Paid Search Budgets Rise, Gain Efficiencies At Lower Costs
- by Laurie Sullivan @lauriesullivan, July 7, 2011
Advertisers spent 20% more on paid search campaigns in Q2 2011, compared with the year-ago quarter, but also increased efficiencies. Click-through rates rose 12%, while the overall cost per click (CPC) remained the same. The rise in spend wasn't a result of rising CPCs, as advertisers scaled up campaigns in North America, but becoming more efficient. That's according to the Paid Search Quarterly Benchmarking Report Marin Software plans to release Friday.
Key findings from the Q2 report reveal Google advertisers saw a dramatic decline in impressions. The average marketer experiencing a 15% drop, while click volumes rose by 8%. This suggests either search marketers took steps to improve efficiency or Google modified its algorithm for matching ads to queries, according to Marin Software VP Matt Lawson.
Analysis shows that gains in efficiency during the past year have been a result, in part, of advertiser efforts to refine match types. The share of paid clicks from exact- and phrase-match keywords rose 10 percentage points during the last year at the expense of broad-match clicks.
Exact and phrase keywords have higher click-through rates and lower costs than broad match terms, which not only explains the gains in efficiencies advertisers found during the quarter, but also improvements in quality scores, according to Lawson.
In the past year, search marketers have increased their use of exact- and phrase-match keywords, growing click-share of these terms by 7% and 3%, respectively. Aside from exact- and phrase-match keywords the engines, spend on Yahoo and Bing rose 52%, compared with the year-ago quarter as advertisers built out their campaigns on the combined platform.
Advertisers also experienced a boost in effectiveness on the Yahoo-Bing platform, reflected by a 6% rise in CTRs. The automotive and financial sectors experienced better results in Q2 2011. The automotive sector showed strong gains on annual and quarterly bases, with median spend continuing to increase during the second quarter. CTRs rose with lower costs, suggesting the auto sector had become more efficient at paid-search advertising.
Companies in the finance industry experienced 91% growth, compared with the year-ago quarter. This sector showed increased investment while holding down costs and running paid-search campaigns efficiently, according to the report.
As main line marketers to improve on efficiencies for paid search, the opportunities for SMBs to move in the same positive direction are beginning to evolve.
SMBs, and especially the smaller Mom & Pops, are now afforded the same efficiency gains through the use of simplified DIY SEM models.
Semplest has "cracked the code" for the SMBs on both the local and national platforms.
Running paid-search campaigns efficiently as well as using the "cheaper" exact and phrase match keywords are definitely a good start but ultimately you have to be aware of a number of other variables.