Google Continues to Dominate U.S. Search Market, but Early Results of Bing-Yahoo! Alliance Show Positive Signs for Advertisers

SearchIgnite issues Q3 report evaluating the state of U.S. search marketing

ATLANTA, GA – October 12, 2010 – The U.S. paid search market continued to heat up in Q3, with spend on paid search advertisements increasing nearly 6% year-over-year as marketers again turned to search marketing to fuel online growth. Among the engines, Google took an even more dominant lead, picking up two percentage points to garner more than 80% of all U.S. PPC ad spend in the third quarter. But early data coming out of the Bing and Yahoo! alliance reveals that the partnership is showing strong results for advertisers thus far, boding well for Bing to become a viable competitor to Google in the future.

These findings come from a report released today by SearchIgnite, a leading provider of paid search optimization and online media solutions managing more than $600 million in PPC spend annually.

Detailed findings in the report include:

• Google Continues to Seize Significant Market Share: Google now stands at more than 80% of PPC ad spend, up nearly two percentage points from just last quarter, and taking the most dominant market share lead since SearchIgnite began tracking spend share among the engines (2007).

• Strong Quarter for Paid Search with Solid Momentum for Q4: Paid search spend in Q3 increased 5.8% year-over-year compared with flat growth a year ago and exhibited positive momentum month-over-month, with July growing 4.9%, August 5.8% and September 6.7%. The growth throughout the quarter bodes well for a strong Q4.

• Early Results from Bing-Yahoo! Alliance Positive for Advertisers: Despite widespread speculation that CPCs for the new search alliance will hyper-inflate, PPC ads delivered by Bing show little CPC inflation thus far and SearchIgnite does not anticipate that they will be markedly inflated in the future. In addition, click-through rates (CTRs) have increased for advertising served on the combined Bing-Yahoo! search inventory, revealing that Bing’s ad serving algorithm delivers more relevant advertising than Yahoo!, positive news for advertisers.

“Google continued to increase its dominance in the paid search market in the third quarter,” said Roger Barnette, CEO of SearchIgnite. “However, the Bing/Yahoo! alliance is performing well for advertisers thus far, and marketers want to see a viable competitor to Google in the market. We feel that there is a real opportunity for Bing to capture significant market share in the near term if these early results continue to play out in the fourth quarter.”

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