More Consumers Connect With Paid-Search Ads

Search campaigns generated stronger click-through rates overall in the first quarter compared with a year ago, suggesting healthy growth for the paid-search industry this year. In fact, impressions, clicks and budgets rose across numerous industry segments -- not only suggesting more searches made, but that consumers connected with ads, according to Marin Software's "Key Trends & Insights for Q1 2011" report.

On average, advertisers spent 61% more on paid-search campaigns during the quarter, compared with the first quarter last year. Plus, consumers displayed a higher propensity to click on them. Most of the extra ad spend is being driven by larger budgets and higher CTRs, per the report.

Marin analyzed the behavior of six industries and uncovered a few unexpected trends. The insights range from median values for click-through rates and cost per click across verticals to sequential and annual changes to key metrics for industry-specific trends.

Automotive, business-to-business, education, finance, retail and travel spent more on paid-search marketing campaigns in the first quarter than in the year-ago quarter. Investments for the respective industry segments increased in the quarter by 221%, 78%, 27%, 78%, 59%, and 93%, respectively, compared with 2010.

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More people clicked on paid-search ads in the quarter, as well. Automotive experienced a 127% jump in clicks on paid-search campaigns, while B2B followed with 101%; education at 36%; finance at 76%; retail at 51%; and travel at 74%.

Click-through rates varied during the period. Clicks related to the automotive industry rose 63% year-on-year; B2B jumped 59%; education, 10%; retail 17%; and travel, 11%. Finance CTRs, however, fell 35%. Most segments took a beating on sequential CTRs. Automotive rose sequentially 23%, and travel 3%; but B2B fell 9%; education, 28%; finance, 6%; and retail, 3%.

How much more did the industry segments spend per click for the first quarter? Automotive spent 42%; B2B 12% less; education 7% less; finance 1% more; retail 5% more; and travel 11% more.

Analyzing each industry segment points to the automotive sector demonstrating the strongest annual and sequential gains -- but CPCs increased by 42%, suggesting tougher competition and an opportunity for campaign optimization, according to the report. Educators increased the amount spent on ad campaigns sequentially, but clicks rose by a disproportionately higher percentage.

Marin noticed a slight year-on-year decline for CPCs, implying improved campaign and budget efficiencies.

In the finance sector, companies spent more and the volume of clicks rose significantly, but CTRs declined as a result of increased competition. For retail, CPCs rose on average 18% during the holiday season, but only saw a 5% year-on-year increase. Marin calls this "positive." CTR increased 17% year on year, indicating more engaged consumers and more effective search programs.

2 comments about "More Consumers Connect With Paid-Search Ads".
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  1. Daniel Laury from Geary LSF , April 29, 2011 at 9 p.m.

    Looks nice, but if true, Google's stock should be a screaming buy. Not sure they generated that kind of results in their Q1 numbers. Can someone correlate those numbers to Google's?

  2. Chris Nielsen from Domain Incubation, May 2, 2011 at 8:49 p.m.

    So click rates and CPC are up... how wonderful!

    On second thought, is this really such a good thing? How can anyone tell when there is no data for conversions or ROI?

    For those of us that have to deal with rising costs from CPC bidding wars and what appears to be increased click fraud or at least non-converting clicks, increasing click numbers invoke more dead than elation.

    Without conversion data to show increased expense also generates more business and profits, it's really just one part of the what should be the complete story, IMO.

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