Google continues to dominate the market for search advertising spending, with a 76% share in Q3 2008, while Yahoo gained 1.8 points to bring it to 19.2% and Microsoft Live Search held steady at a 4.8% share, according to search engine spending data from Efficient Frontier.
The “US Search Engine Performance Report: Q3 2008” indicates that while overall growth has been slowing throughout 2008 and Google’s search advertising growth decreased by 1.9 percentage points from Q2 to Q3 2008, overall return on investment remains strong.
Of Google’s 76% share, 4.6% was from Google content, an increase of 82.8% for non-financial services advertisers. Google content was the only search-engine channel for which all advertisers increased spending in Q3 2008.
Additional findings:
- Spending in financial services is down in the face of increasingly dynamic economic conditions. However, ROI improved year-over-year on all three engines for advertisers outside of financial services.
- Spending on Google by non-financial-services advertisers grew by 3.6% on a year-over-year basis, faster than the overall growth rate of 2.5%. Google gained $1.14 of every new search dollar in Q3 2008 versus Q3 2007, while Yahoo and Microsoft each lost $0.07 for every new dollar spent on search.
- Yahoo accounted for 19.2% of US search-engine spending in Q3 2008, losing 1.3 percentage points in share from Q3 2007 but gaining 1.8 percentage points from Q2 2008. Total spending on Yahoo increased by 7.2% from Q2 to Q3 2008 for advertisers outside of the financial services sector, and by 2.5% for those in financial services.
- Microsoft Live Search accounted for 4.8% of US search spending in Q3 2008, down 0.8 percentage points from the previous year. Overall spending on Microsoft Live Search declined for all advertisers on both a year-over-year and quarter-over-quarter basis.
- On a global basis, Google dominated the search marketplace in Q3 2008, capturing more than 85% of search spending share in the UK, Europe, and Australia. In Japan, Google accounted for 55% of search spending.
“Our data shows that search engine marketing continues to be a highly productive direct marketing channel for advertisers, even in challenging markets,” said James Beriker, president and CEO of Efficient Frontier. “With increased competition and a decrease in the total number of conversions, advertisers will either slash budgets or use advanced technologies to maximize volume and ROI.”
About the research: Analysis for the report was based on data from a fixed sample of Efficient Frontier US clients from Q3 2007 throughQ3 2008. The report covers nearly 60 billion impressions and more than 428 million clicks on search and content ads on Google, Yahoo and Microsoft Live Search. The report includes data from advertisers in the financial services, travel, retail, automotive and business-to-business verticals.
