Covario Study Finds Q3 Global Search Ad Spending Rebounds |
Forecast for Year Remains Strong Due to Demand in Asia-Pacific
SAN DIEGO, Oct. 12, 2011 -- Covario, Inc., the nation’s largest independent search marketing agency and software solutions provider, today issued its Global Search Advertising Spend Analysis for the third quarter, which found that paid search spending by technology and consumer electronics companies came roaring back from a lackluster second quarter.
The quarterly report found that global pay per click (PPC) advertising was up 26 percent from the previous quarter and 24 percent versus the same period last year. The rebound was attributed to strong “back to school” spending and by increased investment in the Asia-Pacific region.
In addition, cost per clicks (CPCs) – the average transaction costs for purchasing an advertisement on a search engine – continue to see 2 percent quarter on quarter price inflation due to increased competition on the search engine auctions.
Study author Craig Macdonald, senior vice president and chief marketing officer of Covario, remains bullish due to the robust growth in search marketing in the Asia-Pacific region. As a result, he believes that global paid search spending by the tech sector will grow by about 20 percent for 2011 – at the top of the beginning of the year forecast of 15-20 percent.
“Technology and consumer electronics advertisers are upping their budgets for Asia-Pacific and are now looking at search spend growth for the full year in APAC to be in the 40-plus range,” Macdonald said.
North America also had strong search spending growth in the third quarter, increasing 21 percent versus the second quarter and 7 percent compared to the same period of 2010. Europe was up as well – some 23 percent from the second quarter and 24 percent from the third quarter of last year.
“We do, however, see growth slowing in Europe,” Macdonald said. “Slower growth in southern Europe is indicating we’ll see overall budget growth for the year in EMEA in the 20-25 percent range, instead of the original forecast of 25-30 percent.”
Clearly, the major growth opportunities for global advertisers are in Asia-Pacific, where quarter on quarter growth was at 45 percent and year on year paid search spend was up more than 100 percent. Macdonald said that the region continues to benefit from increased PPC investment in Japan, China, India, Australia and New Zealand.
Additionally, the report indicated that 75 percent of Covario’s paid search technology clients recognize that paid media spending on the Facebook social media platform has become a key part of the annual budgeting process.
As global advertisers prepare their budgets for next year, the study offers several preliminary expectations:
“There is some trepidation about the impact of a potential global financial market slowdown and its impact on search,” Macdonald said. “Most of our customers believe this will have a muted impact on paid search. Search’s measurability and position at the bottom of the marketing buying funnel make it quite resilient to market gyrations. The impact tends to be on CPCs, which go down faster than decreases in growth rates on impression volume.”
The Covario Global Search Advertising Spend Analysis encompasses all of the major search engines and is based on paid search spending by the company’s high-tech and consumer electronics clients. This is the fifth year of the analysis, which spans the first quarter of 2007 through the third quarter of 2011. Covario clients represent about $400 million in annual paid search programs conducted on various search engine platforms in more than 45 countries. All of the data was compiled using the Covario Paid Search Insight™ software solution.
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