Efficient Frontier What\'s Around The Corner Search Trends2

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As the largest search engine marketing firm, Efficient Frontier has access to tremendous amounts of search engine data. Join them for an overview of the most recent quarterly search engine performance report. Hear how the recession has affected consumer search trends and what we are likely to see in the future.

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Efficient Frontier What\'s Around The Corner Search Trends2

  1. 1. What’s around the corner? Trends in SEM Merinda Peppard European Marketing Manager Dr. Siddharth Shah Director of Business Analytics
  2. 2. Global Leader in SEM $750M+ annual spend managed Largest Search Agency in the UK (spend) 180 employees worldwide 275 clients globally / 51 in Europe 40 million active keywords managed Sunnyvale | NYC | London | Paris | Hamburg | India Japan & Australia : Licensing Partners Full Service or Technology Only 2
  3. 3. Today’s Agenda • What’s new? • How does online compare to other advertising? • Taking a look at Search • Efficient Frontier UK Search Report • Efficient Frontier U.S. Search Report • What does it mean for the UK? 3
  4. 4. What’s New? 4
  5. 5. Positive news 5
  6. 6. Interesting Trends 25-34 year olds £10 more per visit 6
  7. 7. 1 billion global visitors online 41 % Asia-Pacific Region 18% China 16.2% U.S. 6% Japan 3.7% Germany 3.6% UK *Comscore, January 23, 2009 Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
  8. 8. Which vertical spends the most? 23.8% Recruitment 13.5% Automotive 11.2% Technology 9.7% Property 7.6% Finance * IAB, PwC 2008 Online Adspend Report Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
  9. 9. How does online compare to other advertising? 9
  10. 10. 2008 internet up 17% to £3.3 billion 3.2% Television 5.4% 1.0% 11.7% 5.1% Press Display Internet 13.1% Press Classified Direct Mail Total advertising 21.9% Outdoor market £17.5bn Directories Radio 19.2% Cinema 19.5% * IAB, PwC 2008 Online Adspend Report Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
  11. 11. Taking a look at Search 11
  12. 12. 2008 paid search up 22.7% to £1.98 billion 0.3% Display Classifieds 19.0% Paid for search Solus Email 59.3% 21.4% * IAB, PwC 2008 Online Adspend Report Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC
  13. 13. Econsultancy search survey • Only 45 % said they were tracking paid search effectively • Only 30% use Microsoft Live Search • Only 44% use Yahoo 5% fewer advertisers than last year are using Yahoo for paid search 7% fewer agencies than last year are using Yahoo for their clients paid search
  14. 14. Efficient Frontier UK Search Report 14
  15. 15. Quarterly Reports • SE spend reports issued each quarter • Consistent basket of UK clients • Travel, retail, finance and other verticals 15
  16. 16. Google Maintains Dominance 16
  17. 17. Search Marketing Costs Drop • SEM is now much cheaper CPCs decline by 20-31% YoY • ROI is stable showing a 2% YoY increase • Spend is down for second consecutive quarter • Yahoo! is less efficient at driving ROI for advertisers may drive spend allocation to the other engines in coming quarters • Spending on Google Content is up 71% YoY 17
  18. 18. What does the future hold? 18
  19. 19. Continued trend... 17.1% 0.1% -4.4% -3.8% -7.0% -6.7% -6.3% -6.0% -17.3% Press Directories Press Radio Direct Mail TV Outdoor Cinema Internet Classified Display * IAB, PwC 2008 Online Adspend Report
  20. 20. What does it mean ....for Search? “Search advertising remains among the most measurable media available to advertisers, which we suspect with continue to allow search to outperform other media. Secondly, search advertising is what potential consumers tend to see in the final moments before purchase, making search marketing less discretionary than other forms of advertising. As a result of such characteristics, we believe search to be relatively well positioned heading into a recovery and we expect U.S. search advertising to increase 16% in 2010 and at a 13% CAGR for the next five years.” Credit Suisse, US advertising Outlook, Sept 09
  21. 21. Efficient Frontier U.S. Search Report 21
  22. 22. Insights from the US • Small shifts in spend trends QoQ • Bing has increased its Market Share both by spend and clicks • Increased ROI focus specially from small advertisers • Travel is hurting • Automotive has seen slight recent improvement • Finance has made a recovery 22
  23. 23. US Market: Spend and ROI 140% 129% 120% 111% 117% 100% 99% Indexed Q2 2008=100% 100% Monthly 80% 105% 102% 100% 60% 100% 96% 96% 82% 95% 100% 81% 40% 79% 90% Spend 20% 85% 100% 99% 94% Clicks 80% 0% 75% Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 70% Spend ROI June July August
  24. 24. Spend Trends by Advertiser Size 160% 140% Small Medium Large Indexed Q2 2008=100% 135% 120% 120% 120% 121% 108% 114% 100% 100% 97% 100% 96% 100% 96% 92% 88% 80% 79% 60% 100% 100% 100% 98% 105% 100% 99% 93% 40% 82% 80% 83% 80% 78% 72% 59% 20% 0% Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Spend ROI Small Adv. Med Adv. Large Adv. Small ROI Med ROI Large ROI • Small advertisers have drastically reduced spend to maintain ROI • Medium advertisers have kept their spend the same as they look to consolidate their position in the online marketplace • The large advertisers have reduced spend along the lines of current macro-economic conditions while gaining a higher ROI
  25. 25. US Market share by Spend 120.0% 100.0% 4.4% 4.5% 4.2% 3.8% 4.5% 19.6% 21.2% 21.5% 20.6% 20.5% 80.0% 60.0% 40.0% 76.0% 75.6% 75.0% 74.3% 74.3% 20.0% 0.0% Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Bing 4.4% 4.5% 4.2% 3.8% 4.5% Yahoo Search 19.6% 21.2% 21.5% 20.6% 20.5% Google Search 76.0% 74.3% 74.3% 75.6% 75.0% Microsoft gained both the click and the spend share in Q2 ‘09
  26. 26. US Market share by Clicks 120% 100% 23.82% 26.98% 25.47% 24.76% 24.29% 80% 4.38% 3.67% 4.10% 4.03% 3.62% 60% 40% 71.80% 68.99% 70.91% 71.57% 71.61% 20% 0% Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Yahoo Search 23.82% 26.98% 25.47% 24.76% 24.29% Bing 4.38% 4.03% 3.62% 3.67% 4.10% Google Search 71.80% 68.99% 70.91% 71.57% 71.61% Microsoft gained both the click and the spend share in Q2 ‘09
  27. 27. ROI Trends 160% 143% 135% 140% 124% Indexed Q2 2008=100% 120% 124% 120% 102% 103% 100% 98% 100% 100% 98% 91% 92% 100% 88% 80% 60% 40% 20% 0% Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Google Search Bing Yahoo Search • Google and Bing at operating at a higher ROI point than they were last year. Yahoo is 8% lower • If this trend continues, we expect advertisers to shift their advertising dollars away from Yahoo and towards Bing and Google
  28. 28. Bing: MarketShare Trends Spend Share 124% 130% 140% 104% 108% 120% 100% 100% 80% 60% Bing 40% 20% Launched 0% Apr-09 May-09 Jun-09 Jul-09 Aug-09 Click Share 120% 118% 117% 115% 110% 105% 105% 100% 100% 101% 95% 90% Apr-09 May-09 Jun-09 Jul-09 Aug-09 28
  29. 29. Bing: Sector Trends Bing: Spend Share 160% 140% 132% 133% 135% 131% 140% 119% 120% Indexed May 2009=100% 120% 110% 112% 100% 100% 100% 100% 80% 60% 40% 20% 0% May June July August May June July August May June July August Retail Travel Finance 29
  30. 30. US CPC Trends 104% 109% 120% 100% 98% 95% 94% 94% 82% 83% 85% 85% 79% 74% 79% 79% 80% 40% 110% 114% 107% 0% 100% 102% 96% 100% 94% 97% 94% 90% 87% 89% 91% 85% 80% Indexed Jun 2008=100% 40% 107% 107% 105% 0% 100% 96% 91% 90% 87% 92% 88% 85% 84% 84% 76% 78% 80% 40% 0% 100% 100% 78% 67% 80% 62% 63% 55% 58% 57% 59% 63% 52% 52% 50% 52% 40% 0% Apr-08 Jun-08 Jul-08 Sep-08 Oct-08 Dec-08 Feb-09 Mar-09 May-09 Jul-09 Aug-09 Finance Travel Automotive Retail 30
  31. 31. Correlation with the Stock Market Finance Vertical Spend and Stock Market 120% 102% 93% 100% 88% 95% 95% 90% 101% 85% 82% 76% 88% Indexed Sep 08=100% 80% 93% 86% 79% 79% 74% 75% 60% 56% 40% 20% 0% Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Finance SEM Spend S and P 500 31
  32. 32. How is September Looking ? September MoM Spend Change -13% Travel Weak Travel Sector and Seasonality Retail 6% Slight bump due to “Back to school” -13% Automotive End of Cash for Clunkers Finance 0% Flat -15% -10% -5% 0% 5% 10% 32
  33. 33. What does it mean for the UK? 33
  34. 34. Takeaways • Bing represents an under levered opportunity for advertisers • Advertisers will take a harder look at ROI and will increasingly optimize to harder metrics • Travel will continue to hurt while finance will be closely tied to the state of the financial markets 34
  35. 35. Efficient Frontier Q3 SE Report - published mid October Join our mailing list! Merinda Peppard European Marketing Manager Merinda.peppard@efrontier.com Blog: blog.efrontier.com Twitter: efrontier 35

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