More NewsSurvey of SEM Customers Shows Google Grabbed Most Ad Dollars

Survey of SEM Customers Shows Google Grabbed Most Ad Dollars

The majority of a 29 percent increase in search spending in 2007 over 2006 by Efficient Frontier clients went to Google.

Google’s domination of the search market increased nearly 9 percent to 77 percent of total search spend over the past year, among clients of search engine marketing firm Efficient Frontier, that is.

The SEM firm analyzed its clients’ purchases from Q4 2006 to Q4 2007 and released the results in its recent Search Engine Performance Report. The survey tracked nearly 17 billion search ad impressions to determine SEM spending, click-through rates, cost per click, and ROI for Google, Yahoo and MSN ads.

The survey found that clients’ overall SEM spending increased over the year, according to LeeAnn Prescott, director of research and communications for Efficient Frontier.

“That group of advertisers put 29 percent more dollars into the search engines, and 97 percent of that ended up in Google,” she said.

Google’s share of search spend increased from 71 percent to 77 percent, while Yahoo’s share dropped from 24 percent of total spend in Q4 2006 to around 18 percent in Q4 2007. MSN’s search spend remained between 5 and 6 percent throughout the year.

The survey also found that, following the installation of Yahoo’s Panama system in February 2007, Yahoo Search saw a 40 percent increase in ROI compared with the previous year’s statistics, but still suffered a decline of nearly 6 percentage points on spending overall.

“Consistent with what Yahoo’s quarter just delivered, they are monetizing better, but at the end of the day they need to get people in the door,” Ellen Siminoff, CEO of Efficient Frontier said of Yahoo’s Panama system and its overall lack of volume. Though Yahoo revenues increased in some areas in 2007, the firm’s net income for the quarter and full year 2007 was down from 2006.

MSN search ads resulted in the highest ROI, according to the study, which showed MSN results were 27 percent higher than the average ROI across all three major search engines. Prescott attributed the higher ROI to smaller search volumes on the service.

“They are performing very well, but their volume only allows them to grab 5 to 6 percent total share of spend,” she said.

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