Covario Study Reveals Bing Doubles US Market Share in Paid Search Advertising – Taking Share from Google

Search Platform gains traction while search spending increases at faster than expected rate – 16% over Q3 levels globally

San Diego CA – January 7, 2010 — Covario, Inc., the leader in software and services for paid and organic search management, announced today the release of the 2009 year-end edition of its Global Search Spending Analysis series. For the second straight quarter, paid search advertising in the high-tech and consumer electronics sectors grew by double digits. In fact, growth between Q3 and Q4 was a very robust 16%, far beyond previous expectations. This was due in large part to a growing demand for ad space by consumer electronic companies during the holiday season. The report also showed that the individual consumer marketing programs being executed in the US by Yahoo and Microsoft are delivering results. Bing more than doubled its US market share from Q3, and has quintupled its market share in the US over the course of the year. Yahoo made gains in market share in the US as well. And in Q4, this growth came at the expense of Google, which recorded its lowest market share in the US in the 3 years of the study — 72%. 
Report highlights include:

• Paid search advertising spend was up 16.6% between Q3 and Q4 of 2009. This is a significant increase — far beyond Covario's projected 10% increase. Advertisers are reinvesting in paid search advertising after pulling back on their spend during the first half of the year. Spending is expected to increase by 14-18% in 2010.

• The Q3’09 announcement of the Bing/Yahoo deal, coupled with large marketing programs by both search platforms, is paying dividends. Bing more than doubled its US market share in Q4, now at 13.3% of all spending in the quarter. Google growth has slowed in the US — and it has the lowest US market share in 3 years — 72%. However, Google continues to dominate foreign markets, particularly EMEA where it recorded a 97% market share in the high tech sector.

• With the large increases in spending, cost per click (CPCs) increased as expected — by nearly 15% in the quarter. CPC increases are expected in 2010 as additional spending is allocated to higher cost keywords.

"The growth rates seen in Q4 were surprising. In the first half of 2009, there was a 12-15% contraction in paid search advertising spend across the high-tech sector, and we expected a rebound in the 5-10% range in the second half of the year. In actuality, advertisers increased their spending by more than 30%,” said Craig Macdonald, SVP of Products and CMO for Covario. “The high-tech sector is now spending about 12% more than they were a year ago on paid search advertising globally.”
The big news of the year was the launch of Bing by Microsoft, and the Yahoo-Bing technology deal, which was announced in August and appears to be working for the search platform. Large scale consumer advertising programs by Yahoo and Bing have kept Yahoo’s market share stable for the past 2 quarters, and more than quintupled Bing’s market share since its launch. “Advertisers have been looking to expand their reach and inventory beyond Google, and Bing appears to be convincing them that it has a potential alternative – at least in the US and Canada. Outside of the US, it is still all about Google. No one has made a dent in their market share in EMEA.”

The Covario Global Paid Search Spend Analysis is based on paid search spending from US-based high tech and consumer electronics customers, and spans Q1, 2007 through Q4, 2009. The combined paid search advertising spending of the analyzed brands represents more than $250 million annually. All data is measured using Covario’s Paid Search Insight technology, which has been deployed with 20 different Fortune 500 firms, mostly in the high-tech and consumer electronics sector in the US, Canada and Europe.