October 12, 2010, 12:10 PM

Google continues to gain market share

The search giant’s third quarter paid search spend grew more than 8%.

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Google Inc. continues to capture a greater share of retail pay-per-click advertising with 80.2% of all spend in the third quarter, new research by SearchIgnite, a paid search optimization company, shows.

That’s the largest market share recorded since SearchIgnite began tracking search engine market share in the first quarter of 2007.

Overall paid search spending grew 5.8% year over year, compared with flat growth a year ago. Moreover, the percentage growth increase grew  each month in the quarter—in July growth was 4.9%, August 5.8% and September 6.7%. That growth bodes well for a strong fourth quarter, the report says.

Retailers spent 21.0% more on search ads on Bing in the third quarter than during the same period in 2008, with Bing now accounting for 6.4% of all U.S. retailer search spend in the quarter, compared with only 6.2% in Q3 2009, new research shows. Yahoo posted a 10.0% decline in search ad spend.

The early results from the Bing-Yahoo alliance suggest that average cost-per-click costs will slightly increase as will click-through rates on the combined platform, the report says.

“Despite widespread speculation that CPCs for the new search alliance will hyper-inflate, PPC ads delivered by Bing show little CPC inflation thus far and SearchIgnite does not anticipate that they will be markedly inflated in the future,” the report says. “In addition, click-through rates have increased for advertising served on the combined Bing-Yahoo search inventory, revealing that Bing’s ad-serving algorithm delivers more relevant advertising than Yahoo, which is positive news for advertisers.”

The study tracked more than 55 million clicks on Google, Yahoo and Bing from Jan. 1, 2006, through Sept. 30 across retail marketers.

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