Search ad spending by tech, electronics companies slows

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San Diego, Calif.—Search advertising has begun to feel the dampening effects of the worldwide economic downturn, according to a new study by Covario. The marketing analytics company said search ad expenditures dropped in the first quarter for the first time ever.

In tracking the ad spending of its own customers, mainly technology and electronics companies, Covario reported that search budgets contracted 1.4% in the first quarter compared with the previous three months.

Covario noted that the drop was mainly because of big cutbacks internationally. Europe, the Middle East and Africa saw search spending fall 15.9% quarter-to-quarter. However, Asia and the Pacific Rim continued to experience search strength, with a 7.4% spending increase in the first quarter.

Spending in the Americas was essentially flat, up just 0.8%.

As for the search engines, spending on Yahoo and Microsoft Live Search was strong in the quarter, up 25% and 15% respectively over the fourth quarter of 2008. Market leader Google experienced a 6% decline, largely due to overseas cutbacks, Covario said.

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