January 10, 2012, 11:28 AM

Retailers’ paid search spending increases 26% in Q4

Mobile ads accounted for nearly a quarter of paid search spending on Black Friday.

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Retailer spending on search increased 22% year over year during the fourth quarter, according to a new report from digital marketing firm IgnitionOne. Most of that spending (81.8%) went to Google Inc. and approximately 18.1% was spent with the Microsoft Corp.-powered Bing search engine, which also provides search results on sites operated by Yahoo Inc.

The report says the retail sector spent 26% more on paid search during the fourth quarter than during the same period a year ago. Ad impressions and clicks for retailers’ ads each increased 42%, while transactions stemming from clicks on paid search ads increased 67% and the corresponding revenue from those transactions grew 43%, IgnitionOne says.

Retailers also increased spending for paid search ads served on mobile devices. Mobile paid search accounted for 14.2% of total paid search spending in the fourth quarter, up from 5.2% a year ago. Mobile paid search spending peaked the day after Thanksgiving, the traditional kickoff for holiday gift shopping commonly referred to as Black Friday. Mobile accounted for 24% of retailers’ total paid search budgets that day.

“Adoption of smartphones and tablets is exploding and mobile search is becoming a major part of the shopping experience for many consumers,” says Roger Barnette, president of IgnitionOne. “Advertisers are responding to this trend, which is clearly shown in the enormous growth of mobile search advertising spending.”

IgnitionOne based its findings on ad spending by more than 500 of its clients, including such retailers as Ann Inc., No. 95 in Internet Retailer’s Top 500 Guide,  and Chico’s, No. 129. IgnitionOne did not release actual spending figures.

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