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U.S. Search Ad Spending Sees Strong Growth

  |  January 21, 2011   |  Comments

Google continues to attract more spend, despite Microsoft and Yahoo's search partnership.

The U.S. search market enjoyed a period of strong growth during the final three months of 2010, as indicated by reports from two major search management platform providers. Efficient Frontier and SearchIgnite detailed strong increases in advertiser investment versus the fourth quarter of 2009, with Efficient Frontier customers upping their spend by 23 percent and SearchIgnite customers goosing theirs by an even more substantial 35.5 percent.

That growth implies a return to health for the sector following the challenging economic climate of 2009, when spending growth was anemic. This time last year, Efficient Frontier reported clients increased their Q4 2009 spend by just 6 percent, while spending by SearchIgnite customers grew a mere 0.1 percent.

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"The fourth quarter was a great quarter, and what's interesting is it wasn't only led by retail, which is typically strong at that time of year," Roger Barnette, CEO of SearchIgnite, told ClickZ. "Strong growth in sectors such as travel and finance speaks to a broader economic recovery, and we expect that sentiment to carry over into next year."

Efficient Frontier reported similar findings, with every sector increasing spend by at least 18 percent versus the fourth quarter of 2009. Clients in the finance and travel verticals boosted spending by 30 percent and 42 percent, respectively.

For 2010 overall, SearchIgnite saw spending rise 18.5 percent on a year-over-year basis. Although that growth came from a relatively low base due to subdued 2009 spending, Barnette predicted a similar rate of growth in 2011. "Discussions we're having with clients so far this year are about longer-term planning, and strategic decisions versus reactive ones," he said, suggesting more stable client spending.

In terms of where that money is being spent, both SearchIgnite and EfficientFrontier reported tangible declines in share for Yahoo and Microsoft despite, or perhaps as a result of, the search partnership the pair put into effect in October.

Some Microsoft/Yahoo money has been diverted to Google, which grew its share from 74 percent to 78.6 percent in the fourth quarter of 2010 - year-over-year - from Efficient Frontier's clients. Among SearchIgnite's customers meanwhile, Google grew its share of spend from 80.2 percent to 82.6 percent between the third and fourth quarters alone.

Yahoo and Microsoft have said it will take time for their partnership to reap benefits for advertisers, as increased scale helps them achieve greater efficiencies and quality for their ad placements. Barnette said his company is "keeping a close eye" on the percentage of media being spent with the alliance.

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ABOUT THE AUTHOR

Jack Marshall

Jack Marshall was a staff writer and stats editor for ClickZ News from 2007 until August 2011. 

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