Small businesses spent 111 percent more on SEM during Q4 compared to '08, according to a new report from WebVisible.
Click-throughs on small business ads were up between Q4 2008 and Q4 2009 on Yahoo and Bing, according to a new report. Local online advertising firm WebVisible said improved CTR on Yahoo and Microsoft 's Bing search engine ads signals promise that the search ad partnership between the two firms will help small business advertisers.
While CTR on Google ads rose 32 percent for the 12,000 advertisers observed in Q4 2009, Bing click-through rates climbed 109 percent and Yahoo 123 percent, compared to fourth quarter 2008. "Bing's higher CTR shows how the soon-to-be implemented Microsoft-Yahoo! search deal will benefit small business advertisers," the company stated in its report.
Greg Sterling, founding principal of Sterling Market Intelligence, suggested the primary benefit to the Bing/Yahoo partnership is buying efficiency. "It just makes it easier for people to buy from two systems rather than three."
WebVisible's report tracks its U.S. and U.K. clients and their search ad spending. The firm said U.S. small businesses spent an average of $2,149 on search ads through its service in Q4 of last year, a 111 percent increase over the same quarter 2008. The company suggested the spending jump "shows increased confidence by small businesses utilizing search to gain leads." According to the report, strong spending in Q3 and Q4 followed "a dismal second quarter of 2009."
Ad prices were lower on Yahoo and Bing than Google, according to the report. Compared to Q4 2008, CPC prices paid by the firm's clients on Google rose 12 percent, while rates on Bing and Yahoo increased 2.2 percent and 2.5 percent respectively.
Despite lower ad costs and higher CTR on Bing and Yahoo, WebVisible reported that Bing's share of search ad spending was up less than 1 percent year-over-year. Yahoo's dropped 6.6 percent in that time. Ask.com, however, gained share of spending in 2009 by WebVisible's advertiser clients at the expense of Google; resellers shifted 4.5 percent of spend from Google to Ask, which offers lower CPC rates.
"Most small businesses don't buy search advertising directly," said Sterling. "They work with partners to help facilitate these campaigns." He said small businesses have become a bit savvier when it comes to gauging ROI of their search advertising - whether they're buying through firms like WebVisible, yellow pages publishers, or on their own. "I think that there is a greater sophistication around what [they are] buying and what is being delivered."
Small business advertisers in the U.K. spent much less on search ads on average through the service - just $183 per advertiser - than their U.S. counterparts, mainly because keywords are priced lower in the U.K. The company based the finding on spending by more than 10,000 U.K. advertisers. In addition, U.K. advertisers buy fewer keywords than those in the U.S. - 26 compared to 67 on average. WebVisible suggests the disparity indicates room for growth in the U.K. market.
Sterling agreed that lower expenditures in the U.K. and fewer keyword purchases "suggests less competition and does suggest that there's growth potential there."
You can follow Kate Kaye on Twitter at @LowbrowKate.
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Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.
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