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Paid search surged in fourth quarter, but prospects mixed

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San Diego, Calif.—Fourth-quarter paid search, as reflected by ad spending on major U.S. technology and consumer electronics Web sites, rose 7.2% over third-quarter expenditures and by an impressive 43% over last year’s fourth quarter, according to a new study by interactive marketing analytics company Covario.

But search is feeling the impact of the weakened economy, according to Covario’s “Global Search Spending Analysis,” which is based on paid search spending of Covario’s U.S. high-tech and consumer electronics customers. The company estimated that the strong fourth-quarter growth rate was the result of budgets that were already committed.

Further, average cost-per-click levels in the high-tech sector continued to fall in the fourth quarter, down 17% from the third quarter to a CPC of 86 cents. Despite its leadership in search queries, Google’s CPC fell from $1.14 in the third quarter to 89 cents in the fourth quarter.

In addition, click-through rates on Google fell for the sixth straight quarter.

—Christopher Hosford

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