When analyzing spend data for our upcoming quarterly report, we made a startling discovery - the spending patterns of Efficient Frontier clients in the financial vertical were very strongly tied to the S&P 500 index. The correlation between the two datasets is a startling 89% ! This revelation begs two questions: (1) Why the correlation and (2) What does it mean.
Stock markets and the PPC market are very similar in many ways. Keywords are like stocks, both markets are reasonably transparent where the data on every keyword/stock is available and most importantly both markets are highly fluid. A positive or negative piece of information can be acted up on immediately; you can buy a stock/ bid up a keyword or sell a stock/bid down a keyword. It is no surprise then that the portfolio theory that has proven itself in the stock market works so well in the SEM space. It should also come as no surprise, that both markets are intrinsically tied to the state of the economy. In the case of SEM, advertisers take immediate action on the information they have on their businesses. It is the power of now!
Just as stock markets are leading indicators of trends in economy, trends in SEM indicate what is to come in the business world. We reported a flight to efficiency in Q4 2008 and the same emphasis on efficiency is currently being felt in various sectors of the economy. Consumer search patterns also reflect the states of mind of consumers as a whole. Our report on customers embracing frugality, should come as no surprise in this recession.
The upcoming report will thus provide insights into how businesses have adapted to the downturn. It will also indicate shifts in consumer buying patterns and adaptations in lifestyles. Finally, it will give advertisers clues on how they could make their SEM campaigns more efficient.
Sid,
Couldn't agree with you more!!
Bob.
Posted by: Bob | July 10, 2009 at 03:01 PM
I look forward to your upcoming report
Posted by: Chloe Mia | January 15, 2010 at 09:17 PM