Temperatures are rising, and so are CPCs

Summer is here. Temperatures are rising, and so are CPCs, according to Covario’s quarterly paid search spend analysis. Spending on paid search advertising demonstrated 17% growth in the second quarter, and we are finally seeing the expected increases on keyword pricing that had begun cooling off in October last year.

The following chart shows how impressions, clicks and cost fared in the second quarter of 2012:


The year-over-year balance in impressions (7%), clicks (18%), and cost (17%) demonstrates a healthy increase in CTR (11%) and zero change in CPCs. However, the quarter-on-quarter trend for impressions (10%), clicks (-1%), and cost (5%) paints a somewhat different picture. The combination of a 10% decrease in CTR and a 6% increase in CPCs suggest that keyword pricing – and not volume – is largely responsible for the sequential growth.

In terms of how search activity was distributed across the major platforms globally, the following chart shows that Google continues to be the dominant figure, commanding 86% market share in spend, as well as 91% in impressions and 68% in clicks:

Advertiser increases in spending on Google were up 16% from a year ago and up 5% from the previous quarter. The Yahoo-Bing Alliance continues to benefit from the implementation of “broad match,” and showed spending growth in the neighborhood of 30% year-over-year and 3% quarter-on-quarter. The Alliance currently holds 7% market share in spend, as well as 3% in impressions and 5% in clicks. Baidu, which commands the majority of market share in China, grew its spend by 41% year-over-year and 25% quarter-on-quarter. Baidu accounts for roughly 6% of all spend, 5% of all impressions, and an incredible 25% of all clicks globally.

All of this information, as well as a regional breakdown of search activity and search engine market share, is available in our latest report. Download it today