Google’s Share of Search Grows Slightly in Q3 2008

A report recently released by Efficient Frontier analyses the performance of Google, Yahoo and MSN. Their Q3 2008 U.S. Search Engine Performance Report focuses on search engine spending, CTR, CPC and ROI from advertisers in the Efficient Frontier Client Index.

The publishers of the report have quite rightly chosen to report separately for financial services advertisers and non-financial services advertisers on account of the volatile conditions in the sector over the past year.

The report’s findings are fairly strightforward. Google continued to gain share for all advertisers over last year, capturing 76% of total search engine spend in Q3 – up 2.1 percentage points from Q3 2007. That gain in share was largely due to growth in Google content spending, which increased from 2.6% to 4.6% of spending over the last 12 months from Q3 2007 to Q3 2008.

Cost Per Clicks rise on Google Search and Content Search

Content spending increased by 82.8% YOY  in Q3 2008 for non-financial services advertisers, and by 16.6% in financial services.

A look at trends in CPCs across search and content gives an indication of why advertisers are investing more in Google content and continue to spend on Yahoo and Microsoft Live Search.

On a YOY basis CPCs on Google search increased by 8.3% and 4.7% respectively for financial and non-financial services advertisers.

CPCs declined YOY for Microsoft Live Search and Yahoo Search, with the exception of CPCs on Microsoft Live Search for non-financial services advertisers, which were up 6%. Google content CPCs increased by 20% for non-financial services advertisers, but at $0.28 a click, Google content is still 53% cheaper than Google search, which averaged $0.61 per click in Q3.

The report also found that, in an increasingly unstable economic environment, ROI improved on all three major search engines in Q3 2008 on a YOY basis. Google search ROI for non-financial services advertisers increased by 11.3%, Yahoo search by 19.7% and Microsoft Live Search by 29.9% YOY.