In its second-largest acquisition, Amazon buys the company for $970 million.
But Google still commands the vast majority of spending for search engine marketing.
Google Inc. commands most search engine ad spending and consumer clicks, but Microsoft’s Bing search engine delivers a better return on investment, according to Efficient Frontier, a digital marketing technology and services provider.
Google received 79.1% of marketers’ search engine dollars during the first quarter of 2010, with Bing accounting for 20.9%, according to the Efficient Frontier’s Q1 2011 Global Digital Marketing Performance Report. Bing’s market share jumped last year when it began providing search results for Yahoo sites, in place of Yahoo’s own search engine.
The two major remaining search engines’ proportion of consumer clicks was nearly identical to marketers’ investments. Google’s average cost-per-click was up 11% year over year, while Bing’s increased 4%. Bing’s lower costs are driving higher ROI for the search engine, Efficient Frontier says. The company bases its analysis on an index of the firm’s search engine marketing clients operating in the retail, travel, finance and automotive sectors, among others.
The return on investment for ads placed with Bing increased 10% year over year during the first quarter, while the ROI for ads placed with Google decreased 12%. The calculation includes returns for pay-per-click ads and display ads. “The higher return on Bing-Yahoo should cause rational advertisers to shift their advertising dollars from Google to Bing,” the company writes in its analysis.
Retailers appear to be doing just that. The combined Bing and Yahoo gained market share among retailers during the fourth quarter of 2010 and the first quarter of 2011 after hitting bottom during the third quarter, according to Efficient Frontier’s sector analysis of the data. The third quarter of 2010 was when Bing and Yahoo combined forces on search. Bing’s market share among retailers hit 13.5% in the third quarter of 2010, 13.7% in the fourth quarter of 2010 and 15.2% during the first quarter of 2011, with Google accounting for the rest, according to the report.
A further retail sector analysis finds that retailers spent 22% more year over year on search engine ads during the first quarter of 2011. Cost-per-click spending increased 7% year over year, but was down 18% from the fourth quarter. Retail impressions grew 30% year over year, which Efficient Frontier says signals higher consumer interest in retail products.
The company predicts that spending on search marketing will increase 15% in 2011, after growing 17% in 2010.