Reports of Google's Demise Greatly Exaggerated, According to New SearchIgnite Report

ATLANTA, GA – February 29, 2008 – In spite of macroeconomic challenges, a new report from SearchIgnite shows that spending on search marketing so far in 2008 has been very robust and has been increasing steadily over the quarter among SearchIgnite’s client base of major brand marketers. While recent data from research firm comScore Inc. reported a slowdown in Google’s overall paid clicks, analysis of SearchIgnite’s client base shows a 45.7% increase year-over-year on paid clicks and an increase in ad spend on Google of 40.1% year-over-year.

The data, as well as SearchIgnite’s own discussions with clients, show that a greater proportion of the overall digital marketing budget continues to be allocated towards search, in an effort by marketers to increase sales from more profitable and measurable marketing channels in the midst of a challenging consumer environment.

“Brand marketers are moving more money into search right now because it is the most measurable form of media,” said Roger Barnette, President of SearchIgnite. “Despite a broader economic slowdown, we believe marketers will continue to shift a larger portion of their marketing spend into areas that demonstrate direct ROI, regardless of where the economy stands.”

In spite of recent positive trends, SearchIgnite’s analysis also shows some early signs of declining conversation rates, which could pose challenges down the road for marketers and the search engines if it continues.

Key findings include:

  • 1. Ad impressions are up 79.5% YOY, paid clicks are up 47.2% YOY, and total advertiser spending on search marketing is up 43.0% YOY, based on SearchIgnite’s analysis of search spend from large brand marketers during January 1 – February 15, 2008.
  • 2. Across all of the major engines, click through rates declined YOY from 4.2% to 3.6%, and conversion rates and advertiser ROI also showed YOY declines. These figures could be early signs that search marketing will show weakness later in the year.
  • 3. The increase in search spend is being led by retailers and non mortgage related financial services, who appear to be shifting budgets into search in the face of a consumer spending slowdown. Retail advertisers increased spend on search by 63% in the first 45 days of 2008.

SearchIgnite’s research is derived from analysis of the search marketing performance of its client base, which is comprised of large, sophisticated marketers across a wide range of industries, including retail, travel, financial services, as well as media and entertainment. The SearchIgnite data in this report covers 800 million impressions and 53 million clicks across the major engines (Google, Yahoo and MSN) from SearchIgnite’s client base. All data given is on a same-client basis (SearchIgnite’s “Same Advertiser Spend” metric) and is for the time period January 1, 2008 – February 15, 2008, unless otherwise noted.

Google vs. Overall Search Engine Performance
The number of paid clicks on Google increased 45.7% in the first 45 days of 2008 compared with the same time period a year ago. In addition, ad impressions on Google are up 60% year-over-year and total advertiser spending is up 40.1%.

Quarterly Year-over-Year Ad Spend Trends
Ad spend on Google is up 40.1% thus far in 2008, compared with the same time period last year. Although the year-over-year growth in January was a relatively weak 29.5%, February is already showing more substantial gains, contributing to an overall positive outlook for spend growth on the search engines throughout the remainder of the quarter. Significantly, it appears that year-over-year growth in Q1 is higher than growth in Q4, which ends a declining growth trend.

About SearchIgnite
SearchIgnite is a powerful search management and auction based optimization technology that simplifies large cross-engine search campaigns, providing marketers and advertising agencies with one central platform for managing, optimizing and tracking complex keyword portfolios in real time. Marketers who use SearchIgnite have full transparency and control over their campaigns with flexible bid management capabilities including manual bidding, rules-based bidding and portfolio optimization. Leading marketers and agencies depend on SearchIgnite to simplify and maximize the performance of their paid search campaigns. SearchIgnite is part of Innovation Interactive, a digital marketing services company.

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