Report: Key Indicator Search Engine Ad Coverage Up

During the second quarter of the year, the top three search engines saw healthy increases in first-page advertiser activity -- "indicative of an economy which finally appears to be waking up," according to new research from AdGooroo.

The increases were not equally distributed among the search engines, however. AdGooroo recorded an increase of 7.3% in first-page advertisers on Google, but only 2.8% for both Yahoo and Bing.

This disparity translated into a slight increase in advertiser share for Google, which has remained steady at 80% for about 18 months, according to the Web marketing data and keyword tools provider.

One indicator that has proven to be a reliable predictor of search revenues is ad coverage -- the average number of ads shown per search query. As such, there was a discernible increase in ad coverage for all three engines over the quarter, with Google increasing the average number of ads shown by 15%; Yahoo by 22%; and Bing by 11%.

In its latest report, AdGooroo also looked at the ratio of ads to search results presently being employed by the top search engines. "If Google's past performance is any guide, the magic number appears to be around 5.5-6.0 ads per query."

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Presently, Yahoo is now at 6.85, which leads AdGooroo to conclude that it's unlikely that the increase in ads in the second quarter will lead to much additional revenue.

Conversely, Bing is currently only showing 3.85 ads per keyword, so it's far more likely this will be reflected in better-than-expected revenues. Likewise, Google went from 4.97 to 5.72, so there's a good chance they will report healthy increases as well.

Also of note, Google during the second quarter tweaked its natural rankings algorithm, which was intended to improve the relevance of long-tail searches by eliminating auto-generated content from the search results.

"Not only were we able to confirm that many auto-generated sites were largely removed from Google's index, we also noted that Google is now monetizing nearly 8% more of their keyword searches (keywords with no ads decreased from 43.6% in Q1 to 39.7% in June)," according to AdGooroo. "This is a very positive sign."

Among search verticals, AdGooroo recorded substantially increased spends for cell phone service providers, auto insurance, and printer ink vendors. On the other hand, it saw large drops in travel and online retail -- both likely seasonal -- as well as mortgage lenders -- not seasonal, but the downward trend appears to be decelerating.

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