Findings from Efficient Frontier's quarterly report scheduled for release Tuesday suggest Google's share of search budgets rose to 74.5% in the fourth quarter, 2009, up from 73.9%, sequentially. Yahoo fell to 20.4% in the fourth quarter from 20.9% in the third, and Bing to 5.1% from 5.3%, respectively.
Retail lifted search spend in the fourth quarter. Search in the retail sector grew 17%, from the prior year, driven by search query growth. Both finance and automotive search spend rose 2%, but travel spend slipped 20%, driven by weak costs per click (CPCs).
While query volumes continue to grow, click-through rates (CTRs) are not keeping pace. CTRs fell 40% in the fourth quarter 2009, compared with the year-ago quarter. Efficient Frontier attributes the decline to the number of consumers who choose to compare pricing with comparison tools from Google and others. Allowing consumers to see prices in the search query results eliminates the need to click through to sites, unless users are actually interested in the product.
These types of tools will force CTRs to decline. And as the downward spiral continues, query and marketing share become more important. Google's click share rose to 74.4% from 71.7%, reversing a mostly downward trend since the second quarter in 2009. Bing declined slightly by 0.1%, to a 4.6% share. Yahoo lost 3.4% percentage points in share from last year's Q4 results, finishing that quarter at 21%.
CTRs fell, but conversion rates held steady once people clicked through. "We didn't see conversion rates fall off, so once people actually clicked, the conversion rate stayed pretty much the same year over year, but the transaction size fell about 5%," says Justin Merickel, vice president of marketing and new product development at Efficient Frontier.
Following the strong fourth quarter results, Efficient Frontier expects search engine marketing budgets in 2010 to rise at a rate of 15% to 20%. Market competition in SEM should continue to recover, adding CPC growth on top of volume expansion. And, expect Bing to grow 30% in 2010, giving it between 6% and 7% share of paid clicks, according to the Efficient Frontier report. But if you follow the stats, it's not clear if marketers will allocate more of their budgets across the three major search engines.
Brad Butler, chief operating officer at Asadart Ecommerce Specialty Shops, admits to surrendering the majority of last year's marketing budget to Google, but he tells me a few reasons why not to give it all up to the Mountain View, Calif. company.
Bing and Yahoo still provide some incremental search revenue -- and not much is still better than nothing, Butler says. He admits Yahoo and Bing convert nearly similar to Google, so using them is not a bad marketing investment. The problem is in Yahoo and Bing's search volume -- low numbers mean connecting with fewer people.
Marketers who may want to attract new Internet searchers may want to keep at least some of their budget on Bing and Yahoo. Butler's marketing friends tell him other search engines attract consumers who do not use Google as their primary search engine. Bing and Yahoo are often default search engine selections that come with new software and computers.
"While I suppose this is the case in some industries, I personally don't believe this to be the case in ours," Butler says. "We haven't found a discernible difference in the type of customer who comes to us from Google vs. Yahoo, Bing or any of the others."
When it comes down to the penny, Butler tells me some marketers just aren't ready to give up all to the "mighty G, if for no other reason than fear of missing out on something -- or perhaps because their competitors are still marketing on the other [engines, where] they feel they have to be... too."