Yesterday, we released our Q2 2009 Search Engine Performance Report which is available for download here. Generally, our data indicate that search marketing in the U.S. has stabilized, which is good news for the industry. While year-over-year spending remains down significantly, quarter-over-quarter and month-over-month spending is relatively stable while taking into account seasonal changes.
But a deeper examination of the data reveals varied impacts to advertisers and engines beneath the overall stabilization trend. Large advertisers, which are defined as spending more than $200K per month, are in line with the general market stabilization. However, medium sized advertisers, defined as those spending $50-200K per month, are increasing their spend to capitalize on better efficiency in keyword marketplaces and gain share. Smaller advertisers, on the other hand, those spending less than $50K per month, continue to reduce spend adding immediate savings to their bottom lines. In the finance category, advertiser spending bounced back as the stock market improved while travel advertisers, faced with consolidation and lower revenue per sale, maintained a trend of lower spending. And the efficiencies of the engines themselves, a measure of the returns advertisers generate for their search marketing investment, varied greatly with Google and MSN rising while Yahoo! fell.
We also found that search is operating at a 30% higher efficiency - that is, advertisers are using more aggressive ROI and CPA targets than they did a year ago. This is good news for marketers because it means they are getting a bigger bang for their buck. But there is a reason that search has become more efficient. Businesses demand higher returns today as compared to this quarter last year. As a result, while finding an opportunity to grow campaigns is likely easier today than in the recent past, finding an opportunity to grow share efficiently remains a challenge.
These variances in engine efficiency highlights the need for marketers to implement is cross-engine optimization. While each engine represents a certain click opportunity, marketers are best served by allowing their goals to dictate where the next click and the even more efficient click should come. Mandating engine spend allocations will result in a less efficient and lower scale campaign. And in today’s business environment, finding efficient scale is most often top priority regardless of the advertiser category.
by Justin Merickel
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