Ads/Query are down – recession? better targeting?
From Comscore and TechCrunch:
Comscore has a fascinating post today talking about the relative decline in paid search ad clicks when compared to search query volume in the U.S. Search queries are up 68% in the last year, but paid clicks are up only 18% in the same period.
Comscore says the reason for the decline is that there are less search queries that show ads, and proposes that a reason for less ads is that searches are getting longer, up from an average of 2.8 words per query a year ago to just over 3 today. Comscore says: “And this apparently reduces the likelihood that an advertiser has bid to have his/her ad included in the results page from these longer queries, due to paid search advertising strategies that limit ad coverage, such as Exact Match, Negative Match, and bid management software campaign optimization.”
Mike on the other hand thinks that there just aren’t as many advertisers because of the recessions and business closings etc.
Other interesting titbits:
CTRs are up for the search ads
From Efficient Frontier report on search engines in Q1 2009:
“Search engine spending was down overall by 13% YOY and 3.3% Q/Q. The relationship between spending and ROI trends shows that advertisers continue to adjust their budgets to compensate for the economic downturn and to improve ROI. Monthly spend trends indicate that the additional decline in search engine spending in Q1 2009 was directly linked to the decline in ROI between November 2008 and January 2009. As ROI continued to decline, advertisers continued to cut their budgets in an effort to become more efficient.”
and
“CPCs are down across the board by 19% YOY and 13% Q/Q indicating that the entire marketplace is deflating as advertisers cut budgets and spend less. On a Q/Q basis, CPCs have declined by 14% on Google Search, 7% on Google Content, 28% on Microsoft Live Search, and 16% on Yahoo Search in Q1 2009 over Q4 2008.”
Given that the CPC rates are down about the same as search engine spending, I tend to agree more with the Comscore analysis. What do you think?
