If you’re looking for quick, hard-and-fast guidance regarding your paid search budget in 2011, how about this: increase it by 15-20 percent. That recommendation comes from Covario, a search marketing firm.
The company recently released its Global Paid Search Spend Analysis for the fourth quarter of 2010. The report notes that global paid search spending in 2010 was up a bigger-than-expected 26.6 percent from 2009. Year-over-year growth was 23 percent in the Americas, 22 percent in Europe, the Middle East and Africa (EMEA), and 53 percent in Asia Pacific and Japan (APAC).
For the fourth quarter alone, global spending increased 8 percent from the previous quarter.
“We recommend that our clients budget for a global increase of 15-20% for 2011 over 2010 budgets,” Covario recommends. “This increase, on average, is necessary to maintain market share in the global high-tech and consumer electronics sector.”
More specifically, Covario recommends that budgets increase 10-14 percent in the Americas, 25-30 percent in EMEA, and 30-35 percent in APAC.
In the Americas, budgets should have 70-75 percent allocated to Google, “in order to account for the need to overcome systematic shifts in traffic to paid search from Google Instant. The other 25-30% should go to Bing-Yahoo. Secondary engines will account for <1% of spend overall.”
In 2010, advertisers increased their paid search advertising spending on Google by 18 percent from their 2009 levels. Spending on Yahoo rose 37 percent, while spending on Bing rose 84 percent.
Google finished 2010 with 78.2 percent of the global paid search market, down from its 79.3 percent share at the end of 2009. Covario attributes this to Baidu’s control of the Chinese search market, the already-high market share in EMEA, and the limited opportunities for growth in the Americas in the realms of mobile and local search, as well as social media.
Yahoo finished 2010 with 11.8 percent of the global market, followed by Baidu with 5.8 percent and Bing with 4.3 percent.
Covario suggests that advertisers plan for Google to have 76-78 percent of the market in 2011, while Bing-Yahoo will have 15-17 percent and Baidu will have 6-7 percent. “Global advertisers should plan for this allocation in 2011,” according to the report.
The company also suggests that advertisers allocate 10-20 percent of their total global paid search advertising budgets for Facebook in 2011.
Regarding cost per click, Covario recommends that advertisers expect CPCs in the $0.75-0.80 range. The company expects that CPCs will decline in the second half of the year.
Sources:
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=142515
http://actionableinsights.covario.com/1964/paid-search-spending-ends-2010-with-strong-growth-in-apac-and-emea/
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