Travel and mobile are q2 bright spots as search spending growth slows

■ A report by digital marketing solutions firm, IgnitionOne

Online Advertising Report

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Q2 2012

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2

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Paid Search

U .S . Spend Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

U .S Search Engine Market Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

U .S . Mobile and Tablet Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

U .S . Travel Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Look Forward

Facebook RTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Google Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

About IgnitionOne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

CONTENTS

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Q2 2012 brought with it a slowdown in growth across many search marketing

metrics . Bright spots in the quarter are seen in the travel vertical which saw

impressive gains as well as the strong continued growth in mobile search advertising .

■ US SEARCH GROWTH SLOWS IN Q2 – Search spend in Q2 was up 15 .5% when compared to Q2 2011 . At

nearly half the growth rate of last quarter, this represents a slowdown in growth of paid search spending . This

slowdown in growth of spend can be presumably blamed on the current weakness of the macro-economy

and softness of the retail vertical in the quarter .

■ YAHOO!/BING CONTINUES TO OUTPACE GOOGLE SPEND GROWTH IN US – While Yahoo!/Bing

impressions and clicks did not grow faster than Google, its CPCs and search spend certainly did . While

Google only grew 11 .4% in spend, YoY, in Q2, Yahoo!/Bing grew 32 .9% . As this growth is off a smaller base,

it did not translate into an increase in market share for Yahoo!/Bing .

■ US TRAVEL VERTICAL BREAKS FROM PACK AND HAS STRONG GROWTH – Continuing last

quarter’s trend there was impressive growth in activity and spend in Q2 compared to the same time period

last year . Travel impressions were up 61 .9% and search spend among travel marketers increased 37 .8% YoY .

■ CONTINUED INCREASE IN MOBILE ADVERTISING – US Mobile grew to 14% from 12% of total search

budgets with a huge 333% increase in spend YoY . The mobile search ads also had greater growth in

engagement as clicks grew 325% while impressions grew 130% .

EXECUTIVE SUMMARY3





U.S. SPEND TRENDS

In the second quarter of 2012, paid search spending grew at 15 .5% YoY, representing a slowdown compared

to the increasing growth in the past two quarters (22 .4% in Q4 2011 and 30 .3% in Q1 2012) . The YoY increases

in clicks were also smaller than the preceding quarter, up 13 .2% (compared to 29 .1% in Q1) . Click through

rates were flat YoY ending an upward trend . Impressions, however, grew faster than last quarter with a 13 .7%

increase YoY (compared to 7 .2% in Q1) .

Total CPCs were up slightly YoY (2 .1%) with Google CPCs continuing to decline (down 3 .1%) . This continued

decrease can be blamed on increasing reliance on mobile, which has cheaper CPCs as well as increasing

use of new ad formats which are generally lower PPC clicks . The decrease in CPCs seems to be slowing, and

was not as large as in previous quarters . Conversely, Yahoo!/Bing saw continued strong increase in CPCs

with a 24 .3% jump, which is on par with last quarter . As we highlighted last quarter this can be attributed to

Yahoo!/Bing’s promoted best practices which led to greater competition in auctions through the increased

use of broad match keywords as a stepping stone for exposure across other match types .

PAID SEARCH4


YoY Search Spend Growth by Quarter2010-2012

YoY Search Spend Growthby Quarter 2010-2012

© 2012 IgnitionOne

1Q10

2Q

10

3Q

10

4Q

10

1Q11

2Q

11

3Q

11

4Q

11

1Q12

2Q

12

40%

30%

20%

10%

0%

Yo

Y C

han

ge in

Sp

en

d




U.S SEARCH ENGINE MARKET SHARE

In Q2 market share shifted back towards Google holding 79 .1% of share compared to Yahoo!/Bing with 20 .9% .

While this is a smaller share for Yahoo!/Bing when compared to Q1, it represents a 1 percentage point increase

from Q2 2011 . Yahoo!/Bing increased search ad spend by 32 .9% YoY, which tops Google’s 11 .4% growth . Again

we feel this is due to greater competition in auctions through the increased use of broad match keywords as a

prerequisite for exposure across other match types .

© 2012 IgnitionOne

Quarterly Percentage of AdvertisingSpend by Engine

Q1

07

Q2 0

7

Q3

07

Q4

07

Q1

08

Q2 0

8

Q3

08

Q4

08

Q1

09

Q2 0

9

Q3

09

Q4

09

Q1

10

Q2 1

0

Q3

10

Q4

10

Q1

11

Q2 1

1

Q3

11

Q4

11

Q1

12

Q2 1

2

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

79.1%

20.9%

Google Yahoo! Search/Bing

Perc

en

tag

e o

f A

dvert

isin

g S

pen

d

Quarterly Percentage of Advertising Spend by Engine


5




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U.S. MOBILE AND TABLET TRENDS

A bright spot for Q2, mobile and tablet search advertising continues to grow at an enormous rate . Spending

on mobile search ads is up 333% YoY; impressions are up 130% YoY; and clicks are up 325% YoY . This is an

acceleration across the board over last quarter .

Mobile search holds 14% of total search advertising spend in Q2, which is an increase over the past quarter

(12 .3%), continuing the growth of this channel . Tablet devices accounted for 60% of the total mobile search

advertising budget for the quarter .


Q2 Mobile Search Spend Share by Device

Mobile40%

Tablet 60%

Q4 11 Q1 12 Q2 12

300%

200%

100%

0%

2.5%

Mobil Search GrowthQ4 2011 - Q2 2012

3.1%

Mobile Search GrowthQ4 2011 - Q2 2012




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U.S. TRAVEL HIGHLIGHTS

The travel vertical’s search advertising continued from a strong first quarter with its second robust quarter

in a row . Travel search advertising spend grew 37 .8% YoY, compared to 22 .8% in Q1 . Impressions were also

up 61 .9% YoY, a significant increase in growth compared to Q1 (34 .3%) . A portion of this increase in spend

and impressions can be attributed to a growth in tablet and mobile search advertising efforts .

LOOK FORWARD

FACEBOOK RTB

Facebook recently announced plans for the introduction of real-time bidding (RTB) for advertising on its site .

This will allow for retargeting within the advertising Facebook inventory . This is a massive new inventory

source that will now be available to the market — possibly the biggest proprietary audience source . We feel

that this new advertising opportunity will quickly supplant all marketplace advertising within Facebook .

There are challenges with this new opportunity, however . The ad units are not standard IAB units and will force

advertisers to optimize for an additional creative . It is also yet to be proven if these Facebook ad sizes will

be successful for RTB . There is also disappointment that the data provided to advertisers does not include the

deep data owned by Facebook .

As a new opportunity, we estimate this will drive an incremental 12-15% in retargeting budgets and drive

display overall spends higher .

GOOGLE SHOPPING

Google has announced that its free product feed management service, Product Search, will soon transition

to a pure paid model, called Google Shopping, by Oct . 1st . This switch to a biddable media from what

was a rich source of qualified organic traffic for retailers, will drive an increase in budgets . As this will not

cannibalize current business, this represents a significant opportunity for Google .

For retail marketers, while adding cost, this change will allow for more control over product and

category listings .





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About IgnitionOne

IgnitionOne®, the global leader in digital marketing

solutions, enables companies to integrate and centralize

cross-channel marketing efforts within one platform,

allowing for deeper insights and greater digital success .

On behalf of our customers, IgnitionOne currently scores

over 300 million users in 53 countries to help optimize

media and website conversions using cross-channel

attribution modeling across search, mobile, display and

social . IgnitionOne’s solutions are powered by proprietary,

integrated technology: IgnitionOne’s Digital Marketing SuiteSM .

IgnitionOne powers more than $30 billion in revenue each year for leading brands, including General

Motors, Chico’s, Ann Taylor, La Quinta, Travel Guard and Fiat, as well as advertising agencies such as

MRM Worldwide and CyberAgent .

This is one in a series of reports from IgnitionOne, which have tracked more than 88 billion impressions and

more than 2 .1 billion clicks on Google and Yahoo!/Bing search networks, Google AdEx, and other display

networks from January 1, 2006 through June 15, 2012 .

Other reports can be found at http://ignitionone.com/en/about/research-white-papers.php

METHODOLOGY

For more information, please visit

www.ignitionone.com

or follow the company on Twitter

@IgnitionOne


http://ignitionone.com/en/about/research-white-papers.php


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Travel and mobile are q2 bright spots as search spending growth slows

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Transcript of Travel and mobile are q2 bright spots as search spending growth slows