The Clickable Search Engine Marketing Blog

One of the great things about Clickable is the intelligence provided by our platform, where marketers and agencies of all sizes manage their search advertising investments. We regularly analyze aggregate spending behavior -- including many small, midsize and sub-enterprise businesses -- to gain market insight and influence the products we build. I recently sat down with my colleague, Ben Seslija, Clickable's senior director of analytics, to surface search trends for Q1 2010. Following are our key findings. Let us know what you think.  

Search Budgets Rise In Q1 2010 Versus Q1 2009 

Advertisers' search budgets are significantly higher in Q1 2010 versus year-ago. The economy and market seem to be recovering at a healthy pace. We have seen 75% of our advertisers increase their budgets versus year-ago, while 25% of maintained flat or slightly decreased budgets. Among the advertisers that increased their spend, 30% increased their budgets by over 30%; 40% increased their budgets by anywhere between 10% and 30%; 30% increased their budgets by less than 10%. Based on Q1, we forecast that 2010 full-year search budgets will increase anywhere between 10% and 30% versus 2009.

Interesting side note: Search budgets are diversifying in terms of network distribution. Microsoft/Bing seems to be gaining ground on Yahoo and Google. Last year, only 5% of customers were using Microsoft/Bing, while currently this percentage is at 9%.

Search Budgets March 2010 Versus Prior Two Months

March 2010 search spend is significantly higher versus January and February. We are seeing increases between 5% and 15%. This is normal as advertisers seek to spend any remaining Q1 budgets. It's also important to note that advertisers often are most conservative with their spending in January and Ferbruary. There are some exceptions, like telecom, which typically is very aggressive in January (New Electronics purchases).

CPCs and Paid Click Growth

We are seeing continuous increases in Cost Per Click (CPCs) across all search engine networks. This is not a new trend, and increases are most evident on Google. Some of these increases can be attributed to natural market factors, such as competition, reallocation of budgets from other media to search, and new competitors entering the market, among other. However, some variance is attributed to search-engine efforts to capitalize on PPC offers. For example, Google experiments with techniques that result in higher CPC costs. Consider visibility into first-page-minimum-bid thresholds, which pushes advertisers to bid higher and drive overall CPC up. 

Quality scores also play a role in CPC increases in many cases. Consider ad position, a function of CPC and Quality score. We'll often see two advertisers bidding on the same keywords have to pay different CPCs to achieve the same position. This encourages advertisers to work on their Quality Scores (an expensive investment) or supplement their lack of good Quality Scores by paying higher CPCs. This is ultimately drives CPCs up. This creates an inherent advantage for more experienced advertisers. This also creates deeper network engagement and behavioral lock-in.

Activity Around Yahoo-Microsoft Deal

We haven’t seen a significant transfer of investment from Google to Microsoft/Bing. However, we have seen a lot of advertisers sacrificing their Yahoo ad dollars and moving them to Bing. It is possible that we will see more advertiser sacrificing Google ad dollars and re-allocating them to Bing as Bing user base becomes stronger. Importantly, the Yahoo search end-user base has not decreased significantly; this steady volume of traffic with lowering CPCs in many verticals creates opportunity for savvy advertisers.

Retail Vertical Strong, Driven By Consumer Electronics

Retail continues to be strong. It is evident that consumer power is getting stronger and stronger. Retail also remains the vertical with some of the biggest and most convincing incentives. We are seing an increase of 25% to 35% in retail ad dollars versus the same period last year. Consumer electronics is a major driver.  

Display And Social Trends

There is limited interest in display at this time among smaller and midsize advertisers, however there is significant and growing interest in social advertising, particularly Facebook. However, inefficiencies and behavioral friction have prevented serious volumes of experimental dollars to shift.  Clickable social-advertising adoption to grow dramatically in 2010 as the major social networks mature their APIs and open them up to third-party management tools, as well as improve their own self-serve dashboards.

This post was mentioned on Twitter by clickable: Surge In Search Advertising Among SMBs Signals Economic Recovery: http://bit.ly/bUcrYP ^mk

Pingback from  Twitter Trackbacks for                 Surge In Search Advertising Among SMBs Signals Economic Recovery - The Official Clickable Blog | Clickable.com         [clickable.com]        on Topsy.com