Global Paid Search Spend Climbs 22 Percent

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Covario has released its quarterly Global Paid Search Spend Analysis, which found that paid search advertising spending in the first quarter of 2012 by technology and consumer electronics companies was up more than 22 percent over the same quarter last year, and 1 percent higher than a strong fourth quarter of 2011.

On a regional basis, year-on-year PPC (pay-per-click) ad spending for the quarter was up 15 percent in the Americas and nearly 88 percent in the Asia Pacific region. This was balanced by Europe, which experienced a decline of almost 2 percent due to ongoing macroeconomic pressures.

All regions had relatively flat quarter-on-quarter growth of between 0 and 2 percent from the typically robust fourth-quarter holiday season.

In the continuation of a development first seen late last year, global CPC (cost-per-click) rates declined for the second quarter in a row – down 3 percent from the fourth quarter of 2011. The study’s author, Charles Gaylord, research analyst at Covario, attributed the deflation in keyword prices primarily to search engine algorithm changes. He believes it will stabilize in the second half of 2012.

Looking ahead, Gaylord said he expects sequential paid search spending growth on a global basis to be in the 1 to 4 percent range for the second quarter, and then resume its double-digit growth momentum in the third and fourth quarters.

“Advertisers are expected to benefit from such drivers as the Summer Olympics, the U.S. presidential elections, and the European Football Championships,” Gaylord said. “The PC industry, in particular, is poised for enormous marketing pushes on behalf of Windows 8 and a flurry of new laptops and ultrabooks.”

Gaylord said current trends are largely in line with expectations and that Covario is still forecasting annual PPC spending growth of 18 to 22 percent in 2012 for global tech companies. This includes 18 to 20 percent growth in the Americas, 15 to 18 percent in the Euro zone, and more than 40 percent growth in Asia Pacific.

Among the search engines globally, spending by tech advertisers on Google was up 23 percent in the first quarter compared to the same period last year. Global paid search ad spending with the Yahoo-Bing alliance was down 20 percent year-over-year, but up 2 percent from the fourth quarter of 2011.

Google continues to command 76 percent of the global paid search market share, while the Yahoo-Bing alliance holds a combined 13 percent global market share among tech advertisers.

Baidu, which has 80 percent of the market in China, grew 4 percent quarter-on-quarter and 142 percent year-on-year. Baidu now accounts for 9 percent of all paid search spending globally.

 

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