Search Spending to See a Strong Finish in 2012

Despite the popularity of mobile advertising and social media, search remains a giant in digital marketing. Earlier this year, Covario predicted that paid search would increase between 18–20% in 2012. The latest report from the firm indicates this projection will hold steady through year-end.

Historically, analysts consider several metrics when reviewing the health of the search advertising market. Year over year, the metrics in the Americas are all up:

  • Impressions 10%
  • Clicks 11%
  • Cost 15%

Based on consumer behavioral patterns, Covario analysts recommend that marketers allocate between 85–90% of their additional search spending to Google. The next largest portion should go to Yahoo-​Bing and the remaining amount can be spent on secondary search engines. On the national level, Google and Yahoo-​Bing control the market. However, analysts noted that secondary search engines are making inroads in the local search market.

Analysts remarked that advertisers will encounter Cost Per Click (CPC) inflation for the rest of 2012.  Currently, the cost per click by major platform breaks out as:

  • Baidu $0.19
  • Bing $1.32
  • Google $1.10
  • Yahoo $0.80
  • Yandex $0.61

Covario analysts say the rising cost of CPC is largely linked to the adjustments Google has made to its algorithms. But this change is not likely to deter marketers who are gearing up for the holiday season.

[Source: Gaylord, Charles. Paid Search Grows 17%. Covario​.com. July 2012. Web. 19 Jul. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.