We just released our Q2 2010 US Search Engine Performance Report in which we analyze another quarter of double digit growth for the Search Engine Marketing industry. According to our data, year on year (YoY) spend growth was 24% and 9.7% quarter on quarter (QoQ). This growth is partly due to a recovery in Cost Per Click (CPC) prices which rose across all of the major search engines. Overall, return on investment (ROI) in search was up 4% YoY and was 10.6% higher than last quarter.
Among the four sectors (retail, travel, auto, and finance), the retail sector leads the recovery with 38% growth in spend YoY and 16% growth QoQ, a pace that far exceeds the typical modest quarterly rise in Q2. Retail CPCs continue to grow at 18% YoY and 17% QoQ, indicating a growing aggressiveness on the part of advertisers in this sector. Consumers are also playing their part in driving the recovery with impression volume up 65% YoY, signaling continued consumer interest in online shopping.
Our search engine specific analysis shows that Bing continues to grow its market share at Yahoo!’s expense. The YoY spend share gain for Bing is 56% and YoY click share gain is 36%. Meanwhile, Yahoo! continues to lose market share: Yahoo!’s Q2 2010 numbers represent a 12% YoY spend share loss and a 9% YoY click share loss. Google’s market share has grown slightly in Q2, with both spend share and click share up to 75.6%.
Our outlook for Q3 2010 is cautiously optimistic. The last two quarters have shown strong growth in terms of SEM spend (20% YoY in Q1 and 24% YoY in Q2) and we expect the positive trends to continue for the second half of the year. CPCs continue to make a strong recovery, indicating growing demand and larger advertising budgets, which should continue to contribute to the expected growth in the coming quarters. However, weakness in the European economy might negatively affect Q3, so we remain cautious as we keep our SEM growth expectations in the 15-20% range.
For more details about Q2 2010 and our
outlook, download the entire report here: http://www.efrontier.com/research/search-engine-report/Q2-2010
Margarita Golod
Senior Product Marketing Manager
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