Efficient Frontier Insights

Q2 Search Engine Performance Report: Google gets $1.10 of Every New Search Dollar

Today our US Search Engine Performance Report: Q2 2008 was released. Analysis of data from our client index showed that Google took more than its fair share of the overall increase in search spending: for every new dollar spent on search in Q2 2008 versus Q2 2007, $1.10 went to Google. Yahoo lost $0.09, and Microsoft lost $0.01. In other words, advertisers are putting all of their new search dollars into Google, and pulling money out of Yahoo Search and Microsoft Live Search.

On a quarter to quarter basis, however, the allocation of search marketing dollars did not fundamentally change, which is an interesting point in light of the heated negotiations among Yahoo, Microsoft and Google over the past several months. Google maintained its 77.4% share of US search marketing dollars, while Yahoo captured 17.8% of spending and Microsoft Live Search maintained its 4.8% share. Microsoft Live Search and Yahoo Search still have good ROI in comparison to Google, which makes them essential marketplaces for advertisers that need to meet their increasingly scrutinized revenue targets.

Average CPCs for non-financial services advertisers on Google were up 14% from Q2 2007 to Q2 2008, while CPCs on Microsoft Live increased by 5.6% and Yahoo CPCs dropped 7%. We track financial services CPCs separately, since they are so much greater, as you can see here, and have behaved differently over the past year given the turmoil in the mortgage sector and other financial markets. Financial services CPCs increased 19% on Google over the past year, but declined significantly on the other engines. Bloomberg has a more detailed analysis of CPC trends here.

Our report also shows that Google  dominates the western character set of search advertising: Efficient Frontier places ads in the US, UK, France, Germany, Italy, Spain, Brazil, Mexico, Argentina, India, and Australia, and accounts for 75% or more of search dollars in those countries. We began placing ads in China this year, which is dominated by Baidu. Historically within Efficient Frontier's client base Yahoo has been the leader in Japan, but in Q2 Google picked up 7 percentage points of share, and accounted for a majority 56% share of search adverting spend in Japan.

June CPC data on Search Engine Watch

Today Search Engine Watch published June's average search CPC data by vertical. This week, we will publish our US Search Engine Performance Report, Q2 2008, which will show the difference in average CPCs across Google, Yahoo, and Microsoft Live Search, as well as trends in share of spend, CTR, and ROI.

Google Content Network Success Story - MySpace Converts!

Lifescript, an Efficient Frontier client, recently published a case study on its success with the Google Content network. It shows how Aloke Fernandes, our account manager, worked with Lifescript and used Efficient Frontier's and Google's reporting tools to identify high converting sites within Google's content network. To Aloke's surprise, one of those high-converting sites happened to be MySpace. The case study goes on to discuss how Lifescript went on the leverage the effectiveness of social media advertising.

Brian Hogan, SVP of Marketing and Business Development at Lifescript, is quoted in the case study (PDF available here )

"By scaling and managing large sets of keywords, Efficient Frontier has not only allowed us to reach relevant users on search, content, and social networking sites, but has also helped us grow our search revenues three-fold over one year."

These posts on content advertising show the differences in CPCs and CTR on content versus search and demonstrate how content adverting can be a valuable source of revenue, especially for certain business types. This post by Vividh Chaudhary discusses some best practices for setting up content campaigns.