Advertisers spent 20% more on paid search campaigns in Q2 2011 compared to a year-ago, while click through rates rose 12%, according to new research. But is spend really driving the popularity of the medium, or is it something else?
The Paid Search Quarterly Benchmarking Report from Marin Software also reveals an increase in efficiencies from search campaigns.
However, Google advertisers saw a dramatic decline in impressions with the average marketer experiencing a 15% drop, while click volumes rose by 8%. This suggests either search marketers took steps to improve efficiency or Google modified its algorithm for matching ads to queries, according to Marin Software.
So are advertisers getting better at paid search, or are search engines simply becoming smarter?
Gains in efficiency during the past year have been a result – in part – of advertiser efforts to refine match types. The share of paid clicks from exact- and phrase-match keywords rose 10% during the past year at the expense of broad-match clicks.
Exact and phrase keywords have higher click-through rates and lower costs than broad match terms, which not only explains the gains in efficiencies advertisers found during the quarter, but also improvements in quality scores.
In the past year, search marketers have increased their use of exact- and phrase-match keywords, growing click-share of these terms by 7% and 3%, respectively.
Aside from exact- and phrase-match keywords, spend on Yahoo! and Bing rose 52%, compared with the year-ago quarter as advertisers built out their campaigns on the combined platform.
Advertisers also experienced a boost in effectiveness on the Yahoo!-Bing platform, reflected by a 6% rise in CTRs.