UK search advertising spend increased in 2010 by nine percent, with the travel emerging as the fastest growing sector for search ads, according to new data.
The study, from performance marketing company, Efficient Frontier, shows Google remains the dominant player, with 91 percent of the UK’s share of search spend (the same as at the same time last year), and 88 percent of the click share (one percent down on last year).
The company’s Digital Marketing Performance Report for Q1 2011 alsi showed that return on investment (ROI) from paid search spend increased overall by six percent over the same time last year, but increased further in the travel sector, which saw an increase of 14 percent in ROI.
Clicks on travel sector paid search links were also significantly up on the same period last year, by 23 percent.
This indicates that the overall demand for online travel has increased and that the sector will see growth through 2011 as consumers’ intention to buy (rather than just research) holidays online has increased (as indicated by increased ROI).
Key findings of the report are:
Overview
• UK search advertising up by nine percent
• ROI up by six percent in the UK
• Google dominates, with 88 percent of clicks and 91 percent of spend in the UK (this compares with 79.6 percent share of spend in the US)
• UK search predicted to continue growth rates through 2011 of 10 percent
Travel sector particularly strong in the UK
• Travel sector search spend up by eight percent
• Travel sector clicks up by 23 percent
• Travel sector ROI up by 14 percent
Facebook demand increases internationally
• Advertiser demand for Facebook’s ad products is increasing significantly (40 per cent growth quarter on quarter cost-per-click growth in the US) and this is expected to be a key focus through 2011 for both the US and European markets.
Display ad exchanges expand internationally
• Display ad exchanges saw significant growth: Efficient Frontier’s advertisers are accessing more than 300 percent more inventory than a year ago at 30 percent lower cost per thousand (CPM). This means that display advertisers are gaining both reach and efficiency as new technologies like real-time bidding (RTB) become more prevalent
Bing-Yahoo! ROI increases in the US
• Google continues to have the majority of overall market share in SEM spend and clicks post the Bing-Yahoo! integration
• However, Bing’s ROI is currently higher than Google’s ROI. Bing’s ROI has increased 10 percent year on year, while Google’s ROI has decreased by 12 percent year on year
• While the revenue per click (RPC) on Bing is 12 percent lower than Google, the CPCs on Bing are also lower than the CPCs on Google, which is driving Bing’s higher ROI. As Bing expands its network, it is likely that the traffic quality will drop
Jonathan Beeston, European head of client services, Efficient Frontier, said: “Growth in search spend reflects advertiser confidence in consumers’ spending power. Growth in travel is particularly interesting and should be good news for the sector. Growth in ROI on travel budgets indicates that consumers are spending money on holidays for 2011. Facebook is potentially the strongest area for growth in 2011.”
Research Methodology
This analysis was completed based on data from Efficient Frontier search engine marketing customers and the resulting Efficient Frontier Customer Index. The Efficient Frontier Customer Index represents a subset of the company’s clients with spend data for six consecutive quarters or more, whose resulting SEM metrics are then normalized to average industry category contributions established by multiple third-party data providers. The Efficient Frontier Customer Index consists of a fixed sample of large-scale search engine advertisers across multiple sectors, including finance, travel, retail and automotive. The Efficient Frontier Customer Index sheds light on trends in search engine spending and performance on year-on-year and quarter-on-quarter basis.
The complete Digital Performance Marketing Report: Q1 2011 is available for download from the Efficient Frontier website at: http://news.efrontier.com/Global-Q12011-Report.html.
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