Performics 50 Search
Engine Marketing Index Uncovers
First Quarter Trends
Sales growth outpaces campaign growth by more than 30
percent
New York, NY, 6/22/2006 - Sales growth between Q1 2005 and Q1 2006
markedly outpaced campaign growth, according to the Q1 Search Trend
Report released today by Performics, the performance marketing
division of DoubleClick. While campaign size and cost each grew
nearly 40 percent, year-over-year sales surged more that 70
percent. In fact, the return on investment realized by search
advertisers in March was stronger than it had been at any time in
the previous 15 months. The growing gap between spend and sales
indicates that advertisers are making smarter decisions about how
to maximize their search marketing spend, said Stuart Frankel,
president of Performics.
The Search Trend Report is based on analyses of the Performics 50,
the only index of actively managed, ongoing paid search engine
marketing campaigns. The latest Performics 50 offers insights and
illustrates trends based on data from October 2004 through March
2006.
Laptop Battery Another key finding is that higher priced, competitive terms
played a more significant role during the holiday season than
during the first quarter. Consumers in Q1 2006 versus Q4 2005
tended to click on more specific keywords rather than generic
category terms, which garner higher costs per click. The percentage
of keywords priced above $1.00 fell from seven to five percent from
the end of Q4 to the end of Q1, while the percentage of total
clicks on these keywords dropped more from 11 to four percent
during the same time period.
Thinkpad The findings indicate a shift in shopper behavior during the
holiday season. Shoppers in the fourth quarter were buying for
others and although they knew they were going to purchase
something, they werent necessarily sure what, said Frankel.
However, in the first quarter, when shoppers were buying for
themselves, they had likely already narrowed down the options, and
therefore were searching with more specific terms.
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Microsoft The report also confirmed an expected falloff in search costs in
Q1 2006 from Q4 2005, as advertisers reduced their bids following
the holiday season. Both Cost per Keyword (CPK, total cost of
owning a keyword over the course of a month) and Cost per Click
(CPC) returned to levels near those in the first quarter of 2005.
The average CPK slid about 50 percent from a fourth quarter high of
$59 to near $30 throughout the first quarter.
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Laptop Computers Summary of Key Takeaways from the Q1 2006 Search Trend
Report:
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Laptop Computer - Programs continue to grow and become more efficient. Compared
to Q1 2005, the average number of active keywords those receiving
at least one click or conversion per month was up 36 percent in Q1
2006. Total spend and clicks were up 37 and 24 percent,
respectively, while sales increased 72 percent.
- Keyword growth is outpacing clicks. Year-over-year growth of
active keywords outpaced the growth of clicks indicating searchers
were clicking on a wider variety of keywords.
- Cheaper keywords make a comeback. Although nearly 30 percent of
clicks came from keywords priced at a Cost per Click (CPC) of more
than 50 cents in December, that proportion dropped to below 20
percent in March.
- Keyword ownership costs returned to near Q1 2005 levels. The
overall CPK (Cost per Keyword) dropped from a fourth quarter high
of 59 dollars in December to near 30 dollars throughout the first
quarter
- Advertisers are growing savvier. Advertisers were able to keep
high prices in Q4 from deflating their return on investment.
Additionally, they transitioned well from high price to low price
keywords from Q4 to Q1.
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Desktop Computer Seasonal spikes in consumer activity require search advertisers
to quickly react to changing market conditions to avoid ineffective
ad expenditures, added Frankel. The reports findings indicate that
advertisers are increasingly cognizant of these issues and are
adjusting strategies accordingly as search engine marketing
continues to grow.
Notebooks About the Performics 50
The Performics 50 was established in April 2004 to provide
advertisers with a practical way to gauge the success of their
search campaigns against an industry average. It is a
representative index that monitors the growth of paid search
advertising by providing a stable
platform for benchmarking and analysis.
Lenovo To create the index, Performics selected the 50 paid search
campaigns that most closely represented the average number of
monthly clicks across all campaigns based on the first
three months of April 2004.
Performics drew on almost 300 active campaigns across a wide
range of industry categories, and excluded the very top and
bottom of the ranges. Each month after that, new campaigns have
been added only when campaigns previously in the index deviated
significantly in traffic.
Hard Drive When Performics introduced the Performics 50, the company
unveiled cost per keyword (CPK), which measures the total cost of
ownership of a keyword over the course of a month. Trending data
based on average CPK represents actual advertisers search costs and
helps advertisers grade the quality of growth in their own search
campaigns, much like a stock market index provides context for a
particular stocks performance against the market.
Travelstar Why is CPK relevant? CPK incorporates both the supply and demand
components of all keywords in a campaign, measuring the actual
costs an advertiser paid for keyword positions and resulting click
traffic. A keyword with a cost per click (CPC) of $.80 that
receives ten clicks in a month, for example, costs an advertiser
less than a keyword with a CPC of $.50 that receives 20 clicks.
Gateway Advertisers can use the index to understand a number of
benchmarks and dynamics, including the average price paid by
advertisers across a portfolio of keywords. Other findings give
advertisers contextual comparisons for factors such as: growth rate
of active keywords, which indicates searcher demand; overall
advertiser investment and budget decisions; and market
competitiveness.
Laptop Parts The full Search Trend Report is available at
www.doubleclick.com/knowledge.
Software About DoubleClick
DoubleClick provides technology and services that empower
marketers, agencies and web publishers to work together
successfully and profit from their digital marketing investments.
Our focus on innovation, reliability and insight enables clients to
improve productivity and results.
Hard Drives Since 1996, DoubleClick has empowered the original thinkers and
leaders in the digital advertising industry to deliver on the
promise of the rich possibilities of our medium. Today, the
companys DART and Performics divisions power the online advertising
marketplace. Tomorrow, we will continue to enable clients to profit
from opportunities across all digital advertising channels as
consumers worldwide embrace them.
Electronics DoubleClick has global headquarters in New York City and
maintains 21 offices around the world to serve its more than 1500
clients.
Canon Source: DoubleClick
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