Commentary

Do Rising Gas Prices Increase Internet Activity?

GasolenePrices

Gasoline prices in California have hit an all-time high. At the local Chevron station, I pay about $4.50 per gallon. Friends have told me they plan store outings more carefully, watching every penny spent at the pump. When the gas gauge reads "empty," it now costs me near $65 to fill up the tank. I admit -- I've been purchasing more merchandise online. Not so much because of the rise in gas prices, but the convenience. For many consumers, however, the price per gallon remains an issue.  

Marketers might infer that gas prices keep consumers at home, clicking on ads, according to Matt Lawson, vice president of marketing and alliances at Marin Software. Will Google's, Bing's and Yahoo's profits rise along with gas prices?

Testing this theory, Marin Software ran some numbers across the more than $2 billion in paid-search marketing spend It manages. The company put together a benchmark around the share across Google and Bing. Company analysts looked at the cost-per-click (CPC), click-through rates (CTR), and conversion rates. Advertisers want to know how each trends. With data in hand, Marin indexed clicks, looking at the rise and fall and the volume of clicks, and then the rise of gas prices during the same time period.

Marin identified a correlation between rising gas prices and rising clicks. To measure the correlation, Marin researchers analyzed the mathematical technology R-Square value to understand the correlation between two values.

Overall, between January and March, Marin saw paid-search clicks rise 41%, and ad spend, 61%.

The automotive sector also showed strong year-on-year and sequential gains, but the 42% rise in CPCs implies increased competition and an opportunity for campaign optimization, Lawson said. In the finance sector, advertisers spent more and click volume rose, but CTRs declined as a result of increased competition, he said.

Based on Marin's findings, the outlook for the second quarter of 2011 looks strong for both advertisers and the engines, but will higher gasoline prices also help to drive up profits for all ecommerce sites?

And by the way, if you're at MediaPost's Search Insider Summit this week in Captiva, Fla., stop by and say "hello."

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