• by Laurie Sullivan  @lauriesullivan, October 5, 2010

A flurry of research reports from paid-search advertising firms identify upticks in the willingness by consumers to spend, at least online.

Surges in paid-search clicks and conversions on traditional paydays could reveal that consumers have begun to loosen purse strings and spend online. While an uptick at the beginning of the month demonstrated growth during Labor Day, the September data from PM Digital also points to spikes in consumer buying behavior during the middle of the month.

September signals the first month that Suzy Sandberg, PM Digital president, noticed the increase, but the plan to research a few months back could reveal that consumer buying habits for the year have begun to change. "We may start indexing and jacking up the amount of bids around the first and fifteenth of the month to accommodate the increase we see," she says. "I want to see if products with higher average order values also index better in the beginning and the middle of the month."

It could dictate changes in PM Digital's paid-search strategy for clients if researching past data proves to be a consistent pattern. PM Digital's research doesn't identify an increase in searches, but rather an increase in click rates and conversions on or within 24 hours of the days that consumers traditionally receive paychecks from employers. The amount spent stems from an increase in clicks and CPCs, although average order values remain flat.

September 2010 data from the PM Digital Index identified that paid-search revenue rose 66% for Labor Day weekend from the prior year. In general, paid-search metrics for the company's retail clients in September reflect positive trends for online shopping. The Index covers all retail categories, including merchandise and apparel.

In September, paid-search revenue increased 57%, and spend also rose in the month more than 65%, along with clicks and conversion metrics. Sandberg believes Google Instant could increase this trend.

San Diego-based marketing firm Covario agrees. Aside from PM Digital, Covario also sees an increase in search spending, but in this case it's a 19.8% sequential uptick, and 46.8% year-on-year, among its technology clients during the third quarter of 2010. The increase prompted the marketing firm to forecast 18% growth for the year, compared with 2009.

Craig Macdonald, senior vice president and chief marketing officer of Covario and the author of the third-quarter Global Search Spending Analysis report, says the impact of Google Instant since the September launch extends key-phrase prediction technology to show that real-time search results have led click-through rates to rise nearly 20 percent.

In the report, Macdonald points to initial research around the impact of Google Instant on paid search. The findings suggest that a proportion of clicks allocated to paid search increased by approximately 4%. So where the share was 82% organic and 18% paid click prior to Google Instant, it changed to 78% organic and 22% paid search.

Macdonald sees a trend toward rising impression for single-word queries. Although unsubstantiated, he has identified "considerable anecdotal evidence" that this continues to occur. He also believes that Google's strong growth can be partially attributed to Google Instant, which seems to be pulling more dollars into paid-search advertising.

The other major issue that Macdonald identifies points to the integration of the Bing and Yahoo platforms during August. Covario saw increases in sequential paid-search ad spend for the companies it supports, about 30% on Bing, and 17% on Yahoo. Increases on Bing should continue through the end of the year as a result of advertisers tapping into paid search to make up for shortfalls in organic search traffic from the algorithm transition.