Efficient Frontier Releases Q2 U.S. Search Engine Performance Report

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Efficient Frontier, the worldwide leader in providing Search Engine Marketing technology and services to leading advertisers and agencies, today released the U.S. Search Engine Performance Report: Q2 2008.

“This overall growth in the search channel, along with increased ROI across all the search engines, indicates a positive outlook for search advertising as marketing budgets become increasingly scrutinized”

Data from a fixed set of large scale search engine advertisers showed that Google gained more than its fair share of advertising dollars in the second quarter of 2008: for every new dollar spent on search advertising in Q2 2008 versus Q2 2007, Google received $1.10, while Yahoo! lost $0.09 and Microsoft Live Search lost $0.01. Google accounted for 77.4 percent of total search engine spending in Q2 2008, an increase of 2 percentage points over the previous year. Yahoo! lost nearly 2 percentage points of search engine share in that period, accounting for 17.8 percent of total spend, and Microsoft Live Search’s share remained relatively stable at 4.8 percent of search engine spending.

Other highlights from the report include:

Cost per click (CPC) rates increased by 13.8 percent for Google in Q2 2008 versus a year ago, while average CPCs on Microsoft Live Search increased at a slower rate of 5.6 percent, and Yahoo! CPCs declined by 7.3 percent.
Return on Investment (ROI) improved on all three search engines, with Microsoft Live Search improving 25% YOY, while ROI on Yahoo! Search increased by 13%, and Google’s ROI increased by 3%.
Automotive advertisers increased search advertising spending by 24 percent in Q2 2008 versus Q2 2007, but retailers increased search spending by a cautious 1 percent. Financial services advertisers, hit hard by the mortgage crisis, decreased search engine spending by 7 percent YOY, and travel advertisers decreased spend by 17 percent as consumers pulled back on leisure spending.
The global outlook for Google’s growth is very positive, with the search giant capturing 75% or more of search engine spending in Q2 2008 in the global markets in which Efficient Frontier operates, with the exception of Japan and China. In Q2 2008, for the first time Google captured a majority share of search engine spend in Japan, with 56% of search spending in that market.

"This overall growth in the search channel, along with increased ROI across all the search engines, indicates a positive outlook for search advertising as marketing budgets become increasingly scrutinized," said James Beriker, President and CEO of Efficient Frontier. "In a potentially volatile economy, it becomes even more important for advertisers to work with an SEM partner that has proven technology and a services organization focused on maximizing ROI and driving growth in the search channel."

Efficient Frontier analyzed 23 billion impressions and more than 390 million clicks to determine how shifts in the search engine marketplaces impacted overall spending and campaign effectiveness. The Search Engine Performance Report: Q2 2008 was completed based on data from a fixed sample of Efficient Frontier's U.S. clients from Q2 2007 through Q2 2008, and includes data from large search engine advertisers across multiple verticals as well as findings on search engine spend, click-through rates, CPCs and ROI.

To download a copy of Efficient Frontier's Search Engine Performance Report: Q2 2008, please visit http://www.efrontier.com/efficient-frontier/resources/research/ getResearchQ208.html. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

About Efficient Frontier

Efficient Frontier is the market and technology leader in providing Search Engine Marketing (SEM) solutions for leading global advertisers and agencies. Founded in 2002, Efficient Frontier pioneered the application of modern portfolio theory to SEM and today combines its core algorithms and bidding technology with comprehensive strategic and tactical services to manage more than $500MM in global search spend. The largest and most sophisticated advertisers and agencies partner with Efficient Frontier to achieve and sustain optimal return on investment and ongoing campaign growth and efficiencies in highly competitive and volatile search marketplaces. The company has 200 employees and is headquartered in Mountain View, CA with offices in New York, the United Kingdom, France, Germany, Hong Kong and India, and licensing partnerships in Japan and Australia. Efficient Frontier is a privately held company with funding from Redpoint Ventures and Cambrian Ventures. For more information, please visit www.efrontier.com and subscribe to the Efficient Frontier blog at http://blog.efrontier.com/.