Q309 Search Advertising Report: Crossing the Chasm

Posted by Richard Stokes on October 14, 2009 to AdWords, PPC, Research

Search Engine Advertiser Update – Q309
October 14, 2009

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Geoffrey Moore's classic book, “Crossing the Chasm,” spells out five stages in high-tech marketing. The first two stages are typical of new, emerging markets in which innovators and early adopters discover a new technology and begin to adapt it for commercial means.

As it breaks out of its niche, the technology becomes a product. Practical corporate types begin to catch on and leverage the new offering for incremental gains in their established businesses. This is known as the “Early Majority” stage.

In the “Late Majority” stage, growth decelerates, and new customers are hard to find. Great changes are afoot, and expectations have to be reset; the promise of limitless future growth must eventually be broken. Traditional marketing steps in with classical positioning strategies and redefines success not in percentage growth but in points of market share.

We are seeing all of these signs in the search marketing industry, especially in how the engines are now (voluntarily or not) differentiating themselves from one another. Google has become the premium supplier of high-volume search traffic. Despite having lower conversion rates on whole than either Yahoo! or Bing, it drives far higher volume and a very respectable ROI, making it an excellent choice for established brand advertisers.

Yahoo! offers a lower volume of less expensive clicks, but conversion rates tend to be higher on average, making it a worthwhile backup to Google.

Bing offers yet a third choice. Volume is lower overall than either Google or Yahoo! (with the exception of certain categories that Bing has chosen to focus on) yet conversion rates tend to surpass both Yahoo!’s and Google’s. This makes it an excellent choice for unbranded, direct response types of sites with lower budgets.

Classical marketing strategy suggests that this is a reasonable equilibrium point for a mature market. Google is unlikely...

Continued in full report...

Charts available in full report:
1. Monthly Change in First Page Advertisers
2. Share of Advertisers by Search Engine
3. Avg # Ads/Keyword (US & International)
4. Avg # Ads/Keyword (US only)
5. Average Ads Displayed Per Impression
6. Top 25 US Advertisers by Search Engine
7. Most Expensive Keywords by Search Engine

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