A study from Atlanta-based SearchIgnite and RBC Capital Markets reveals that overall search spending rose in 3Q 07 by almost 2%, and more marketers chose to use those incremental dollars with Yahoo
than Google.
SearchIgnite and RBC routinely partner to release insights on market share and revenue per search of Google, Yahoo and other players in the search space--using spending
data from more than 500 marketers (all of whom are clients of SearchIgnite or sister search firm, 360i).
This quarter's study, entitled "Summer Heats up for Yahoo," tracked impressions and clicks
across Yahoo, Google and MSN from January of 2006 through the end of September 2007. Yahoo releases its quarterly earnings this afternoon.
The research found that advertisers were spending more in
Q3 than Q2--and that they were more apt to put those extra dollars into Yahoo, as Yahoo's percentage of incremental media spend increased by 7.8% in Q3.
The Web giant's uptick was buoyed by
increases in July and August (and slightly tempered by a dip in September). Meanwhile, marketer spend on Google dipped in July and August and jumped back up in September--but overall spending on a
same-client basis only increased by 0.8%.
It's not a seismic shift--as Google still retained a more than 70% share of search media spend in Q3, compared to Yahoo's roughly 20%. But according to
Roger Barnette, president of SearchIgnite, the shifts in incremental spending represent a definite opportunity for Yahoo to gain market share--if the Web giant can continue to deliver valuable, more
cost-effective clicks and impressions in the eyes of search marketers.
"This is not saying that Yahoo severely eroded market share in terms of media being spent--but the increase in incremental
dollars was remarkable over the short term," said Barnette. "In past quarters, if clients had extra dollars to spend, they almost always went more to Google than Yahoo. But in Q3, the vast majority of
those dollars went to Yahoo--and it's a positive trend that if sustained, could help them gain meaningful market share."
Yahoo also saw improvement in share of overall media spend in Q3
07--inching up by almost 2 percentage points--the first reversal of overall share since the Web giant's Panama-related boost in February. In addition, Yahoo's quarter-over-quarter share of impressions
lifted by more than 6 percentage points.
Meanwhile, a closer analysis of Google's share of impressions--specifically from August to September--yields insight into where search marketers' views of
Yahoo's superior ad performance could have stemmed from.
Google countered the "summer search slump" by delivering 62% of all search ad impressions in September--an increase of nearly 8 percentage
points from August--but the increase was flanked by almost an entire percentage point drop in click-through rates.
Whether search marketers will continue to funnel their incremental search
dollars into Yahoo in the hopes of better-performing ads or lower CPCs remains to be seen--as Q4 will yield insight into whether recent changes to the Web giant's algorithm and the launch of features
like Search Assist cause an increase in overall search volume and user retention.
Insiders say that if Yahoo's Search Marketing business is any indication of how the rest of the company performed
in Q3--then Tuesday's earnings call could yield better numbers for shareholders than Q2's.
"The view of Yahoo that we have access to isn't the only thing that affects their stock price, but the
search marketing piece of their business seems to have a lot more momentum than last quarter," said Barnette. "If it's a bellwether for the rest of the business, then the Q3 earnings reports could be
a pleasant surprise."