A Peek into Google's Q4 Earnings: Mobile Searches Skyrocket

Google won’t report its fourth-quarter 2011 earnings until Jan. 19, but clues are starting to emerge about how its mainstay search ads performed during the biggest shopping quarter of the year.

According to a report to be released Tuesday by the digital marketing firm IgnitionOne, search ads had their biggest quarter yet despite the tepid-to-poor economy. In particular, mobile searches exploded. As the largest search ad seller by a light-year, Google stands to benefit–with the one caveat that IgnitionOne’s customer base leans toward large retailers, so it may not be fully representative of Google’s fourth quarter.

Some highlights from the report:

* Mobile search is growing at an enormous rate: YoY mobile search ad impressions are up 317% and spend is up 269%. Among retailers, mobile search ad spend accounted for 14.2% of total paid search budgets, compared to 5.2% last year. This spiked on Black Friday with 24% of retail search ad spend going towards mobile queries.

* Search advertising has its best quarter ever: It was a strong holiday season for search with advertising spend up 22% YoY in Q4. Search advertising spend among retailers was up even higher at 26% YoY. There were also large YoY increases in impressions (42%), clicks (42%) and transactions (67%).

* Search costs (CPCs) declining: Across all engines, Q4 CPCs are down -8.6% YoY and -2.3% compared to last quarter. This trend benefits both marketers and Google as clicks cost less while monetizing at the same rate and expanding impression base and higher clickthrough rates indicates top-line revenue growth for Google. The trend is driven by Google, as Yahoo!/Bing saw a YoY 6.4% increase in CPCs.

* Google retains market share lead: In mid-Q4, Yahoo!/Bing held only a 16.6% share of the search market, but as expected, given its retail consumer focus, it rebounded with a stronger holiday shopping season. However, by the end of Q4, search market share remained largely unchanged from the previous quarter, with Google commanding 81.8% compared to Yahoo!/Bing at 18.2%.

* Europe search advertising also on the rise: Q4 shows gains for European search advertising as spend increased 14%, clicks increased 22% and Clickthrough Rate (CTR) increased 19%.

* Google continues to grow in display: Spending on display was up 9.3% and impressions were up 31.5%. The growth for Q4 came from Google’s DoubleClick Ad Exchange, which saw a 105.5% increase in spend.
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