In separate reports drawing on data from their clients, search marketing firms SearchIgnite and Efficient Frontier find that while Q3 paid search spending increased over Q2, it has yet to surpass levels for the previous year. SearchIgnite found that year-over-year spending is flat while spending increased 10% in Q3 over Q2. Efficient Frontier reports that overall search engine spending fell 5% from last year, but rose 5% in Q3 from Q2. Spending on paid search ads by retailers, however, increased 2% from last year, according to Efficient Frontier.
Additionally, Efficient Frontier reports that impressions for paid search ads placed by retailers increased 90% from Q3 2008. The significant increase in impressions is a result of consumers looking more aggressively for good deals online, the report says. The slight increase in spending of just 2% is a result of lower conversion rates, Efficient Frontier says.
Among the search engines, Efficient Frontier says Google’s share of search ad spending dropped from 75.5% in Q2 to 73.7% in Q3 while Microsoft’s Bing gained ground from 4.3% in Q2 to 5.3% in Q3 and Yahoo’s rose from 20.2% to 21.0%.
The Efficient Frontier report also showed that retailers’ cost per click was flat in Q3 compared to the previous quarter but was 15% below the year-ago level.
Efficient Frontier says it expects to see strong consumer activity in the fourth quarter. “The net result of better conversions, improving ROI, and higher CPCs will be seasonally strong spend increases for the retail sector in Q4 2009,” the company says.
In its findings, SearchIgnite says paid search spending increased 10% for the second consecutive quarter in Q3. The highest growth in spending came from multichannel retailers who increased paid search spend by 40% compared with the same quarter a year ago, despite flat conversion rates and average order value, according to SearchIgnite.
"This is the second consecutive quarter of sequential growth for paid search spend, indicating marketers’ continued confidence in search marketing,” says SearchIgnite president Roger Barnette.
Among the search engines, SearchIgnite found little change in spending share between Q2 and Q3, but year over year found that Microsoft's Bing share grew 15% while Yahoo’s declined 24%.
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