The search engine marketing (SEM) industry posted solid sequential and year-over-year growth in Q409 as marketers – especially in the retail category – capitalized on growing consumer demand and took a more aggressive position with their search campaign spend, according to the latest US Search Engine Performance Report from Efficient Frontier.
Google Most Popular
Aided by its strength in the retail industry, Google was by far the most popular search engine used by consumers in Q409, the report said.? Google reported a 74.4% share of clicks for the quarter, up 6.1% from its 70.1% share in Q309. Google gained most of this ground at the expense of Yahoo, which dropped 13.9% in its share of quarterly clicks, from 24.4% to 21%. Bing’s share remained virtually unchanged, going from 4.7% in Q309 to 4.6% in Q409, Efficient Frontier noted.
Google also performed well in terms of share of spend, although quarterly growth in this area was not as strong as it was in share of clicks. Google’s share of spend rose 0.8%, from 73.9% in Q309 to 74.5% in Q409. Similarly, Yahoo suffered a much less serious decline in quarterly share of spend, dropping 2.4% from 20.8% to 20.3%. Bing also remained relatively stable in its quarterly share of spend, going from 5.3% to 5.1%.
Retailers Spend on Search
Retailers, the traditional drivers of search spending, increased year-over-year spending by 17% and quarter-over-quarter spending by 46% in Q409. Search-ad impression volumes that result from retail queries spiked 90% year-over-year and built on four quarters of positive sequential growth.
Growth in retail search spending is more impressive considering that cost-per-click is down 9% year-over-year, reflecting a suppressed market and slightly diminishing spend increases, according to the report. Consumers’ average transaction size was down about 5% year-on-year but posted a normal seasonal lift of about 5% sequentially quarter-over-quarter, indicating more cautious spending due to the economy. While clicks originating from search engine marketing converted at the same rate, less revenue resulted from those clicks.
Other sectors did not show the same enthusiasm for search spending as retailers. Travel in particular spent far less on search, with spending declining 20% vs. Q408 because of weak cost-per-click. Finance and automotive both posted modest 2% search spending increases as a result of volume gains.
Growth Expected for Overall SEM Spend, Bing This Year
Efficient Frontier expects an overall 15-20% increase in search engine marketing spend growth this year, adding that market competition in SEM should continue to recover, adding cost-per-click growth on top of volume expansion. In addition, Efficient Frontier predicts that Bing will increase its share of clicks by about 30% during 2010, reaching a 6-7% share by the end of the year.
Bing Shows Growth in December 2009
Bing may have already started its expected growth in December 2009. According to the latest qSearch data from comScore, Bing experienced 6% growth in query volume last month, rising to nearly 1.4 billion searches. In contrast, Google’s query volume remained virtually unchanged at 9.7 billion searches, rising from 65.6% to 65.7% share.
About the survey: Efficient Frontier conducted its analysis based on data from its own SEM customers and the resulting Efficient Frontier Customer Index. This index represents a subset of the company’s clients with spend data for six consecutive quarters or more, whose resulting metrics are then normalized to average industry category contributions established by multiple third-party data providers. The Efficient Frontier Customer Index consists of an axed sample of large scale US search engine advertisers across multiple sectors, including finance, travel, retail and automotive.