Google AdWords CTR Improves, Yahoo & Bing Both See PPC Spending Increase

Google CTR is up while Google impressions are down, whilst Bing and Yahoo have seen a dramatic rise in both CPC and total spend, according to a recent report from Marin Software which examines search advertising trends over the last year.

Key Details of the Study

The study from Marin Software takes into account the company’s 800 clients, which spend a total of $2.1 billion annually. On the whole, search spending is on the rise, with a 20 percent increase on a year over year basis. Achieving this sustained expansion hasn’t been entirely easy, however; Google impressions have gone down substantially, with an average 15 percent decrease from last year.

Percent Change in Key Paid Search Metrics

So how have advertisers managed to increase scale without sabotaging their profit margin? On Google, we can blame the improving CTR (click-through rate), which rose 12 percent without a large increase in CPC (the cost per click rose by only 2 percent from last year). Updates to the Google ad algorithm may be part of the cause for an increased CTR, but Marin Software’s data also suggests that “search marketers took steps to improve efficiency,” especially when it comes to exact match and phrase match bidding.

Of course, some of the increased spend comes from spreading into Bing-Yahoo advertising. Bing and Yahoo now comprise roughly a quarter of all search traffic, making them far more viable as an ad medium than either company was when it ran on its own. The end result is increased investment in Bingahoo advertising, which led to a 52 percent increase in spend on the platform and a 20 percent increase in average CPC. Click-through rates for Bingahoo are also on the rise, having improved by 6 percent on a year over year basis.

Matt Lawson, vice president of marketing for Marin Software, commented on the trends. “Large advertisers have done an extraordinary job in the past year of increasing spend, while maintaining or increasing campaign efficiency. By focusing on campaign management – improving keyword relevance and click-through rates – it’s clear that sophisticated marketers have the ability to continue scaling even the largest paid search programs without sacrificing profits.”

You can download also download the full Marin Software report, which includes specific analysis of the trends mentioned above, numerous visual representations of advertising trends, and an examination of additional search advertising changes.

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