AdGooroo Q308 search marketing research report now available

Posted by Richard Stokes on October 9, 2008 to

Search Engine Advertiser Update – Q308
October 9, 2008

Download PDF (7 pages)

We start this quarter's report off with the good news: Microsoft has come back in a big way. During Q3, we measured a 19.3% increase in active first page advertisers, the biggest quarterly increase since we began measuring advertising activity in April 2007. In just one year, Live Search has grown their active advertiser base by almost 32%, putting them in the strongest position since their inception. That they've been able to retain advertisers in the face of an uncertain economic environment is a sign of both excellent customer service as well as positive return on investment.

However, Google appears to have had a mixed quarter. We recorded a 3% increase in active advertisers, which would've been good news were it not for Sergey Brin's statement that Google has been “too aggressive in reducing coverage this past quarter [Q2] ”. While it appears that the company was taking steps to increase coverage (at least through July), ad coverage dropped to its lowest levels in August and September, suggesting that August and September may have been weak months.

We venture to speculate that May's rollout of the new AutoMatch algorithm has not made up for the attrition of small advertisers. This is further supported by the fact that Google launched a new algorithm change in mid-September, one which promises to undo some of the aggressive quality control measures which have purged advertisers (and spends) since July 2007. The same algorithm may also be aimed at reducing low-priced inventory, a move which strongly favors big-budget advertisers (see “Google bets on brand-name advertisers” below).

Finally, Yahoo appears to be staying the course while it waits for the US government to approve its ad-sharing deal with Google. We measured a 2.5% decrease in active first-page advertisers, but there were no significant changes in other metrics.

Continued in full report...

Charts:
1. Average Ads Shown vs. # of Searches
2. Monthly Growth in Advertiser Count
3. Relative Advertiser Count vs. 12 Months Ago
4. Share of Advertisers by Search Engine
4. Avg # Ads/Keyword (US & International)
5. Avg # Ads/Keyword (US only)

Download PDF (7 pages) (free registration required)