US Online Advertising Sees Strong Growth in Q2, Paid Search Dips in June

IgnitionOne Releases Q2 US Digital Media Report

NEW YORK – June 29, 2011 – Online advertising saw strong spend growth in the second quarter, according to a report released today by IgnitionOne, a leading provider of performance marketing technology and services, managing more than $1 billion in online advertising for some of the world’s largest brands and their agencies, including Chico’s, Ann Taylor, La Quinta and more.

The second quarter saw year-over-year spend growth increases across all three major online media channels (Paid Search, Display and Facebook), despite continuing uncertainties from the economy and higher gasoline prices. US paid search spend grew a steady 12% year-over-year and Facebook advertising was particularly strong, up 22% on a same-client-basis and up 280% across all advertisers. However, paid search declined in June, painting an uncertain picture for the third quarter.

Key findings in the report:

Paid search advertising sees steady growth YOY, but dips in June US paid search spend grew a steady 12% year-over-year in Q2, and was flat compared with Q1 growth. The quarter began strong, but dipped in June to nearly flat growth on a YOY basis.

Google commands majority of market share in search, display
Google was again the standout performer showing gains in YOY search spend and significant market share traction for its AdEx display platform. Google grew to 81% share of all US search advertising spend and 51% share of US RTB display spend in Q2.

Facebook sees dramatic growth from new advertisers
Facebook advertising spend is up 22% YOY on a same-client-basis. However, Facebook has experienced high rates of growth from new marketer adoption in the past year, contributing a 280% increase in advertising spend across all clients. Spending patterns within an advertiser’s campaign lifecycle show marked growth declines after the first few months, suggesting advertisers are still in a “test and learn” phase with the new and immature ad platform.

“Overall it was a very good quarter for online advertising, but it wasn’t a slam dunk,” said Roger Barnette, President of IgnitionOne. “The paid search spending slowdown in June did not have a significant impact on the quarter overall, although it could be an indicator of future months’ performance, and we’re cautiously optimistic heading into Q3.”

IgnitionOne’s complete Q2 report can be downloaded here.

This report is the latest in a series of reports from IgnitionOne reviewing trends across the online advertising landscape. Previous quarterly reports can be downloaded at http://bit.ly/ignitiononeresearch.

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Amanda Bird
Director of Marketing
abird@ignitionone.com
212.991.4376

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