CPCs down
Last week, we released our UK Q2 2009 Search Engine Performance Report which is available for download here. Our UK data indicated that advertisers are seeking efficiency as cost per clicks (CPCs) fell dramatically year on year (YoY) – allowing advertisers to capture more volume at lower cost. CPCs across the engines decreased by 20-31% YoY; with the biggest fall being from Google with 31%, followed by Bing and Yahoo! with 30% and 20% respectively. Efficient Frontier advertisers capitalised on this price reduction and achieved more click volume while maintaining the return on investment levels of prior quarters. Return on investment (ROI) for advertisers remained stable with a 2% improvement YoY. Advertisers were still able to grow campaigns at a profitable return as dynamic search marketplaces adjusted to lower cost tolerances and less competition.
Spend down
In addition, Search Engine Marketing spend for the sample fell by 11% when compared to the same period last year. The biggest drop came in the month of April, indicating advertisers revised Search Engine Marketing budgets for the quarter adjusting to more conservative forecasts for the new financial year. The data does provide a glimmer of hope for recovery in that advertisers, after the initial drop in April, increased month on month spending in May and June. Econsultancy gave an interesting analysis here.
Engine Efficiencies
Search engine efficiencies varied significantly over the course of the year. While Google operated 7% more efficiently for advertisers YoY and Bing operated 16% more efficiently, Yahoo! Search was 5% less efficient than Q2 2008 at producing ROI for advertisers. Yahoo!’s lower efficiency, given stable click volume and lower CPCs, indicates a likely decline in quality. If left unchecked, it will drive spend allocation away from Yahoo! Search to the other engines in coming quarters.
by Merinda Peppard, European Marketing Manager
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