Marketers continue to allocate a significant percentage of their budgets to paid search advertising. The latest projections indicate that spending on this marketing format will reach $19.3 billion in 2011. But marketers also want to ensure that their spending yields a return so this year they are taking steps to increase click through rates (CTR) at a lower cost.

Marin recently released its analysis of the paid search market based on large advertisers that spend at least $1 million annually on this form of advertising. A few key trends are evident in 2011.

  • So far this year, marketers have increased their search spending by nearly 20%.
  • While 65.5% of U.S.-based searches are carried out via Google, the company has 83% of search spending and 82% of paid clicks. This means that the company “monetized its search much more effectively.”
  • There has been an 8% increase in CTRs but a 15% drop in impressions. Marin analysts note that marketers are doing a better job of keyword matching and bidding.

When it comes to matching search terms, it’s clear that marketers are having better yields. In analyzing last year’s clicks,  52% matched  to broad terms. This year, broad terms dropped to 42%. At the same time, exact word matching rose to 47% and phrase matching rose to 11% of  all clicks.

Here’s a snapshot of the cost per click by match type:

  • Broad $1.12
  • Phrase $1.18
  • Exact $0.68

Marketers are likely to continue using paid search as a very efficient form of advertising. As they employ strategies to bid on the best exact words, they can drive down costs and improve both ROI and sales.

[Sources: Paid Search – Quarterly Benchmarking Report. Marin Software. July 2011. Web. 20 Jul. 2011; Rangen, Brent. Sate of Search. SearchEngineWatch. Com. 15 Apr. 2011. Web. 20 Jul. 2011] ]