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Travel and mobile are q2 bright spots as search spending growth slows
1.
Online Advertising Report Q2
2012 ■ A report by digital marketing solutions firm, IgnitionOne Follow us on Twitter: @IgnitionOne
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nnect. P e r for m. Conve rt. 2 CONTENTS Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Paid Search U.S. Spend Trends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 U.S Search Engine Market Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 U.S. Mobile and Tablet Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 U.S. Travel Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Look Forward Facebook RTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Google Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 About IgnitionOne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.
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nnect. P e r for m. Conve rt. 3 EXECUTIVE SUMMARY Q2 2012 brought with it a slowdown in growth across many search marketing metrics. Bright spots in the quarter are seen in the travel vertical which saw impressive gains as well as the strong continued growth in mobile search advertising. ■ US SEARCH GROWTH SLOWS IN Q2 – Search spend in Q2 was up 15.5% when compared to Q2 2011. At nearly half the growth rate of last quarter, this represents a slowdown in growth of paid search spending. This slowdown in growth of spend can be presumably blamed on the current weakness of the macro-economy and softness of the retail vertical in the quarter. ■ YAHOO!/BING CONTINUES TO OUTPACE GOOGLE SPEND GROWTH IN US – While Yahoo!/Bing impressions and clicks did not grow faster than Google, its CPCs and search spend certainly did. While Google only grew 11.4% in spend, YoY, in Q2, Yahoo!/Bing grew 32.9%. As this growth is off a smaller base, it did not translate into an increase in market share for Yahoo!/Bing. ■ US TRAVEL VERTICAL BREAKS FROM PACK AND HAS STRONG GROWTH – Continuing last quarter’s trend there was impressive growth in activity and spend in Q2 compared to the same time period last year. Travel impressions were up 61.9% and search spend among travel marketers increased 37.8% YoY. ■ CONTINUED INCREASE IN MOBILE ADVERTISING – US Mobile grew to 14% from 12% of total search budgets with a huge 333% increase in spend YoY. The mobile search ads also had greater growth in engagement as clicks grew 325% while impressions grew 130%. www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.
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nnect. P e r for m. Conve rt. 4 PAID SEARCH U.S. SPEND TRENDS In the second quarter of 2012, paid search spending grew at 15.5% YoY, representing a slowdown compared to the increasing growth in the past two quarters (22.4% in Q4 2011 and 30.3% in Q1 2012). The YoY increases in clicks were also smaller than the preceding quarter, up 13.2% (compared to 29.1% in Q1). Click through rates were flat YoY ending an upward trend. Impressions, however, grew faster than last quarter with a 13.7% increase YoY (compared to 7.2% in Q1). YoY Search Spend Growth by Quarter 2010-2012 YoY Search Spend Growth by Quarter 2010-2012 40% YoY Change in Spend 30% 20% 10% 0% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 © 2012 IgnitionOne Total CPCs were up slightly YoY (2.1%) with Google CPCs continuing to decline (down 3.1%). This continued decrease can be blamed on increasing reliance on mobile, which has cheaper CPCs as well as increasing use of new ad formats which are generally lower PPC clicks. The decrease in CPCs seems to be slowing, and was not as large as in previous quarters. Conversely, Yahoo!/Bing saw continued strong increase in CPCs with a 24.3% jump, which is on par with last quarter. As we highlighted last quarter this can be attributed to Yahoo!/Bing’s promoted best practices which led to greater competition in auctions through the increased use of broad match keywords as a stepping stone for exposure across other match types. www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.
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nnect. P e r for m. Conve rt. 5 U.S SEARCH ENGINE MARKET SHARE In Q2 market share shifted back towards Google holding 79.1% of share compared to Yahoo!/Bing with 20.9%. While this is a smaller share for Yahoo!/Bing when compared to Q1, it represents a 1 percentage point increase from Q2 2011. Yahoo!/Bing increased search ad spend by 32.9% YoY, which tops Google’s 11.4% growth. Again we feel this is due to greater competition in auctions through the increased use of broad match keywords as a prerequisite for exposure across other match types. Quarterly Percentage of Advertising Spend by Engine Quarterly Percentage of Advertising Spend by Engine 90% 80% 79.1% 70% Advertising Spend Percentage of 60% 50% 40% 30% 20% 20.9% 10% 0% Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Google Yahoo! Search/Bing © 2012 IgnitionOne www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.
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nnect. P e r for m. Conve rt. 6 U.S. MOBILE AND TABLET TRENDS A bright spot for Q2, mobile and tablet search advertising continues to grow at an enormous rate. Spending on mobile search ads is up 333% YoY; impressions are up 130% YoY; and clicks are up 325% YoY. This is an acceleration across the board over last quarter. Mobile search holds 14% of total search advertising spend in Q2, which is an increase over the past quarter (12.3%), continuing the growth of this channel. Tablet devices accounted for 60% of the total mobile search advertising budget for the quarter. Q2 Mobile Search Spend Share by Device Mobile 40% Tablet 60% Mobil Search Growth Q4 2011 - Q2 2012 Mobile Search Growth Q4 2011 - Q2 2012 300% 3.1% 200% 2.5% 100% 0% Q4 11 Q1 12 Q2 12 www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.
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nnect. P e r for m. Conve rt. 7 U.S. TRAVEL HIGHLIGHTS The travel vertical’s search advertising continued from a strong first quarter with its second robust quarter in a row. Travel search advertising spend grew 37.8% YoY, compared to 22.8% in Q1. Impressions were also up 61.9% YoY, a significant increase in growth compared to Q1 (34.3%). A portion of this increase in spend and impressions can be attributed to a growth in tablet and mobile search advertising efforts. LOOK FORWARD FACEBOOK RTB Facebook recently announced plans for the introduction of real-time bidding (RTB) for advertising on its site. This will allow for retargeting within the advertising Facebook inventory. This is a massive new inventory source that will now be available to the market — possibly the biggest proprietary audience source. We feel that this new advertising opportunity will quickly supplant all marketplace advertising within Facebook. There are challenges with this new opportunity, however. The ad units are not standard IAB units and will force advertisers to optimize for an additional creative. It is also yet to be proven if these Facebook ad sizes will be successful for RTB. There is also disappointment that the data provided to advertisers does not include the deep data owned by Facebook. As a new opportunity, we estimate this will drive an incremental 12-15% in retargeting budgets and drive display overall spends higher. GOOGLE SHOPPING Google has announced that its free product feed management service, Product Search, will soon transition to a pure paid model, called Google Shopping, by Oct. 1st. This switch to a biddable media from what was a rich source of qualified organic traffic for retailers, will drive an increase in budgets. As this will not cannibalize current business, this represents a significant opportunity for Google. For retail marketers, while adding cost, this change will allow for more control over product and category listings. www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.
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nnect. P e r for m. Conve rt. 8 METHODOLOGY This is one in a series of reports from IgnitionOne, which have tracked more than 88 billion impressions and more than 2.1 billion clicks on Google and Yahoo!/Bing search networks, Google AdEx, and other display networks from January 1, 2006 through June 15, 2012. Other reports can be found at http://ignitionone.com/en/about/research-white-papers.php About IgnitionOne IgnitionOne®, the global leader in digital marketing For more information, solutions, enables companies to integrate and centralize please visit cross-channel marketing efforts within one platform, www.ignitionone.com allowing for deeper insights and greater digital success. On behalf of our customers, IgnitionOne currently scores or follow the company on Twitter over 300 million users in 53 countries to help optimize @IgnitionOne media and website conversions using cross-channel attribution modeling across search, mobile, display and social. IgnitionOne’s solutions are powered by proprietary, integrated technology: IgnitionOne’s Digital Marketing SuiteSM. IgnitionOne powers more than $30 billion in revenue each year for leading brands, including General Motors, Chico’s, Ann Taylor, La Quinta, Travel Guard and Fiat, as well as advertising agencies such as MRM Worldwide and CyberAgent. www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.
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