Arrow Up: Q4 Search Advertising Trends

While parts of the U.S. are thawing out from the polar vortex, the paid search industry has been doing what it can to keep things feeling hot hot hot

After analyzing quarterly trends across the $5 billion in annualized global ad spend on our platform, it’s clear SEM is hotter than ever.

Here are five key stats for Q4, 2013 across global search engines like Google, Yahoo, Bing, Baidu, Yahoo Japan and AOL:

1. Search ad spend was up 29% quarter-over-quarter (QoQ) and 19% year-over-year (YoY). We always expect a QoQ spike in Q4 due to seasonality, but it’s very encouraging to see the double-digit YoY increase. This shows that, even though SEM is a mature market, there’s still plenty of room for growth and opportunity for marketers to generate returns from the best pull medium in history.

2. Click-through rates (CTR) increased by 13% QoQ and 25% YoY. Global average paid search CTR now stands at 1.9%, the highest point we’ve tracked over the past eight quarters. This is a sign that marketers are continually improving their ad copy with customization at the keyword level. Higher CTR also reflects enhancements by the major search engines to match relevant ads with each query. 



3. Cost-per-click (CPC) rates were up 2% QoQ and 6% YoY. Marketers and financial analysts alike continue to obsess over CPC metrics to gauge the impact of enhanced campaigns. While we did see a slight increase in QoQ and YoY CPCs, the vast inflation that many predicted has not materialized. As sophisticated marketers manage their campaigns in a multi-device format, they continue to pay only what each ad is worth based on business objectives. Bottom line, if paid search CPC goes up, it’s a sign that the ads are working (or at least working better than other channels to which the budget could be allocated),  since marketers are willing to pay more for them.

4. Click volume was 26% higher QoQ and 12% higher YoY. A bump in clicks during Q4 is no surprise, as more and more consumers turn online, and to search engines, to do their holiday shopping.  And marketers are happy to queue up and capture those clicks. What’s more interesting is the fact that…

5. Impressions were up 12% QoQ but down 10% YoY. We know CTR is up, so marketers are being more targeted with their campaigns. Simply put, advertisers need to have their ads show up on search results pages fewer times in order to meet their click and campaign goals. Beyond CTR efficiency, there could also be a broader trend in play here. As the big search engines continue to move toward one-box answer formats -- facts and figures, hotel and flight bookings, weather reports and sports scores, etc.  -- advertisers have fewer opportunities to (literally) make an impression.

If you want to get down to the nitty-gritty, here’s a breakdown of these stats by region:


  • Search ad spend up 31% QoQ and 18% YoY
  • CTR up 16% QoQ and 31% YoY
  • CPC up 3% QoQ and 2% YoY
  • Clicks up 27% QoQ and 16% YoY
  • Impressions up 9% QoQ and down 12% YoY
  • U.S. spend up 33% QoQ and CPC flat QoQ
  • Brazil spend up 11% QoQ and CPC up 13% QoQ

Europe, Middle East, Africa (EMEA)

  • Search ad spend up 23% QoQ and 23% YoY
  • CTR up 4% QoQ and down 2% YoY
  • CPC down 5% QoQ and up 18% YoY
  • Clicks up 29% QoQ and 4% YoY
  • Impressions up 24% QoQ and 6% YoY
  • U.K. spend up 13% QoQ and clicks up 15% QoQ
  • France spend up 11% QoQ and clicks up 5% QoQ
  • Germany spend up 34% QoQ and clicks up 16% QoQ

 Asia Pacific Japan (APJ)

  • Search ad spend up 16% QoQ and 29% YoY
  • CTR up 4% QoQ and 38% YoY
  • CPC down 9% QoQ and 35% YoY
  • Clicks up 7% QoQ and down 5% YoY
  • Impressions up 2% QoQ and down 31% YoY
  • Australia spend up 12% QoQ and clicks up 6% QoQ
  • China spend up 31% QoQ and clicks up 6% QoQ

For those who do better with visuals, check out the infographics these numbers were pulled from.

Happy benchmarking, and stay warm!

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