Today we released the Efficient Frontier Q3 2008 U.S. Search Engine Performance Report. which analyzes the performance of Google, Yahoo, and Microsoft Live Search on search engine spending, CTR, CPC and ROI from advertisers in the Efficient Frontier Client Index. Because conditions in the finance sector have been so volatile over the past year, trends were reported separately for financial services advertisers and non-financial services advertisers.
Google continued to gain share for all advertisers over last year, capturing 76% the share of total search engine spending in Q3, up 2.1 percentage points from Q3 2007. That gain in share was largely due to growth in Google content spending, which increased from 2.6% to 4.6% of spending from Q3 2007 to Q3 2008. Content spending increased by 82.8% YOY in Q3 2008 for non-financial services advertisers, and by 16.6% in financial services.
A look at trends in CPCs across search and content gives an indication of why advertisers are investing more in Google content and continue to spend on Yahoo and Microsoft Live Search. On a YOY basis CPCs on Google search increased by 8.3% and 4.7% respectively for financial and non-financial services advertisers. CPCs declined YOY for Microsoft Live Search and Yahoo Search, with the exception of CPCs on Microsoft Live Search for non-financial services advertisers, which were up 6%. Google content CPCs increased by 20% for non-financial services advertisers, but at $0.28 a click, Google content is still 53% cheaper than Google search, which averaged $0.61 per click in Q3.
The report also found that, in an increasingly unstable economic environment, ROI improved on all three major search engines in Q3 2008 on a YOY basis. Google search ROI for non-financial services advertisers increased by 11.3%, Yahoo search by 19.7% and Microsoft Live Search by 29.9% YOY.
For more findings from the report, read our press release, or download the full report here.
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