With the importance of maximising ROI at the moment to marketers, the results provide some interesting insight into the current situation. Is paid searching becomming less effective?
The data was taken from the period of January 2008 to March 2009 and click through rates have declined from 40% to 20% whereas the cost per click has risen from 6p to 29p.
Rob Taylor, Search Director at BLM Quantum, gives some possible reasons for this cost increase,
“What we are seeing is a four-fold increase in Brand CPCs in just over 12 months. This may be a reflection of the fact that brand terms are becoming more competitive in line with a decline in the economy. As search is so measurable, clients are beginning to realise that competitive bidding generates positive ROI, even though the quality score is against them and CPCs are high. It is important to remind clients to defend brand terms, but also to consider their competitive position as rivals may also be pitching to their customers at the same time.”
The Adwords offering from Google saw some significant changes in the period in question, notably the ability to bid on trademarked terms. Google maintains the move was to 'improve the consumer experience' however there have been calls that it was a tactic to boost profits by increasing cost of search.
The results are graphically represented below courtesy of IPA,
We await natural search statistics for a clearer market picture.
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