Firm Sees Potential For ‘Double-Digit’ Increase In Search Ad Spending This Quarter

The search-ad market is on the way up again. Search engine marketing firm Efficient Frontier says it now sees “potential” for “double-digit” quarter-over-quarter and year-over-year sales growth during the remainder of the year; in July, it had said that while the search-ad market had largely stabilized, it didn’t expect much of a bump. But in a report due to be released tomorrow, Efficient Frontier says new growth will come from retail advertisers during the holiday shopping season. It also helps that the fourth quarter of last year was a downer for the search-ad market.

During the most recent quarter, Efficient Frontier says it already noted signs of a recovery: Search-ad spending was up five percent, compared to the second quarter of the year. That was still down five percent from a year ago, but it was a much more muted decline than the 21 percent year-over-year plunge a quarter ago. “Although Efficient Frontier’s sample of marketers did not demonstrate a huge acceleration in spend, there was a slowing of decline as marketers let up on the spending (brakes),” the firm says.

Bing is up: In addition to its growing share of overall searches, Microsoft’s revamped search engine is also attracting a greater share of advertisers’ dollars. Microsoft’s share of search-ad spending jumped to 5.3 percent, compared to 4.3 percent during the second quarter. Click share increased to 4.8 percent, from 4.1 percent. Efficient Frontier noted that Bing had its most significant growth in finance and travel. In travel — a category Microsoft (NSDQ: MSFT) has emphasized– Microsoft’s share of spending jumped to 6.3 percent from 4.4 percent during the second quarter.

Some of Bing’s gains came at the expense of Google (NSDQ: GOOG), which saw slight decreases in its share of clicks and spending. Google’s share of search-ad spending dropped to 73.7 percent from 75.5 percent. Cost per click at the search giant was also down for the fourth quarter in a row. Yahoo (NSDQ: YHOO), meanwhile, saw slight increases in both spending and click share.

Travel is down: Overall, travel was the hardest hit vertical with spending down 39 percent, compared to a year ago. Retail, finance, and auto, however, were all up compared to the third quarter of 2008.

We should get more visibility on the state of the search-ad market when Google, Yahoo, and Microsoft post their earnings over the next two weeks. Google starts the trio off with its earnings report on Thursday afternoon.