Google Claims Nearly 80% of U.S. Search Advertising Spend in Q2 2012

By Jason Hahn | DM Confidential | July 4, 2012

IgnitionOne recently released its “Online Advertising Report: Q2 2012.” Among the findings was that search spend in the second quarter of 2012 slowed down from the growth observed in the first quarter of the year. Also, Google claimed for nearly $8 out of every $10 spent on U.S. search advertising in the second quarter.

In the second quarter, paid search spending grew 15.5 percent year-over-year, slower than the 30.3 percent growth seen in the first quarter and the 22.4 percent growth in the fourth quarter of 2011.

According to IgnitionOne, clicks were up 13.2 percent year-over-year in the second quarter, also slower than the 29.1 percent increase seen in the previous quarter.

Total cost-per-click (CPC) was up 2.1 percent year-over-year, with Google’s CPC down 3.1 percent. “This continued decrease can be blamed on increasing reliance on mobile, which has cheaper CPCs as well as increasing use of new ad formats which are generally lower PPC clicks,” according to the report.

Bing/Yahoo, on the other hand, saw its CPC surge 24.3 percent, about the same as its increase in the previous quarter. IgnitionOne attributes this to the alliance’s promotion of best practices, “which led to greater competition in auctions through the increased use of broad match keywords as a stepping stone for exposure across other match types.”

In the second quarter, Google held 79.1 percent of U.S. search engine ad spend, while Bing/Yahoo claimed 20.9 percent. Google grew its share of search ad spend by 11.4 percent year-over-year, while Bing/Yahoo increased its spend by 32.9 percent year-over-year.

Spending on mobile search ads is up 333 percent year-over-year, according to IgnitionOne. Impressions are up 130 percent and clicks are up 325 percent.

According to the report, mobile search claimed 14 percent of total search advertising spend in the second quarter, a 12.3 percent increase from the previous quarter. Tablets accounted for 60 percent of mobile search advertising spend in the second quarter, while mobile phones accounted for the other 40 percent.

IgnitionOne pointed out that travel search advertising spend grew 37.8 percent year-over-year, compared to its 22.8 percent growth in the first quarter. Impressions grew 61.9 percent year-over-year, a notable rise from the 34.3 percent growth in the previous quarter.

The report also shared an estimate that Facebook’s real-time bidding advertising platform will drive an incremental 12-15 percent in retargeting budgets and drive overall display spend higher.

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What Is a Good Click-Through Rate for PPC?

Lisa Raehsler | ClickZ | June 26, 2012

A commonly asked question in pay-per-click (PPC) advertising is "what is a good click-through rate (CTR)?" There is no easy answer and it can vary greatly depending on channel, targeting, keywords, and more.

First, the basics of the CTR:

Defined: The number of clicks received divided by the number of impressions generated. For example, an ad that is displayed 1,000 times and receives 10 clicks has a click-through rate of 1 percent.

Channel differentials: Search and display channel results are very different. We tend to see higher CTRs in search because the searcher is looking for specific information, and is therefore more likely to click when they find it. With display ads, the viewer is passive - doing something else when the ad is served to them.

Why do people care so much about CTRs? The CTR can be an indicator of how relevant an ad is to the searcher or to the audience targeted. It can demonstrate interest in a product message or show what "resonates" with searchers. I also have a theory that there can be an ego factor with CTRs. The bigger the better, right?

Several factors can impact CTR on an ad, which is why there is no definitive answer to the question. A few of the factors to consider include:

• Audiences and targeting
• B2B or B2C
• Brand or non-branded
• A keyword's place in the search funnel
• Ad copy's creative messaging - CTA
• Type of offer
• Display URL
• Images/design
• Industry competitiveness

There are some observed trends in the industry based on PPC managers' experience and the channel's own data.

Search: In a healthy account you will see CTRs vary depending on the type of campaign. For example, branding campaigns typically earn a much higher CTR than non-brand. Advertisers may see 1 percent to 7 percent for non-brand with brand ads being 3 percent and up. Consider the differences in each campaign, but focus on optimizing ads with a CTR less than 1 percent.

Display: Typically advertisers could see 0.05 percent and above, with retargeting campaigns' CTR as much as double the percentage of site targeting campaigns. Try to optimize any ads with CTRs lower than about 0.03 percent, if clicks are a consideration. Most of the time, display ads are used for branding so impressions are a more important metric.

Facebook: Facebook offers two different types of CTR. One is ad CTR, which is the percentage of times the ad or sponsored story is clicked on. The other CTR is the social CTR. This number represents clicks on ads shown with the names of the viewer's friend. Facebook reps have said that CTR is not important and have not shared an average or goal CTR. This seems to be counterintuitive since part of Facebook's algorithm is based on an ad's CTR. Many advertisers will see 0.020 percent to 0.040 percent on average, but I regularly see several CTRs of 0.063 percent and up to 0.5 percent. Focus on optimizing or pausing any ads with less than 0.02 percent.

LinkedIn: According to a LinkedIn rep, the average CTR for ads on LinkedIn is about 0.025 percent. I see that percentage on the low end and then up to 0.06 percent. Focus on optimizing or pausing anything under 0.018 percent.

Determining a good CTR is also common-sense marketing. Sometimes to increase awareness or achieve a goal, advertisers have to bid on less relevant or complementary keywords or audience targets. This can result in a lower than expected CTR. This happens. It's OK. The bottom line is if campaigns are achieving their goals in conversions, traffic, or branding, the CTR is only one piece of the data pie.

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Smartphones and Tablets Changing Paid Search

Marin Software expects that by December 2012, mobile devices will generate a quarter of all paid-search clicks.

Article Written By: Susan Kuchinskas on March 26, 2012 at ClickZ

"Click-throughs from paid search are up on mobile devices - but not conversions. Still, Marin Software's stats may not tell the whole story.

The company's report, The State of Mobile Search in the U.S. 2012, found continued momentum in mobile adoption and search. Last year, mobile search ad spending increased even faster than clicks, the report said."

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