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Q4 Reports: Search Advertising Growing In Efficiency
Four reports released this month by paid search giants Efficient Frontier, IgnitionOne, Marin Software and Covario all pointed to an overwhelmingly successful fourth quarter in 2011 for major search advertisers in a number of verticals.
Across the board, overall search spend increased, as advertisers on the whole enjoyed an increase in impressions and click-through rates, while achieving a lower average cost per click.
According to Efficient Frontier’s report:
Search spend increased significantly in Q4 of 2011, bolstered by aggressive spending by retailers. Overall, search spend grew 14% Year over Year (YoY) in the United States, while retail specifically grew by 18% YoY and 40% Quarter over Quarter (QoQ), indicating that search is still the primary driver of digital marketing spend.
Meanwhile, all of the reports cited reductions in overall cost per click ranging from 3% – 9%. From Covario’s report:
For paid search advertisers, Q4 ’11was the first quarter since mid-2010where the trend toward higherCPCswas broken. Impressions experienced only a moderate increase in volume, compared to the more dramatic increase we observed for clicks and CTRs.
IgnitionOne’s report said the trend has lead to to increased revenues:
Across all engines, Q4 CPCs are down -8.6% YoY and -2.3% compared to last quarter. This trend benefits both marketers and Google as clicks cost less while monetizing at the same rate and expanding impression base and
higher clickthrough rates indicates top-line revenue growth for Google. The trend is driven by Google, as Yahoo!/Bing saw a YoY 6.4% increase in CPCs.
Benchmark CPCs & CTRs by Industry
One of the most useful statistics for small to medium businesses, all the way up to large enterprise search advertisers is bench-marking average CPC’s and CTR’s within their industry.
According to Marin’s report, this is how it shook out across seven major verticals:
Google Not The Best ROI, Despite More Investment
In a trend not unfamiliar to major retailers and large-scale search advertisers, the Bing/Yahoo alliance continued to produce higher return on investment. Efficient Frontier summed up the Q4 performance between the major search platforms:
Yahoo/Bing ROI is 9% more than Google maintaining it’s high traffic quality offering. Although it delivers better ROI than Google, advertisers still spent more on Google in Q4 indicating the ongoing importance of click and inventory volume.
If Bing/Yahoo can continue to gain search search share, however slow that may be, advertisers may be in even better shape by the time 2012 comes around.
As far as predictions go, these reports also showed significant increases in mobile and tablet advertising, as Greg Sterling reported earlier this week.
- Covario: Consumer Electronics Marketers Take Q4 Paid Search Boom Overseas
- Report: IAC Is Google’s Biggest Ad Spender, According to Kantar
- Report: Google Controls 44 Percent Of Global Online Advertising
- Mobile Will Be 22 Percent Of Search Revs Next Year — Report
- Report: Paid Search Rebounded In Q3 2011