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-Q1 2009 Search Engine Performance Report provides leading economic indicators as Advertisers and Search Engines compensate for changing consumer behaviour to increase profitability-
As the recession continues, Advertisers and Search Engines alike have begun to successfully adjust their strategies by mapping to recent changes in consumer behaviour to increase profitability. Additionally, Return on Investment (ROI) in Search Engine Marketing (SEM) has shown a significant increase, a testament to the continued strength of the channel, according to the Efficient Frontier UK Search Engine Performance Report: Q1 2009. The report, developed by Efficient Frontier, the worldwide leader in Search Engine Marketing technology and services, is the largest independent research in the search marketing industry. It is based on an analysis of 7 billion impressions and 114 million clicks across a portion of Efficient Frontier clients, which includes some of the world's largest brands.
The results of the Q1 research show that Advertisers have improved their ROI by 25% between Q4 2008 and Q1 2009 while spending 10.5% less. This demonstrates a continued shift towards an efficiency model as Advertisers reduce spend in order to maintain ROI. Impression volume for Q1 2009 outstripped the usual seasonal increase as more consumers used search to buy products and get information. In addition, Advertisers took advantage of the new consumer targeting offerings of the Search Engines.
David Karnstedt, President and CEO of Efficient Frontier, says, "As the leading SEM firm, our Quarterly Performance Report serves as a barometer for what is happening in the overall economy. We believe that ROI will continue to be a priority for Advertisers as they seek greater efficiencies in keyword marketplaces. This trend, coupled with increased search volume, represents a significant opportunity for Advertisers to gain market share in key categories and obtain additional, valuable traffic at a discounted price point.”
Karnstedt continues, “In the current economic environment, ROI will continue to be a priority as Advertisers trend towards the efficiency model in an effort to reach a higher ROI as a buffer against economic uncertainty. The drop in CPCs indicates a deflation in the marketplace. Thus we find ourselves at an interesting cross-road. On the one hand, Advertisers are cutting budgets resulting in cheaper clicks, on the other hand more users are searching online. This situation presents the ideal opportunity for large Advertisers with deeper pockets to expand in this market, consolidate their market share, and get more valuable traffic at a discounted price point.”
Search Engine Market Share
Google continues its Y/Y growth due to its Content Network. Google’s Content network is interestingly still outperforming Microsoft Live Search in Q1 2009, holding its market share at 6% compared to Microsoft’s 3.9%. Google Search holds its dominant position at 80.6% market share in Q1 2009. Yahoo has a 9.5% market share over the same period, up from 8.7%.
Search Engine Spending Trends
SEM spending decreased by 6% Y/Y. This follows the trend that Advertisers are spending less due to economic pressures. Between Q4 2008 and Q1 2009, spending decreased by 10.5%, which can be attributed in part to the seasonal rise in retail spending in Q4, which tapers off again after the Christmas period. However, although Advertisers are spending less, ROI is improving as competition is reduced and CPCs decline.
U.K. Key Metric Performance Trends
Impression volume for Q1 2009 outstripped the usual seasonal increase and is significantly higher compared to last year on both Google and Microsoft. This shows that users are searching more online. The recession has caused the UK to be more cost conscious, thereby searching longer for a better deal online. Another cause is Google and Microsoft have been able to optimise their unused inventory. By Google removing minimum bids, it brought a large number of previously inactive keywords rapidly into play.
Return on Investment
Strong Y/Y and Q/Q performance in ROI is observed across the UK Efficient Frontier Customer Index. Engines in total saw uplift in ROI of 25% Q/Q and 10% Y/Y indicating that ROI is the Advertiser’s preferential objective for 2009 after Q4 saw many push impression volume at all costs in time for the Christmas trading period.
Analysis for the Efficient Frontier report was based on data from a fixed sample of the overall Efficient Frontier UK customer base from Q1 2008 through Q1 2009, and covers over 7 billion impressions and 114 million clicks across an index of Efficient Frontier UK customers. The report includes data from advertisers in the financial services, travel and entertainment, retail and telecommunications verticals.
About Efficient Frontier
Efficient Frontier is the worldwide leader in providing search engine marketing solutions for large advertisers and agencies. Founded in 2002, Efficient Frontier pioneered the application of modern portfolio theory to SEM and today combines its core predictive modeling algorithms and bidding technology with comprehensive strategic and tactical value-added services to manage more than $750 million in annual search 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 search marketplaces. The company is headquartered in Sunnyvale, CA 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.
For further information, please contact:
European Marketing Manager
t: +44 020 7166 5220
Published on: 5:06PM on 16th April 2009