The latest reports on the shares of paid search engine marketing in the U.S have confirmed many people’s predictions from last year.
Data agency Efficient Frontier’s “State of Search Report” has revealed that, as expected, Google has continued to grow in its dominance of PPC revenues based on marketing spend and click-rate. Perhaps more significant though is the new information on Bing’s performance.
Bing, the Microsoft search engine, has long been tipped as the main contender for Google in search. Although current second-place engine Yahoo! has an established user base and market for search revenue, Bing’s aggressive expansion into market share has been seen as a sign that it will replace Yahoo – one of the oldest search engines still gaining significant market share in the US.
Efficient Frontier’s report seems to lend weight to these predictions. Bing’s share of PPC/CPI spend in search advertising has grown from 4.5% in Q1 2009 to 6.5% in Q1 2010. Although this is a small figure on the face of it, in relative terms it represents substantial growth. This growth is undoubtedly tied to its increased Click share; in Q1 2009, this was just 3.8%; a year later, it has grown to 5.5%.
Interestingly, Google’s position hasn’t been weakened by this growth. The ‘search engine giant’ still accounted for almost three quarters of all U.S search advertising spend in the first quarter of 2010, with a growth of 0.6% over the course of the year. Again, this seems fairly small based solely on the numbers – but for a company in a dominant position of 74.2%, to grow to 74.8% over a year still represents significant growth in relative terms.
It appears that Bing’s growth (and to a lesser extent, Google’s) has come at the expense of Yahoo. In Q1 2009, Yahoo! had a 21.3% share of spend and a 24.2% share of clicks. A year later, this has shrunk to 18.7% and 20.5% respectively.
Although Bing still has a long way to go to catch up, for the past year this trend of relative growth at Yahoo’s expense has been relatively unbroken. However, the future of both Yahoo and Bing is to some extent linked; an agreement between the two companies last July will link the two companies in a financial and service partnership, splitting revenue generated from traffic whilst Bing provides paid search services on Yahoo Sites.
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