Bing Makes Click Share Gains since June Launch
Data Based on Efficient Frontier’s Q3 2009 U.S. Search Engine Performance Report
SUNNYVALE, Calif. – The Search Engine Marketing (SEM) industry continued its stabilization in the third quarter of 2009 and included some encouraging signs for the fourth quarter. This is according to Efficient Frontier, a leading performance marketing company with more than $750 million in global client spend annually. This data and specific industry trends were released today in the company’s “Q3 2009 U.S. Search Engine Performance Report.”
“The third quarter results and a look beyond provide some encouraging signs for the Search Marketing industry as well as the overall economy,” said David Karnstedt, President and CEO, Efficient Frontier. “While certain sectors, such as travel, have continued to lag, other categories such as retail have picked up as we head into the fourth quarter, which is a critical time for online marketers.”
Report Highlights:
Overall Market Trends
Q3 2009 showed more stabilization for the SEM industry. Quarter on Quarter (QoQ) spend was up slightly at 5% while Year On Year (YoY) declined 5%. YoY declines were driven by continued Cost Per Click (CPC) weakness with market leader Google’s search CPC declining for the fourth straight quarter. Return on Investment (ROI) remained stable as marketers continue to focus on efficiency.
Search Engine Market Share — Paid Clicks and Spend Trends
While continuing to hold a dominant 70% plus share position, Google lost ground in terms of Spend Share both on a QoQ basis a YoY basis by losing 1.78% and 0.83%, respectively. Although Yahoo!’s Paid Click Share was slightly up QoQ, it lost both Spend and Click Share YoY. Yahoo!’s Spend Share was down 0.07% and Click Share was down 2.43% YoY.
In contrast, Microsoft’s Bing continued to grow since its launch in June. QoQ Bing posted gains in Paid Clicks and Spend Share by 0.68% and 1.02%, respectively. Bing’s Spend and Click Share gains seem to be coming from Google rather than Yahoo! in Efficient Frontier’s advertiser base. A closer look at the Bing numbers shows category growth across Travel, Finance, Autos and Retail with the most significant gains in Travel and Finance.
Trends by Vertical Market
A view by industry tells a variety of stories, which is reflective of the overall economy. The travel sector saw a 14% loss QoQ and 39% loss YoY. While the QoQ loss is partially due to the seasonal nature of the travel industry, the YoY loss indicates continued weakness in this space. The Finance category has stabilized with positive growth in consumer demand, with a 1% decrease QoQ and a 7% increase YoY. Autos rode the wave of the Cash for Clunkers program spend with a sharp rise and fall in-line with that program’s start and finish, up 2% QoQ and up 6% YoY. The Retail category showed signs of life as spend was up 6% QoQ and up 2% YoY.
Q409 Outlook
Efficient Frontier believes that marketers’ cautious approach to SEM has begun to thaw as the overall economic outlook improves. Efficient Frontier’s clients are slowly shifting toward a more aggressive approach in the fourth quarter. While the company does not expect a return to the frenzied state of past years, the efficiency gains that resulted from lower competition and prices have left experienced search marketers ready to capitalize on an opportunity for cost-effective sales in the critical holiday season. The net result is a potential for double-digit QoQ and YoY growth in Q4 2009.
Consumers’ Searching Allures Hesitant Retailers
Retail is the obvious key to the fourth quarter and we expect search to outperform the general holiday season spend. Efficient Frontier is seeing a rise in impressions as consumers actively pursue deals and, as a result, retail marketers have increased spend on a YoY basis. The company expects strong consumer activity to continue and aggressive advertiser competition to follow as marketers look to capture interest and more importantly, sales. The net result of better conversions, improving ROI, and higher CPCs, will likely be seasonally strong spend increases for the retail sector in Q4 2009.
Research Methodology
This analysis was completed based on data from Efficient Frontier search engine marketing customers and the resulting Efficient Frontier’s Customer Index. The Efficient Frontier Customer Index represents a subset of the company’s clients with spend data for six consecutive quarters or more. Multiple third party data providers normalized the resulting SEM metrics to average industry category contributions established. The Efficient Frontier Customer Index consists of a fixed sample of large scale U.S. search engine advertisers across multiple sectors, including finance, travel, retail and automotive. The Efficient Frontier Customer Index sheds light on trends in search engine spending and performance on a year-over-year (YoY) and quarter-over-quarter (QoQ) basis.
The complete U.S. Search Engine Performance Report: Q3 2009 is available for download from the Efficient Frontier website at:
http://www.efrontier.com/research/search-engine-report/Q3-2009
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About Efficient Frontier
Efficient Frontier is a leading digital performance marketing company managing search and display optimization for large-scale marketers around the globe. Founded in 2002, Efficient Frontier pioneered the application of modern portfolio theory to Search Engine Marketing. Today, the company combines its core predictive modeling algorithms and bidding technology with comprehensive, value-added services to manage more than $750 million in annual spend globally. The largest and most sophisticated advertisers and agencies partner with Efficient Frontier to achieve and sustain optimal campaign performance and growth in highly complex and competitive marketplaces. The company is headquartered in Sunnyvale, California, with offices in New York, the United Kingdom, France, Germany, and India, and technology licensing partnerships in Japan, Hong Kong and Australia. Efficient Frontier is a privately held company with funding from Redpoint Ventures and Cambrian Ventures. For more information, please visit www.efrontier.com and subscribe to the Efficient Frontier blog at blog.efrontier.com.
