Search Engine Marketing Costs Drop; Engine CPCs Drop 20-31% Year-on-Year as Advertisers Seek Efficiency

LONDON -

- Data Based on Efficient Frontier’s Q2 2009 UK Search Engine Performance Report

- FAO Online Editors

Efficient Frontier, the worldwide market and technology leader in providing search engine marketing (SEM) solutions for large advertisers saw cost per clicks (CPCs) fall dramatically year on year (YoY), allowing advertisers to capture more volume at lower cost. This analysis was completed based on data from Efficient Frontier’s Customer Index, which represents a subset of Efficient Frontier clients who have spend data for six consecutive quarters or more. It covers over 6.5 billion impressions and 99 million clicks.

CPCs across the engines decreased by 20-31% YoY; with the biggest fall being from Google with 31%, followed by Bing and Yahoo! with 30% and 20% respectively. Efficient Frontier advertisers capitalised on this price reduction and achieved more click volume while maintaining the return on investment levels of prior quarters. Return on investment (ROI) for advertisers remained stable with a 2% improvement YoY. Advertisers were still able to grow campaigns at a profitable return as dynamic search marketplaces adjusted to lower cost tolerances and less competition.

“We are seeing advertisers make their search marketing budgets work harder than ever before,” said Jonathan Beeston, Client Services Director for Europe. “Paid search is very closely tied to the state of the economy due to its immediate nature and as the whole marketplace deflates, search engine marketing is becoming cheaper. This is a great time for smart advertisers to take advantage of the opportunity and gain ground on their competitors.”

In addition, Search Engine Marketing spend for the sample fell by 11% when compared to the same period last year. The biggest drop came in the month of April, indicating advertisers revised Search Engine Marketing budgets for the quarter adjusting to more conservative forecasts for the new financial year. The data does provide a glimmer of hope for recovery in that advertisers, after the initial drop in April, increased month on month spending in May and June.

For more information: Website: www.efrontier.com Blog: blog.efrontier.com Twitter: twitter.com/efrontier

Source: Efficient Frontier

For more information: Merinda Peppard, European Marketing Manager, Efficient Frontier, +44(0)2071665220