• by Jack Loechner , Staff Writer @mp_research, July 3, 2006

According to the Q1 Search Trend Report recently released by Performics, a division of DoubleClick, sales growth between Q1 2005 and Q1 2006 markedly outpaced campaign growth, While campaign size and cost each grew nearly 40 percent, year-over-year sales surged more that 70 percent. In fact, the return on investment realized by search advertisers in March was stronger than it had been at any time in the previous 15 months.

Stuart Frankel, president of Performics, said "The growing gap between spend and sales indicates that advertisers are making smarter decisions about how to maximize their search marketing spend."

The report found that consumers in Q1 2006 versus Q4 2005 tended to click on more specific keywords rather than generic category terms, which garner higher costs per click. The percentage of keywords priced above $1.00 fell from seven to five percent from the end of Q4 to the end of Q1, while the percentage of total clicks on these keywords dropped more during the same time period.

"Shoppers in the fourth quarter were buying for others... (but) weren't necessarily sure what," said Frankel. "However, in the first quarter, when shoppers were buying for themselves, they had likely already narrowed down the options, and therefore were searching with more specific terms."

The report also confirmed an expected falloff in search costs in Q1 2006 from Q4 2005, the average CPK slid about 50 percent from a fourth quarter high of $59 to near $30 throughout the first quarter.

Other Key Takeaways from the Search Trend Report include:

• Compared to Q1 2005, the average number of active keywords - those receiving at least one click or conversion per month - was up 36 percent in Q1 2006. Total spend and clicks were up 37 and 24 percent, respectively, while sales increased 72 percent.
• Year-over-year growth of active keywords outpaced the growth of clicks indicating searchers were clicking on a wider variety of keywords.
• Although nearly 30 percent of clicks came from keywords priced at a Cost per Click (CPC) of more than 50 cents in December, that proportion dropped to below 20 percent in March.

Frankel concluded that "Seasonal spikes in consumer activity require search advertisers to quickly react to changing market conditions to avoid ineffective ad expenditures,"

For more on the Search Trend report, please go here.