In most years, paid search spending drops in the first quarter after marketers wrap up their all-important fourth quarter. And this has been especially true in the high-tech and consumer electronics categories. But newly released data from Covario, based on spending patterns of its clients, paints a different picture for 2011.
Covario’s large clients include Adobe Systems and IBM. And these marketers, along with other Covario clients, spent 6.4% more on paid search in early 2011 than they did late last year. While most of the spending increases occurred in international markets, the domestic spending jumped 4%. According to Craig Macdonald, CMO and vice president for products at Covario, hot keywords and phrases include ‘cloud computing’ and ‘laptops’. The increase in spending may not be solely due to a recovering economy. Google made big changes to the search market with its introduction of Google Instant late last year. The change has caused more paid search results to appear in better positions than organic search results, which, in effect, forces marketers to pay more. Macdonald also notes that the rising expense of CPC is causing “compression of (cost per acquisition) rates."
The paid search market is also the focus of more researcher attention. A new syndicated report introduced by Kantar Media will now be providing a detailed analysis of the paid search market on a monthly basis. In the first release, the company noted that online paid search totaled $3.4 billion in the fourth quarter last year. During that time period, the top advertisers and their measured paid search spending were: Amazon ($50 million), AT&T ($27 million) and Capital One ($26 million).[Sources: Bannan, Karen. Tech marketers ramp up paid-search spending. BtoBOnline.com. 19 Apr. 2011. Web. 25 Apr. 2011; Quarterly Analysis of High-Tech Firms. Covario. 14 Apr. 2011. Web. 25 Apr. 2011; Kantar Media Launches Syndicated Reporting. Kantarmediana.com. 11 Apr. 2011. Web. 25 Apr. 2011]