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Efficient Frontier has just released a search engine ad share report for the 4th quarter of last year. They found that Google held onto its 76% market share while Yahoo actually gained 3%.

Here are additional trends they found:

  • Large vs. Small Advertisers: Small advertisers in the U.S. accounted for a greater decrease in search advertising spend than larger, more established brands. Advertisers spending less than $50,000 per month cut their spending by 23% year-over-year, with many of the cuts coming between the third and fourth quarter of last year. Companies that spent more than $200,000 per month only reduced spending by 9% over the same time period. These margins are typical during a recession when larger, more sophisticated brands aggressively utilize the search channel to drive revenue and sales while strengthening their position.
  • Overall Impression Trends: Overall impressions for search engines are down 6% year-over-year. From Q4 2007 to Q4 2008, Google experienced a 3% decrease, while Yahoo fell 13% impression volume. Microsoft Live garnered 21% more impressions in Q4 than in Q3 2008 and gained 18% more impressions year-over-year.
  • Click-Through Rate Trends: Overall click-through-rates in search were relatively flat year-over-year, gaining only 2%. While Microsoft Live Search had higher CTRs than all other search engines from Q1 to Q3 of 2008, it dipped below Google Search in Q4 2008. Google Search CTRs decreased by 2% year-over-year, while Yahoo CTRs improved 3% year-over-year. Google Content CTRs increased 150% year-over-year.
  • Cost-Per-Click Highlights: Overall search cost-per-click (CPC) is down 5% year-over-year. In the last quarter of 2008, Google Search’s CPC declined by 8%, while Microsoft Live Search declined by 3% and Yahoo Search declined by 1%. Microsoft Live Search has consistently maintained a higher CPC than all other search engines, indicating that advertisers are willing to pay a premium for a high quality, albeit smaller audience.

"Search engine marketing remains the most accountable sales and client acquisition channel on or offline,” said James Beriker, President and CEO of Efficient Frontier. “To continue to achieve stellar results, the current recession has made it even more critical for search marketers to know their metrics and manage campaigns based on actionable market, sales funnel and conversion data. The reason we work with more than 150 of the most sophisticated search marketers in 20 markets worldwide, and manage more spend than any other firm, is that we use math to automate the process of accurately modeling data and making the right overall strategy and keyword bidding decisions to deliver optimal performance, no matter the market dynamics.”

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