Report: Google Gets 75% Of Paid Search Clicks & Dollars

The latest quarterly report from Effecient Frontier (a search agency that manages more than $750 million in annual digital spending annually) recently confirmed but many of us had already assumed. Three out of every four paid search clicks are captured by Google, and 75 cents of every paid search dollar is also consumed by Google.

Effecient Frontier’s stats cover Q4 of 2009, and show Google’s share of paid search clicks rising from 71% in Q3 to 74.4% in Q4. Similar to market share, Yahoo’s share of paid clicks dropped from 24.4% in Q3 to 21% in Q4. Bing’s share while down slightly in Q4, remains up 31% year over year.

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The percentage numbers are similar in terms of spend as well, according to Efficient Frontier reports. Google is the clear leader, but the company’s 74.5% share is actually down year-over-year. For the year, Yahoo remained steady at 20.4% of spend. Bing continues t be the interesting story growing 25% from Q4 2008 to Q4 2009.

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As paid search advertisers, we should be encouraged by the overall positive outlook. As expected given seasonality, Efficient Frontier says the retail sector led a strong Q4 2009 that was up 6% from quarter to quarter and from year to year. What is interesting however is the fact retail CPC was down 9% from Q4 2008 levels. Efficient Frontier suggests lower cost-per-click may be due to search engines experimenting with new ad formats:

“Google and the other engines are adding more features to provide comparative shopping data within the SERP, a move that is likely contributing to a retail CTR drop-off of over 40% YOY.”

Looking ahead, Efficient Frontier is optimistic for 2010 expecting:

“moderate amount of CPC growth will accelerate growth in Q1 and throughout 2010,”and that “2010 spend growth will exceed earlier estimates of 10-15%.”

The report also predicts solid growth for Bing in 2010, saying that a 30% gain is possible, putting Bing between 6-7% of click share by year’s end. But there’s also a warning that Yahoo’s falling share of paid clicks could offset Bing’s gains if and when the Microsoft-Yahoo search deal is approved and takes effect.

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