Global paid search spend rose 17% year-over-year and 5% quarter-over-quarter in Q2, details Covario [download page] in a July 2012 report covering its clients, who are primarily high-tech and consumer electronics firms. The report notes that the 10% quarter-over-quarter decline in click-through rate (CTR) and concurrent 6% increase in costs per click (CPC) suggests that keyword pricing (which grew 6%), rather than volume, was the primary growth driver for the quarter. On a year-over-year basis, impressions (+7%), clicks (+18%), and cost (+17%) all grew in Q2, with CTR (+11%) also growing and CPCs flat. The quarter-over-quarter data displayed a different pattern, however, with impressions rising 10%, while clicks fell by 1% and cost rose by 5%.
Spending Growth on Target
The 17% year-over-year growth in Q2 is in line with Covario’s expectations for 18-22% annualized growth for the year. By comparison, a June 2012 forecast from ZenithOptimedia called for 15.3% growth in global paid search spending this year, and 15% annualized growth through 2014.
According to the Covario report, the Asia-Pacific (APAC) region saw the most rapid growth in Q2, jumping 41% year-over-year and 23% quarter-over-quarter. The Americas, driven by the US and Canada, saw a 15% increase in spend year-over-year and a 1% increase quarter-over-quarter. The Europe, Middle East, and Africa (EMEA) region also saw marginal quarter-over-quarter growth of 1%, and did not far much better on a year-over-year basis (+2%).
Google Continues to be the Kingpin
Google remained the dominant search engine in Q2, accounting for 86% of search budgets, and holding 91% share of impressions and 68% share of clicks. Advertisers continued to up their spending on Google, allocating 16% more dollars than a year earlier, and 5% more when compared to Q1. Yahoo!/Bing saw slightly more muted quarter-over-quarter growth (3%), but more impressive 30% growth year-over-year, accounting for 7% of budgets in Q2.
- Yahoo!/Bing held 3% market share in impressions and 5% in clicks in Q2.
- Baidu, which holds majority share of the Chinese market, experienced spending growth of 41% year-over-year and 25% quarter-over-quarter.
- In the Americas, impressions grew 27% quarter-over-quarter in Q2, while clicks declined by 7%.
- CTR in APAC rose 55% year-over-year and 31% quarter-over-quarter.
- All regional planning assumptions from Covario remain unchanged from October 2011, save for the EMEA region, which has been revised to 9-12% annualized growth for this year.
About the Data: Covario’s quarterly Global Paid Search Spend Analysis is based on the spending patterns of its customers, which consist of high-tech and consumer electronics firms that are global advertisers and leverage paid search advertising in more than 45 countries globally and on many different search engine platforms.