Search Advertising ROI Trends Upward, Performics Finds

CHICAGO – Performics today released aggregate data from its clients’ ‘same store’ online retail search marketing campaigns, illustrating important findings for advertisers, including an increase in first half ROI and a jump in July search spend. Signs point toward a possible shift among advertisers to increase search investment through the balance of 2009 and the holiday season.

For Performics’ same store online retailers, search advertising ROI increased 8.8 percent year on year through June, including a 13.5 percent ROI jump in May. Helping to drive this was a $.05 or 8 percent drop in average cost per click (CPC) as advertisers pulled back on investment levels as well as an increase in average order value (AOV) of 3.3 percent. In July, for the first time in 2009, these advertisers increased their search investment year on year with spend increasing 13 percent versus July 2008.

“Performics has systems in place to measure the effectiveness of search strategies our teams have employed with our clients to contain costs, drive efficiencies and AOV,” said Nick Beil, CEO of Performics. “For these online retail clients, we focused on efficiency in the first half of the year and saw significant gains. In July, we saw a shift in strategy to loosen cost containment efforts and go after transaction volume and market share. A key question for search advertisers for the balance of ‘09 is whether to focus on efficient sales or sales growth. Consumer demand will drive this decision and, as the recent back-to-school numbers show, folks are still watching their dollars carefully.”

In July, Performics also recorded additional search trends including increased auto category spend as advertisers tried to keep up with the surprising demand generated by the ‘Cash for Clunkers’ program and a slight increase in Bing’s share of spend (versus Google and Yahoo!) across all advertisers. Bing investment was up 40+ percent month-on-month across Performics’ advertiser base. Helping to fuel this was a $0.19 increase in CPCs, reflecting increased competition and investment on Microsoft’s new decision engine.

“As we continue to see, search channel performance is driven by many factors. For our automotive advertisers, the well-publicized ‘Cash for Clunkers’ program generated tremendous consumer interest and has proven to be a great example of online activity driving offline leads and sales,” added Beil. “With Bing, we saw some increased advertiser demand taking advantage of the engine’s favorable performance metrics, including higher click through and conversion rates, as well as their Cashback program. With the Microsoft-Yahoo! agreement recently announced, we are eager to see the benefits and effects of this combined scale on our advertisers’ programs.”