Strong 4th Quarter Search Spending Expected

Paid search spending typically rises every year in the 4th quarter as marketers seek to connect with holiday shoppers. This year should be no exception. With search accounting for nearly 50% of all digital ad spending, or a projected $19.76 billion in 2013, socialnetworkuserit’s worth looking at what’s happening in the format as the year draws to a close.

The paid search market has consistently been shared between Google and Yahoo/​Bing with about 77.4% and 22.6% of the revenue, respectively. Google continues to do well and recorded an 18% increase in paid search in the last quarter. RKG, which reports on clients which use paid search, notes that the transition to Enhanced Campaigns, Google’s new ad buying system to improve mobile metrics, has driven down CPC. In addition, about 1/​3 of Google’s paid search revenue is now coming from mobile device traffic. Yahoo/​Bing is attracting more ad money and had a 30% growth rate, higher than Google’s in the last quarter. In addition, 45% of the Yahoo/​Bing click revenue is coming from non-​brand campaigns. Analysts attribute the improvement to broad ad matching techniques that Yahoo/​Bing has deployed.

Among RKG clients, paid search spending for smartphones dropped in the most recent quarter as advertisers focused instead on tablets. Analysts say this is because of a poor ROI on mobile phones in comparison to desktop and tablet search spending.

It will be interesting to see if advertisers continue to shift their mobile paid search budgets into tablets as we move into the heavy spending for the holiday shopping season. If they do, this may have analysts adjusting their projections for smartphone search budgets in the future.

[Sources: Positive Quarter Ahead for Digital Ads. Ignitionone​.com. 25 Sep. 2013. Web. 25 Oct. 2013; RKG Digital Marketing Report. Rimmkaufman. Oct. 2013. Web. 25 Oct. 2013] 
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.