Report: Google Dominates Paid Search, Yahoo-Bing Offers Better ROI

Efficient Frontier released its Q3 Digital Marketing Performance Report this morning. The document covers a range of trends from search marketing to Facebook and display advertising to mobile and tablets. However the report is primarily focused on paid search trends.

Here are some of the bullets from the report:

• Search spend increased 20 percent year over year in the US and 16 percent in the UK
• Google regained market share “for the first time” since the Yahoo-Bing search alliance (see today’s comScore numbers)
• Facebook CPC increased by 54 percent vs. Q2 with further increases anticipated. In addition the Facebook ad spend grew 25 percent quarter over quarter. However marketers also saw improved fan engagement and ROI
• Exchange display ad spending grew 7 percent quarter over quarter

Google controls roughly 82 percent of both the clicks and the spend in paid search according to Efficient Frontier. The company also said that this is “the first quarter that Google has gained more spend share from Yahoo/Bing across sectors since the Yahoo/Bing alliance  . . . [as a partial] result of improved CTRs on Google.” In addition, it “can also be attributed to the shift in marketers looking for more volume as they head into the Q4 retail peak.”

Yahoo and Bing deliver higher quality traffic and better ROI according to Efficient Frontier: “Yahoo/Bing has pulled ahead indicating a stronger delivery of higher quality traffic.” The challenge for Bing-Yahoo is traffic and scale.

The report teases some mobile data but doesn’t offer any drill down:

• Tablets (read: iPad) captured 77 percent of all retail mobile ad spending in September 2011
• Mobile search spend is roughly 7 percent of total search ad spend with tablets representing 60 percent of all mobile impressions and clicks.
• Mobile is projected to reach up to 10 percent of paid search spend by end of Q4

Efficient Frontier added that marketers will get greater visibility into conversions where users are signed into Google:

The ability to attribute conversions across devices (mobile, tablet, desktop) is now possible with the development of the Google+ network that keeps users logged in to the Google ecosystem. Advertisers should prepare for this trend by investing time into looking at tablet traffic and conversions, while optimizing websites for mobile.