Google, Yahoo Show Double-Digit Paid Search Growth

by Wendy Davis, Feb 17, 2006, 6:00 AM

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Google served more than 41 billion sponsored links on its search results pages and publisher network, marking a 14 percent increase from last August, according to new data by Nielsen//NetRatings' AdRelevance unit.

Yahoo served about half as many sponsored search links--23.2 billion--last month, but that figure represents a 21 percent increase from August, when it served 19.2 billion links. The data includes sponsored links on Google Web Search and Google's publisher network, but excludes Froogle, Image Search and other Google properties; likewise, the data includes ads served on Yahoo Search and Yahoo's publisher network.

While consumers' use of search engines also grew last year, the growth in paid search ads doesn't necessarily correlate with the growth in volume of searches, said Ken Cassar, chief analyst, Nielsen//NetRatings. Instead, the number of ads served depends on more complicated factors, including the nature of the terms that consumers query on.

Consider: the volume of searches conducted by consumers was flat from November to December, but Google served 38.1 billion paid search ads in December--9 percent more than November's 35.1 billion--while Yahoo served 25.5 billion paid search ads in December--34 percent more than the previous month's 19.1 billion.

But consumers apparently conducted more searches on the types of keywords that marketers purchase--such as, for example, "iPod"--in December, resulting in more inventory that month.

By far, the biggest purchasers of keywords were e-commerce companies. Online auction site eBay accounted for the largest share of sponsored search ads on both Google and Yahoo. eBay purchased nearly 984 million links on Google last month, accounting for about 2 percent of all Google ads. On Yahoo, eBay accounted for 537 million ads, which also comes to about 2 percent of Yahoo's search inventory. eBay's Shopping.com was the second-heaviest advertiser on both engines, purchasing 448 million ads on Google and 501 million on Yahoo.

"E-commerce companies have always been the biggest users of search, and I suspect that that will be the case indefinitely," Cassar said. He added that large traditional marketers will likely turn to search in the future. "We will start to see brand advertisers using search increasingly as they become more comfortable with the Internet and their tactics evolve."

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