Search Ad Spending Is Stabilizing, But Growth Not On The Horizon Yet

Some mixed, although not unexpected, news ahead of search-engine companies’ second-quarter earnings reports: Search-ad spending has largely stabilized but a comeback is unlikely anytime soon, according to Efficient Frontier. The search-engine marketing firm says that while search-ad spending tumbled 21 percent during the second quarter compared to a year ago, it was down only three percent compared to the first quarter. Cost per click was also up slightly for all three major search engines compared to the first quarter. Efficient Frontier essentially says search spending won’t begin growing again until advertisers shift from their current wait-and-see approach to the economy. “A risk adverse market made few large-scale strategy shifts in Q2,” the firm says. It expects next quarter’s results to be largely the same.

Google (NSDQ: GOOG) maintained its huge leads in both clicks and search-ad spending — although Microsoft’s Bing showed some gains, backing up some earlier stats that Efficient Frontier released last month. Google claimed 75 percent of search ad spending, down slightly from 75.6 percent last quarter. Yahoo’s share stayed basically flat at 20.5 percent, compared to 20.6 percent. Microsoft’s share of spending, however, increased to 4.5 percent from 3.8 percent, while its share of clicks was up to 4.1 percent, from 3.7 percent. Efficient Frontier said that Microsoft (NSDQ: MSFT) performed especially well in travel — one of the four core areas it focused on its search overhaul. Another report from adGooroo, however, showed that Bing had a slight decrease in the number of its first-page advertisers since its debut — which adGooroo said was a sign that advertisers were adopting Bing at a slower pace than visitors (Of course, advertisers do tend to eventually follow traffic).

We should have a better sense of the second quarter search market starting Thursday, when Google reports its earnings.