Recovery in Europe Contributes to Q2 Boost; Mobile Search Continues to Soar
SAN DIEGO, July 10, 2013 – Covario, Inc., the world’s leading independent search marketing agency, today issued its Global Paid Search Spend Analysis for the second quarter of 2013, reporting that spending on Pay-per-Click advertising (PPC) by its enterprise technology, consumer electronics, and retail clients rose 22 percent from the first quarter of the year and 23 percent compared to the second quarter of 2012.
Paid search advertising on mobile devices, particularly smartphones and tablets, continued to accelerate rapidly with PPC spending up 39 percent from last quarter, along with a triple-digit 132 percent increase year-over-year.
As for global keyword pricing, Cost-per-Click (CPC) prices rose 10 percent during the quarter, which the report’s author, Alex Funk, director of global paid media strategy at Covario, believes was driven by a series of market developments and search engine platform changes.
“CPC inflation was driven by a rush of competition in CE and tech industry spending in the second quarter,” Funk said. “There have also been several platform changes over the past three quarters, including Google’s Product Listing Ads and the new Enhanced Campaigns, but it’s too early to tell if the latter has really affected CPCs yet since much of the market is taking a wait-and-see attitude.”
On a regional basis, the Americas, led by the U.S. and Canada, saw an 8 percent quarter-on-quarter search spending growth and 17 percent growth year-over-year. For the remainder of 2013, Funk continues to recommend that advertisers budget for an 18-20 percent increase in PPC spending across the region, allocating 83 percent to ads on Google and 15 percent to the Yahoo-Bing network.
EMEA (Europe, Middle East and Africa) continued its 2013 search spend rebound, contributing significantly to the overall global increase for the quarter. After several quarters of anemic, single-digit growth in 2012, the region realized 43 percent paid search growth in the second quarter compared to the first quarter, along with a 73 percent quarterly increase from the second quarter of last year.
“While Google dominates in EMEA, the largest growth in the region has been with Yandex in Russia and Eastern European countries,” said Funk, noting that the Yandex search engine now represents 6 percent of total EMEA paid search media budgets.
For 2013, Funk advises marketers to increase their Euro zone search spending by 10 percent. He recommends allocating 95 percent of the paid search spend to Google, except in Eastern Europe where Yandex should dominate budgets.
Quarterly search spending in APAC (the Asia/Pacific region) grew by 55 percent over a relatively soft first quarter, but still declined 1 percent year-on-year. The region continued to experience large increases compared to last quarter in impressions and click volume of 71 and 31 percent, respectively. CPC prices were up 18 percent quarter-on-quarter and 31 percent year-on-year.
In his analysis, Funk reported that the Chinese search engine Baidu gained 34 percent click volume over the previous quarter. He said this was driven by advertisers raising their budgets on average by 71 percent in the region.
“We expect sustained paid search growth in APAC through the second half of the year with consumer product interest peaking as it usually does in the fourth quarter,” Funk said.
Among the major search engines globally, Google continues to command more than 86 percent of the paid search market share. Advertiser increases in second quarter spending with Google were up 13 percent from the same period a year ago.
The Yahoo-Bing Network, which holds 6 percent of the global paid search spend market share, saw year-over-year quarterly spending up 23 percent, along with a more modest 7 percent gain from the first quarter.
Baidu, which dominates the Chinese market with share estimates as high as 80 percent, saw media spend on its platform grow by 22 percent year-over-year and 70 percent quarter-on-quarter. Globally, Baidu accounted for about 7 percent of PPC spending, 11 percent of impressions, and 27 percent of all clicks.
As a category, mobile search grew to represent 16 percent of all global paid search advertising by the end of the second quarter. The breakdown of mobile search ads by device changed slightly from last quarter to 40 percent for smartphones and 60 percent for tablets.
“Mobile advertising continues to be a topic at the forefront of the search marketing industry,” Funk said.
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About Covario and the Global Paid Search Spend Analysis
Covario is the world’s leading independent search marketing agency. This is the seventh year the firm has produced the Global Paid Search Spend Analysis, which now encompasses 26 quarters of data on the PPC spending patterns of its global technology, consumer electronics, and retail search marketing clients. These companies invest in paid search advertising with all of the major search engines in more than 45 countries.
Covario was selected by OMMA as the 2012 and 2011 Search Agency of the Year. The firm is also the parent company of Rio SEO, the leader in SEO automation, local search, and social media marketing technologies. Headquartered in San Diego, Covario has more than 250 global team members, who are also located in Beijing, Chicago, London, New York, Phoenix, San Francisco, Sao Paulo, Seattle, Singapore, Tokyo, and Toronto. Covario’s growing client base includes world leaders in technology, consumer electronics, retail, ecommerce, financial services, media, entertainment, publishing, and consumer packaged goods. More information is available at http://www.covario.com.