Paid search market bounces back in 2010

Helped by a fourth-quarter boost, spending on paid search ads rose more than 18 percent in 2010, with Google grabbing almost 83 percent, says SearchIgnite.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
Lance Whitney
2 min read

The market for paid search ads staged a healthy recovery last year, according to a report out today from online marketing company SearchIgnite.

For 2010, spending on paid search ads rose 18.5 percent over 2009, a year when spending declined. The fourth quarter in particular played a huge role in the recovery with a 35.5 percent overall gain in spending from 2009's final quarter. December alone saw a 44.8 percent jump in spending.


Retailers in particular funneled more money toward paid search ads last year, especially over the holiday season as online shoppers opened up their wallets, a sign to SearchIgnite of improving consumer sentiment.

Google was the major beneficiary of the boost in spending, winning 82.6 percent of all search ad dollars over the fourth quarter. In contrast, Yahoo and Bing, which SearchIgnite dubbed YaBing, grabbed only 17.4 percent of all search ad spending during the final quarter of the year.

"2010 proved to be a great year for search advertising as the search market recovered from the downturn seen in 2009," SearchIgnite CEO Roger Barnette said in a statement. "Even more promising is the revival of consumer spend throughout the year...We expect 2011 to be a strong year for search and online advertising overall."

To compile the latest stats and the historical data, SearchIgnite tracked more than 59 billion ad impressions and more than 1.2 billion clicks on Google, Yahoo, and MSN/Bing from January 1, 2006 through December 31, 2010.

SearchIgnite's positive results on paid search spending were echoed by Efficient Frontier. Looking specifically at data from its own customers, the digital marketing firm found that spending on search engine marketing rose 23 percent for all of 2010 and 18 percent during the fourth quarter.

Geared toward helping advertisers determine how and where to spend their dollars, Google's DoubleClick ad exchange, AdX, helped the search giant grab a larger share of the paid search market. And although Yahoo and Bing didn't fare as well, Efficient Frontier believes ad spending directed toward the two companies will rise as small- and medium-sized businesses see the potential for higher returns from the combination.

"2010 ended with a bang as fourth quarter digital marketing (spending) rose across all the major categories including retail, finance, auto, and travel," David Karnstedt, president and CEO of Efficient Frontier, said in a statement. "Advertisers seem to be signaling that the economy is turning around by increasing their marketing spend across search, display, and Facebook to respond to consumer demand."