Is search finally feeling the recession? According to Covario, an online marketing analytics firm, it is. In fact, spending from quarter to quarter probably fell for the first time in search history
in the first quarter, the company said.
BusinessWeek's Rob Hof is quick to point out that the report isn't necessarily representative of the wider search industry, as Covario's client base,
used for the research, is largely tech and consumer electronics based.
According to the report, most of the decline in first quarter spending came from Europe, the Middle East and Africa;
altogether, these areas saw a 16% drop in fourth quarter spending, while U.S. spending was actually up 1% and Asia-Pacific rose 7%. Almost all of that decline fell on Google's shoulders, Hof noted, as
the worldwide search leader commands around 95% of search spending overseas. Google also saw its click-through rate fall more than a full percentage point, from 1.8% in the fourth quarter, to 0.7% in
the first quarter. Meanwhile, both Yahoo and Microsoft saw their click-through rates rise.
"The pullback is starting to happen," said Craig Macdonald, Covario's chief marketing officer,
noting that keyword prices continued to fall to their lowest level in two years. "We expect this erosion in spending to continue the rest of the year."
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