U.S. search advertising spending was relatively flat for most of the year and declined by 8 percent in the fourth quarter of 2008, according to search marketing firm Efficient Frontier.
Breaking it down by search engine, Google grabbed 76 percent of search spending in Q4. Spending on Google Search and its syndicated networks dipped 4 percent year-over-year (YOY).
Despite that, Google gained 2 percent market share from Google Content, which saw a robust 63 percent YOY growth in 2008 due to its improved targeting and monetization efforts across the AdSense network.
Yahoo increased its U.S. market share by 3 percent YOY in 2008, maintaining a 1.9 percent increase in Q3, and adding another 0.5 percent in Q4 to end the year with a total 20 percent market share.
Microsoft Live Search now makes up 4.2 percent of total search advertising spend in the Efficient Frontier index.
From Q1 to Q3 2008, Microsoft Live Search had a higher click-through-rate (CTR) than all other search engines. This changed during Q4 when CTRs on Live Search dropped below Google Search’s CTR. Yahoo CTRs have shown steady improvement, indicating its increasing ability to target audiences. Google Content improved its CTR by 150 percent from 0.08 percent in Q4 2007 to 0.2 percent in Q4 2008.
“Spending in the vertical markets will continue to fluctuate as the macro-economic dynamics change, but we believe that the most sophisticated advertisers in these verticals will continue to be highly successful and that the channel will continue to grow on an overall basis in 2009,” the report concludes.
