With the year over, it is time to update the analysis of the key trends across the globe in paid search advertising, and update advertisers on Q4‘10 performance.
- Q4’10 spending was up 8% over Q3‘10. However, growth was up a whopping 45% in APAC and 31% in EMEA, but only a tad over 1% in the Americas.
- On a full year basis, growth in 2010 for paid search globally was up 26% over 2009 spending. This was stronger than expected at the beginning of the year, when we predicted 14-18% growth. Q3‘10 was a surprise, with VERY strong growth. Year-over-year growth in the Americas was 23%; in EMEA it was up more than 22%, with APAC up 53%.
As expected, Google continues to dominate with global market share of 78%. Google’s paid search growth for 2010 was up 18% globally from 2009, while Yahoo was up 34% and Bing was up 84% over last year. Of special note is Baidu of China, which had growth of 211% over 2009.
There were three key growth drivers for paid search spending in 2010.
- Google Instant is having a positive impact on growth for Google, which is benefiting from a larger proportion of all clicks being transferred from natural search to paid search as a result of the mechanics of the system.
- For Baidu, Google’s repositioning of its system in Q1‘10 caused a major shift in the market share in the China market. For Covario clients in China, Baidu now enjoys more than 80% of all paid search spending in that massive, fast-growing market – and it does not seem like this is going to change anytime soon.
- Bing-Yahoo completed its integration in the U.S., and this has driven increased spending on the combined platform overall.
All of this information is available in our latest report – Covario’s 2010 Global Paid Search Spend Analysis. Now available on our website.
With the close of 2010 and a review of key trends looking forward in the New Year, there are some critical planning and budgeting assumptions advertisers should take into account for 2011.
Actionable Insight 1:
Paid search spending in 2010 was up nearly 27% from 2009. We recommend that advertisers plan for budget increases of 15-20% in 2011 for paid search — 10-14% in the Americas, 25-30% in EMEA, and 30-35% in APAC.
Actionable Insight 2:
Advertisers MUST plan on allocating budget to Facebook as part of their digital advertising media mix in 2011. We recommend allocating 10-20% of the global paid search budget to Facebook. The incremental spend for Facebook should come from the display budget, reducing it by a proportional amount; the paid search budget outside of Facebook spending should remain intact.
Actionable Insight 3:
Google ended the year with 78% of the global paid search market share. We predict that in 2011 Google’s market share will contract slightly (76-78%), due to limitations on international growth. Baidu will expand its market share above 80% in China. Bing-Yahoo will command 15-17% of global market share.