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Google Dominates Global Paid Search as 2011 Holiday Online Shopping Sets New Records

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comScore reports significant YoY increases in online holiday shopping revenue, with a new record of $37.2 billion in retail e-commerce spend over November and December. In addition, paid search budgets increased 31 percent over 2010, while click costs, click-through rates (CTRs), and mobile shopping all showed strong growth, according to Kenshoo.

Google showed the strongest YoY growth in global paid search market share, though Baidu’s phenomenal growth eroded Google’s piece of the pie in the Asia-Pacific region, reports Covario. The Bing-Yahoo alliance dropped off significantly, down 1 percent from the previous quarter and 18 percent from Q4 2010.

Both U.S. and Global Paid Search Spend Increased Dramatically

“The 2011 holiday shopping season in the U.S. was a true battle for retailers with search advertising competition reaching new heights and budgets up 31 percent over last year,” said Aaron Goldman, chief marketing officer at Kenshoo, in a written statement. “Overall return on ad spend was $5.57 for U.S. retailers managing search campaigns through Kenshoo during the holiday season. In other words, for every dollar spent on paid search, advertisers got $5.57 back in online sales revenue.”

Covario found that PPC advertising gains in the high-tech and consumer electronics sector, in particular, helped drive a fourth quarter total global search spend increase of 21 percent over the same period in 2010, up 7 percent over the third quarter. Overall, annual paid search spend rose 21 percent in 2011, slightly above their expectations.

E-Commerce Gaining Holiday Retail Market Share from Brick-and-Mortar Stores

Ten individual shopping days surpassed the $1 billion mark for online retail spend, led by a $1.25 billion Cyber Monday. “With brick-and-mortar holiday retail estimated to have grown about 4 percent this year, it’s clear that e-commerce continues to gain market share from traditional retail due to the attractiveness of the Internet’s convenience and lower prices,” reported comScore chairman Gian Fulgoni. “Consumers were especially attracted to the deals and discounts available through digital channels – particularly free shipping, which occurred on well over half of transactions this season.”

Last-minute shoppers still purchased online the week before Christmas, while deal-seeking and gift card redemption drove higher post-Christmas revenue, according to Kenshoo’s finalized 2011 U.S. Online Retail Holiday Shopping Report.

Mobile Paid Search Clicks Rise; Tablets Lead in Conversions

More than 14 percent of December ad clicks analyzed by Kenshoo happened on a mobile device. Mobile phones drove 6 percent of clicks, but converted relatively poorly at just 0.87 percent. Tablets, meanwhile, accounted for 8 percent of clicks and converted at 2.72 percent, producing $149.84 in revenue per conversion.

Apple iOS users converted almost 20 percent more often than their Android counterparts and spent 13 percent more on purchases.

Google Dominating Paid Search in Americas & EMEA; Falling to Baidu in APAC Region

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Baidu now accounts for 60 percent of paid search spend in the Asia-Pacific region, reports Covario in their 4th Quarter 2011 Global Paid Search Spend Analysis. Their gain is largely Google’s loss, as illustrated in the above chart.

Globally, Google continues to outgrow competitors, with advertisers spending 27 percent more with the paid search giant YoY. “Bing-hoo” lost 18 percent market share compared to Q4 2010, while Baidu grew their paid search revenue an astonishing 185 percent YoY in the fourth quarter, largely driven by their positioning in China.


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