from its clients, which include more than 30 of the top 500 etailers.

Trends varied from engine to engine. Google’s paid search spending grew only 32% in the second quarter, as compared to 36% in the first quarter. Click growth stayed mostly the same, but costs-per-click were 10% lower in Q2 as compared to the 2011 period. Compared to the first quarter, however, CPCs were up 4%.

On Bing and Yahoo combined, spending grew 16% in Q2 as compared to Q1, which was an improvement from 10% year-over-year growth in Q1. Unlike Google, CPCs increased 12% year-over-year, though click growth only grew at 4%.

The Size Of The Shopping Shake-Up

The big story of the quarter — Google’s move to monetize Shopping by transitioning merchants to paid listings ads (PLAs) — won’t truly reveal its impact until later in the year. RKG’s figures give some measure of the impact of this change. The company said 15% of its clients non-branded paid clicks on Google were generated by PLAs in the second quarter, and they generated a 13% higher than average return-on-ad-spend (ROAS). For certain advertisers, that runs much higher.

RKG says current Google Shopping traffic volume comes in at one third to one half of what PLAs get on average. Based on volume and typical costs-per-click, RKG estimates Google will generate hundreds of millions, if not a billion, dollars in new annual revenue because of going pay-for-play.

The company’s clients saw a lot of success with the soon-to-be-eliminated Google Product Search in the second quarter. The average client saw a 14% growth in orders from Q1 to Q2. Product Listing Ads, too, have been successful. Google’s increased display of PLAs, along with improved conversion and click-through rates, increased order volume up 46% from Q1 to Q2.

In the comparison shopping engine world, Google Product Search has been the 100-lb gorilla, representing half of all clicks generated by any engines. Next came Shopzilla-Bizrate. NexTag saw the biggest click declines, sliding from a 14% share in the fourth quarter of 2011 to only 8% in the second of 2012.

Pinterest’s Referrals Growing

When it comes to social sites, Pinterest’s influence has grown in Q2, though it still represents just a little over 1% of referrals on average. That number differed substantially from client to client, however, likely correlating to the uniqueness and visual appeal of images on the etailer’s site. Facebook, the leader in social referrals, grew its share of referral traffic to just under 6%.