On the Upswing
It’s too early to call a definite trend, but indications are that prices for both search and display ads may have bottomed out and be on a gradual rise, possibly adding cost pressures to marketers’ Web budgets.
Search marketing firm Efficient Frontier tracks a market basket of clients who have been in the search market for at least six consecutive quarters. The agency’s Q2 2009 U.S. Search Engine Market Report found that while average costs per click (CPC) for all three major search engines were down from the same quarter last year, they were up slightly compared to Q1 2009: for Google, up one percentage point (to 82% of prices a year ago); up two percentage points at Yahoo (to 85% of Q2 2008); and for Bing, Microsoft’s newly launched engine, up six points to 89% of the CPCs on Microsoft Live at this time last year.
“The moderate QOQ growth is a positive sign for the returning demand,” the report states. CPCs also ticked upward during the quarter for some of the verticals that have taken the worst financial poundings in the past year, indicating a growing demand for keywords. Retail CPCs rose four percentage points in Q2 2009 to 84% of their level a year ago, while clicks on finance terms posted a strong 11-point gain to 83% of year-ago CPCs.
Automotive keywords have not in fact dipped below the Q2 2008 index and peaked at 119% at the end of last year. They dipped from that high in the first quarter to only 111%, but gained back some of that loss in Q2 to reach 115% of year-ago prices.
But travel-related terms continued a slide that began in Q3 2008 and dropped five percentage points in the quarter to 78% of last year’s level.
Online display ads are also showing selective strength, indicating renewed interest by marketers, according to a September report by Adify, which manages more than 200 ad networks in 13 industry verticals (although not the largest portals, search engines or independent sites).
The report found that costs per thousand (CPM) on real estate sites doubled between fourth quarter 2008 and Q2 2009, to an average of $6.49. Ads on sports and entertainment sites posted lesser quarterly gains of about 20%. Technology, automotive and travel ads showed slight growth from the contraction they encountered in Q1 2009, while ads on news sites showed 20% CPM growth over Q4 2008 but fell back slightly from their high in the first quarter of this year, when the Obama inauguration drove heavy interest in those sites.
