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Nov '07 Pay-Per-Click Trends: Ad Spend up 35%, CPCs up 5%, G-Y-M Share %s Hold Steady

The holiday shopping crush is underway! In November 2007, our agency's clients in aggregate spent 35% more on paid search than in October 2007. (This statistic excludes a small number of new clients for whom we did not have complete data for both months.) Breaking this result out by engine, our clients spent 36% more November-vs.-October on Google, 35% more on Yahoo, and 17% more on Microsoft. Increased click volumes drove this rise in ad spend. Our clients saw CPCs up only 5% overall, November vs. October. Breaking out that 5% by engine: Google CPC's were up on average 5% vs. prior month; Yahoo, up 8%; Microsoft, up 2%. In absolute terms, our clients' aggregate CPCs on Google rose from an average of 59.4c in October to 62.6c in November; Yahoo rose from 47.8c to 54.2c; and Microsoft rose from 53.0c to 54.2c. Here's a plot of average CPC by engine, aggregated across our client base, for the Fall season (click to enlarge): google-pay-per-click-market-share1.jpg While we suspect CPCs jumped more 5% industry-wide last month, our clients experienced lower than average cost-per-click increases due to our portfolio bidding platform. Nearly all of our clients instruct us to buy paid clicks for them based on efficiency, and our optimization algorithms avoids overbidding on high-cost terms with poor conversion. Continuing earlier market share reports, we note the proportion of our clients' aggregate ad spend going to Google, Yahoo, and Microsoft stayed essentially flat from October to November: Google at 79.3%, Yahoo at 16.2%, and Microsoft at 4.5%. These "Big Three" PPC engine share numbers add to 100% as we've excluded our agency's clients' spend on smaller engines and shopping feeds. (click to enlarge) google Microsoft Yahoo Cost Per Click values, Fall 2007 Here are those data in tabular form:
Month Google Yahoo Microsoft
2007-01 73% 22% 5%
2007-02 70% 26% 5%
2007-03 72% 24% 4%
2007-04 76% 20% 5%
2007-05 74% 21% 5%
2007-06 73% 21% 6%
2007-07 76% 19% 5%
2007-08 77% 18% 5%
2007-09 76% 19% 5%
2007-10 79% 16% 5%
2007-11 79% 16% 5%
As mentioned in prior months, nearly all of our clients instruct us to run their paid search campaigns to their chosen economic target. None of our clients set a priori budget levels by engine. Our portfolio bidding platform optimizes ad spend, buying the highest quality clicks first. Thus, an increase in ad spend on one engine, relative to the others, reflects an increase in click quality relative to the others. We're clearly in the tumultuous home stretch -- just a few more critical weeks to make or break retailers' calendar '07 sales goals. Buckle your seatbelts!
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