Covario Reports Fast-Paced Growth in First Half Search Ad Spend Globally

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Mobile Search Spending Nearly Doubled in the Second Quarter vs. Last Year

SAN DIEGO, July 15, 2014 – Covario, Inc., a leading independent search and content marketing firm, today issued its Global Paid Search Spend Analysis for the second quarter of 2014, reporting that first half spending on pay-per-click advertising (PPC) by its enterprise technology, B2B, consumer electronics, and retail clients had a strong finish, rising 21 percent above the second quarter of 2013 and 2 percent ahead of this year’s first quarter.

Paid search advertising on mobile devices like smartphones and tablets drove much of the growth on a global scale with mobile search spend rising 98 percent year-on-year and 6 percent versus last quarter. Covario reports that mobile platforms now represent 25 percent of all paid search spending. Mobile ad spend by device type in the second quarter stood at 62 percent for tablets and 38 percent for smartphones.

Globally, click-through rates (CTRs) for all desktop and mobile devices surged by 39 percent over the same quarter a year ago, while cost-per-click (CPC) prices rose 2.4 percent during the quarter and 12 percent compared to the second quarter of 2013.

Alex Funk, the study’s author and Covario’s director of global paid media strategy, believes this was due “in large part to the increased desktop competition for the falling impression levels buoyed by higher performing ad units.”

The Americas region, led by paid search investments in the U.S., Canada, Mexico, Chile and Brazil, realized a 31 percent year-over-year increase in search spending, but was flat compared to the first quarter of 2014.

For the remainder of this year, Funk encourages advertisers to budget for a 15 to 20 percent increase in PPC spending across the region due to certain trends that began last year, including stepped-up investments in Google Product Listing Ads (PLAs), mobile search across the board, and higher ad engagements. For the Americas overall, he suggests that 80 percent of the regional search budget go to ads on Google and the rest largely to Bing.

In Europe, the Middle East and Africa (EMEA), search spending continued its modest rebound in the second quarter, increasing 3 percent over the same period a year ago and 5 percent higher than the first quarter. Funk said this was driven by both an increase in click activity and by higher CTRs on ad creative. The developed markets of Germany, the U.K., France, and the Nordics had the largest gains.

For the rest of 2014, Funk advises EMEA marketers to increase their search spending in the region by 10 to 15 percent, concentrating on both developed Tier 1 countries as well certain emerging markets in the Middle East and Africa. He recommends allocating 95 percent of the paid search spend in the region to Google, except in Russia and Eastern Europe where Yandex should dominate budgets.

Second quarter search ad spending in the Asia/Pacific region (APAC) experienced muted growth of 1 percent year-on-year and 6 percent quarter-on-quarter. According to Funk, the growth was due to a 9 percent increase in click volume and a 23 percent increase in ad effectiveness, but was tempered by a 7 percent decrease in CPCs.

Baidu, which dominates the Chinese search market, captured 25 percent of the overall APAC search market share, with 69 percent going to Google and 4 percent to Naver – the leading search engine in South Korea.

Funk recommends that advertisers budget for 10 to 15 percent search spending increases across the Asia/Pacific region, with most of the investment directed toward China, South Korea, Japan, certain South APAC countries, Australia, and New Zealand.

Among the major search engines globally, Google continues to command 86 percent of total paid search spend, 73 percent of global impressions, and 63 percent of the clicks worldwide. Global advertiser spending with Google was up 19 percent in the second quarter from a year ago.

Baidu now has 8 percent of the global search market share (concentrated primarily in China) and the Yahoo-Bing network has 4 percent share.

The complete Global Paid Search Spend Analysis report is available as a free download from the Covario website at www.covario.com.

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About Covario and the Global Paid Search Spend Analysis

Covario is a leading independent search, social and content marketing agency, as well as one of the top SEO and social media software providers. This is the eighth year that the firm has produced the Global Paid Search Spend Analysis, which now encompasses 30 quarters of data on the search spending patterns of its global technology, consumer electronics, and retail search marketing clients. These companies invest in paid search advertising with all of the major search engines in more than 45 countries.

Covario was selected by OMMA magazine for a record-setting third-year in a row as the Search Agency of the Year from 2011 to 2013. The firm was ranked in 2014 by Advertising Age magazine among the nation’s Top 12 search agencies. Covario also offers a suite of SaaS-based software tools for local SEO, mobile search, social media marketing, and enterprise search.

Headquartered in San Diego, the firm has more than 200 team members in global locations, including Beijing, Chicago, London, New York, Phoenix, San Francisco, Sao Paulo, Seattle, Singapore, and Tokyo. The firm’s growing customer base includes global leaders in technology, consumer electronics, financial services, retail, ecommerce, media, entertainment, publishing, and consumer packaged goods. More information is available at http://www.covario.com.

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