Efficient Frontier Insights

UK Search Engine Report: Q4 2009

 

In addition to releasing the Q4 U.S. Search Engine Performance Report yesterday, we also released it's sister publication for the UK. The UK Report covers trends for the sector based on data from our UK Customer Index. Highlights from the quarter include:

• Sequential Quarter on Quarter (QoQ) growth is up 27% and Year on Year (YoY) growth is up 16%. 
• Click through rates on all engines increased year on year (YoY).
• Google’s share of clicks rose two percentage points to 86.9% and while Google’s share of spend rose one percentage point QoQ to 87.6%, Yahoo! gave up one percentage point in spend.
• Bing held relatively stable at 3.3% share of clicks in Q4 vs. 3.7% in Q3. Bing also remained steady at 4.3% share of spend.
• UK also expects 15-20% range in SEM spend growth for the full year of 2010 (based on current economic conditions).

Download the full report here for more analysis.

UK Search Engine Performance Report Released

This week our UK Search Engine Performance Report: Q1 2008 was released. Google is by far the dominant search engine in the UK, with 85% of search engine spending in Q1 2008. Its ROI by increased by 14% since Q4 2007, despite a small drop in CTR from Q4 07 to Q1 08.
 
Q1 2008 showed a difficult quarter for Yahoo in the UK, with a CTR decline of 38% and a subsequent decline in ROI of 6% versus Q4 2007. Much of this decline might be attributable to Yahoo's expansion of its partner syndication network into high volume, lower quality sources of search traffic, as seen in the US and explained here. MSN increased its share of search slightly from Q4 07 to Q1 08, to account for 3.5% of UK search spending in Q1. MSN also maintained its lead as the engine with the highest ROI in the UK.

With the exception of Japan, Google captures the vast majority of search engine advertising spending in the major global markets in which Efficient Frontier operates.  Europe is the most Google-centric, with Google accounting for nearly 96% share of search advertising spending in Q1 2008. In the United States, Google accounted for 77% of search spending, while 93.5% of spending went to Google in Australia. Despite Yahoo’s dominance in Japan, Google gained 6.2 percentage points of search spending in Japan from Q4 2007 to Q1 2008. It's no surprise that in Q1 international markets accounted for 51% of Google's revenues.

Global SEM Breakdown: Mostly Google

Today Google is expected to report "stellar earnings," according to a Forbes article published this week. In Q3 2007, Google reported that 48% of its revenue came from outside the US, which leads the author to conclude "even a recession should not impede Google's growth." This week we reported that Google accounted for 77% of search spend in Q4 07, and captured 97% of the additional search marketing spend added by a fixed group of US clients this year. Analysis of data from our international client base shows that with the exception of Japan, where Yahoo dominates search, other markets lean even more heavily toward Google than the US.

Google search and content covers more than 85% of the marketplace in Australia, UK, and Europe. MSN adCenter is not operating in Australia, and has a presence in only some European countries.

Efficient Frontier CEO Ellen Siminoff recently wrote about the global opportunity for SEM in MediaPost's Search Insider. Google may not be able to take the majority of search share in China and Japan, but it seems as if world domination might be in its future, making "don't be evil" an increasingly important motto.

Just How Dominant is Google in European Paid Search?

If you ask any European search marketer about the differences between the European market and the US, the first thing they will most likely say is "in Europe, it's all about Google." Indeed, Hitwise UK data shows that Google accounted for 85% of UK search query volume as of October 2007.

The breakdown of search engine spend for Efficient Frontier Europe also shows this dominance - in October 2007, nearly 88% of our UK client spend occured on Google Adwords or AdSense. The other European countries in which our clients are advertising (France, Spain, Italy and Germany) show an even greater trend toward Google, which claims 94% of client search spend in those countries.

Although Google dominates in Europe, just as in the US, it's important not to discount the other engines in your international campaigns. That additional 15% of search queries not performed on Google can add to your bottom line, and provide good learning opportunities. MSN offers demographic targeting and high quality traffic in the UK, and Yahoo! Search is improving the quality of their traffic with site exclusion and CPC discounts. However, given the growth of Google's paid search share in the US, as I showed in this post, it makes me wonder how long it will be before Google reaches 90% share in the UK.

On Monday at SES Chicago, Efficient Frontier President James Beriker shared this data along with best practices for EU campaigns in the "Search Around the World: Europe and Latin America" panel . Marty Weintraub covered the session here.