Google’s Paid-Search Performance Metrics Improve in Q1

April 21, 2008

This article is included in these additional categories:

Paid Search | Retail & E-Commerce

Google accounted for 77% of total search spend in the first quarter of 2008, up 3.3 percentage points from 1Q07 in search spending share, according to the “Search Engine Performance Report: Q1 2008” by Efficient Frontier.

Compared with 1Q07, in 1Q08 Google registered gains in all of the metrics analyzed in the report:

  • Return on investment (ROI) on Google improved 24%.
  • Click-through rates (CTRs) improved 19%.
  • Cost per click (CPC) rates increased 11% in the period between.

Those result suggest that large-scale advertisers are benefiting from Google’s quality updates and can continue to afford its higher cost-per-clicks (CPCs), particularly given the increase in ROI, Efficient Frontier said.

Average CPCs on Google for non-financial services advertisers were up 11.2% in 1Q08 over 1Q07, while CPCs on Yahoo and MSN fell 5.8% and 7.0%, respectively, for their advertisers:


Among other findings:

  • Advertisers on Yahoo Search and MSN adCenter experienced year-over-year ROI improvements of 33% and 29% respectively – but no increases in CTR or CPC.
  • Yahoo captured 18% share of total search spending in 1Q08, losing 3.2 percentage points from 1Q07, and MSN its? 5% share of search spend.
  • Amid recessionary fears and the mortgage fallout, search advertisers in the travel, retail and automotive verticals increased their search budgets:
    • Travel search spending was up 23% in 1Q08 versus 1Q07.
    • Automotive and retail increased spending 10% and 6%, respectively.

About the data: Efficient Frontier analyzed nearly 18 billion impressions and more than 310 million clicks to determine how shifts in the search marketplaces affected overall spending and campaign effectiveness. The “Search Engine Performance Report: Q1 2008” was completed based on data from a fixed sample of Efficient Frontier’s US clients from 1Q07 through 1Q08 and includes data from large search engine advertisers across multiple verticals as well as findings on search engine spend, CTRs, CPC and ROI.

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