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Covario Global Search Spending Report: Inertia At Home, a Boom in Asia

Written on
Jul 5, 2012 
Author
Brian LaRue  |

ADOTAS – In its most recent quarterly report on global paid search spending, search marketing services and provider Covario revealed growth in the paid search market worldwide for the second quarter of 2012, especially in the Asia/Pacific region, where global marketing investment has fueled huge business growth — even if, overall, the growth in the search market wasn’t on par with the previous three quarters.

Paid search advertising across the board was up 17 percent last quarter, compared to the second quarter of 2011, and up 5 percent from the first quarter of 2012. That adds up to 19 percent growth throughout the year so far, which, in the report, Covario search analyst Charles Gaylord called “on target.” The report predicts 18-22 percent growth for pay-per-click in 2012, a figure unchanged from previous predictions. And yet, Covario saw less growth in paid search during Q2 than in the three quarters prior, and Gaylord concluded that “early signs indicate creeping CPC inflation for paid search globally.”

In North America, paid search spend was up 15 percent from Q2 2011 (a quarter Gaylord described as “relatively weak”) and 1 percent from the first quarter of 2012 (which Gaylord called “surprising,” which is to say, lower than expected). Europe and the Middle East had a particularly harsh 2011, and it’s taken time for the paid search market to rebound: This past quarter saw only a 2 percent uptick in paid search spending in the EMEA region, compared to Q2 2011, and only 1 percent growth since Q1 2012. Covario revised its predictions for the EMEA market for the rest of 2012, and now forecasts 9-12 percent growth in paid search for the whole year. The APAC region is booming, though: It saw 41 percent growth compared to Q2 2011 and 23 percent growth just from Q1 1012.

Google still dominates search around the world, nabbing 86 percent of the global market, 91 percent of all impressions and 68 percent of all clicks. Ad spend on Google was up 16 percent compared to Q2 2011 and 5 percent from Q1 2012. Yahoo/Bing, though, saw 30 percent year-over-year growth. And Chinese search engine Baidu saw 41 percent year-over-year growth and 25 percent growth from the previous quarter. Baidu netted 6 percent of all ad spend and 5 percent of all impressions, but accounted for a disproportionate 25 percent of all clicks.

Gaylord and Covario predict CPC competition will cause spending in search marketing to increase in the second half of 2012, picking up the slack for the first half. Meanwhile, the report is available on Covario’s website.

Quarterly Analysis Notes Increase in Keyword Pricing for the First Time since Q3 2011

SAN DIEGO, July 5, 2012 – Covario, Inc., one of the nation’s largest independent providers of search
marketing agency services and management solutions, today issued its latest Global Paid Search Spend
Analysis, which found that spending on online search advertising in the second quarter of 2012 by its
enterprise technology, consumer electronics, and retail clients was up about 17 percent over the same
period last year, and 5 percent above the first quarter of 2012.

Covario research analyst Charles Gaylord, who produces the quarterly analysis, called this “a healthy
growth rate, but still down compared to the sizeable amount of spending that has occurred over the last
three quarters.”

On a regional basis, the Americas, led by the U.S. and Canada, saw moderate spending growth in PPC
(pay-per-click) ad spending of 15 percent year-on-year and just 1 percent quarter-on-quarter.

In Europe, where paid search growth rates remained subdued at 2 percent year-on-year and 1 quarter-
on-quarter, Gaylord said online spending trends are still recovering from last year’s economic slowdown.
With macro-economic pressures continuing in the region, Covario has revised the forecast it provides to
brand marketers, suggesting that they now budget for 9-12 percent annual search spend growth versus
15-18 percent advised last fall.

The Asia Pacific region is where major opportunities for paid search investment continue to exist. Year-
on-year growth is at 41 percent, while quarter-on-quarter growth stood at 23 percent.

“The reason is continued investment by global marketers in the economies of China, Japan, India,
Australia, and New Zealand,” Gaylord said.

The quarterly report, which regularly includes a cost-per-click (CPC) analysis of the major search
engines, found that keyword pricing increased for the first time since the third quarter of 2011. Global
competition among search marketers for keywords drove CPCs up 6 percent since last quarter.

Looking ahead, Gaylord said year-to-date search spending is still tracking on target at 19 percent growth,

and he expects on change in Covario’s original forecast of 18-22 percent annualized growth for PPC
budgets globally in 2012.

This is the sixth year of Covario’s Global Paid Search Spend Analysis, which in total encompasses 22
quarters of data on the PPC spending patterns of the firm’s global search marketing clients. These
companies and brands invest in paid search advertising with all of the major search engines in more
than 45 countries worldwide.





Adotas Senior Editor Brian LaRue has been working in journalism in some form or another for slightly longer than his entire adult life, having won his first SPJ (Society of Professional Journalists) Award while he was still in high school. Prior to joining Adotas, he served as a reporter, editor, columnist, critic and blogger, mostly for a number of daily and weekly newspapers scattered around his native Connecticut. In his off hours, Brian maintains an active parallel life as a musician and music blogger.

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