April 21, 2009, 12:00 AM

In the first quarter, paid search clicks and cost per click were down

During the first quarter of 2009, the average volume of paid search clicks was down 9% compared with Q1 2008, according to new research from NetElixir. At the same time, the average cost per click was down 7% year over year.

During the first quarter of 2009, the average volume of paid search clicks was down 9% compared with Q1 2008, according to new research from NetElixir Inc., an online advertising management firm. At the same time, the average cost per click was down 7% year over year, the research shows.

The average click-through rate was up 7.5% in first quarter of 2009 versus Q1 2008, and the average search ad conversion rate was up 5%, NetElixir reports.

“We think Q2 this year will be slower than Q1 for search advertising,” says Udayan Bose, founder and CEO of NetElixir. “The continuing pessimism about the economy is the main culprit. Also, historically, Q2 tends to be slower than Q1-the number of paid search clicks in Q2 2008 was 12% lower than in Q1 2008.”

The firm studied online retailer clients in five categories: pet supplies, consumer electronics, flowers and gifts, housewares, and food and drug. It analyzed the performance of each category on a weekly basis in Q1 2009 and compared the data with that for the same period last year.

The company offers advice on how to maximize paid search performance during this quarter and beyond. First, anticipate: analyze keyword search data for the second quarters of 2008, 2007 and 2006. “The spikes we observed in Q1 2009 followed similar trends as in past years; they were just more pronounced,” Bose says.

Second, test: Tactical sales promotions are playing an increasing role in today’s economy, the company says. As a result, retailers should have multiple sets of ad copy and relevant landing pages ready to go that sync with promotions. And third, monitor competitors. “Gone are the days when you could silently ‘snicker’ at your competitors who would pay anything to get their ads listed in the top position,” Bose says. “These days, anyone and everyone who does search advertising needs to justify each dollar they spend.”

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