Slight Decrease in Paid Search Spending in Q1 ’09 and Major Change in Allocation
Fifth installment in Covario’s analysis series shows –1.4% decrease in spending from Q4 2008; Google impacted but cutbacks with Yahoo and MSN showing gains
SAN DIEGO — April 2, 2009 — Covario, Inc., the leader in interactive marketing analytics, today announced the release of the Q1 2009 edition of its Global Search Spending Analysis series. Paid search spending contracted slightly, -1.4%, from Q4 2008, and is down from the same period last year when paid search advertising spending grew 2.4% from Q4’07 to Q1’08. This analysis is based on paid search spending of twelve (12) of Covario’s US-based high tech and consumer electronics customers, and spans Q1 2007 (Q1 ’07) to Q1 2009 (Q1 ’09). The combined paid search advertising spending of the analyzed brands represents more than $250 million annually.
“This is the first decrease in quarter-on-quarter spending we have seen,” said Craig Macdonald, CMO and senior vice president of products at Covario. “The spending pull back was the result of a 15.9% contraction in spending in EMEA — where most of our advertiser clients pulled back on their programs to a significant degree.”
* Growth in paid search spending for Covario customers contracted slightly, -1.4% in Q1’09 (compared to Q4’08). This is down from the same period last year when paid search advertising spending grew 2.4% from Q4’07 to Q1’08.
* The reduction in spend was localized to EMEA, where spending contracted by 15.9% from Q4’08. Spending in the Americas was up slightly, 0.8%, and in APAC spending was up 7.4%.
* Google has been most impacted by the cutback in EMEA due to their 95%+ market share in the region. For the first time, we saw a 6% decline in the growth rate on Google spending — again, largely due to the cutbacks in EMEA. Yahoo and MSN both posted big gains in spending and in share.
* CPCs rates continue to fall, as spending on paid search programs remains in flux.
“In Q1’09 the budgets have been delivered and are flat to down from last year,” noted Macdonald. “We believe the discipline of driving ROI-based metrics is returning, and the ramification is that marketers have to do the hard work of optimizing beyond just Google. We expect the trend toward grabbing inventory on the secondary search engines will continue in 2009.”
Covario’s Global Search Spend Analysis series leverage the advanced analytics of Covario™ Paid Search Insight, which gathers and analyzes paid search advertising data for more than two dozen of the world’s largest advertisers to determine global spending trends and performance. To download a copy of this or previous analyses, please register here.
About Covario, Inc.
Covario, Inc. is the leader in Interactive Marketing Analytics (IMA) software. The Covario portfolio provides global organizations with robust interactive and search marketing analytics solutions for display advertising, paid search advertising and organic search engine optimization across the enterprise and throughout the channel. Covario enables complex and distributed organizations to control brand integrity, ensure budget transparency and deliver quantifiable results across business units, distribution channels and languages. Headquartered in San Diego, Covario’s growing customer list include some of the world’s best known brands in high tech manufacturing, financial services, electronics, media and publishing and consumer packaged goods.