Retailers increase their paid search spending in the second quarter

Retailers in the second quarter of 2011 spent 7% more on paid search advertising than in the second quarter of 2010, according to a new report from Marin Software.

The online advertising services and technology firm based the findings on an analysis of some 800 clients that collectively spend about $2 billion annually on paid search through Marin. The agency says that at least 20% of its clients are retailers.

Overall, Marin’s North American clients have increased their paid search spending by 20% in the second quarter compared with the same period a year ago. Click-through rates for paid search ads increased 12%.

For retailers in the second quarter, the click-through rate for paid search stood at 1.23%, up from 1.04% for the same period in 2010, and up from 0.83% from the first quarter of 2011. The cost per click for retailers was 46 cents in the second quarter, down from 49 cents in the second quarter of 2010 and unchanged from the first quarter of 2011.

Paid search impressions for retailers dropped 3% in the second quarter compared with the same period last year. But the total volume of clicks on retailers’ paid search ads increased 14% in the second quarter compared with the same period a year ago, suggesting, in part, that retailers are becoming more efficient with paid search, Marin says. “Less ads were served up but more ads were clicked on,” says Matt Lawson, Marin’s vice president of marketing.