Meet Google's Biggest U.S. Search Advertisers

New Kantar Estimate: IAC, Amazon.com, AT&T, Expedia, Experian and Microsoft Top the List

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Google likes to talk about display and brand advertising these days but the vast majority of its revenue still comes from its revolutionary core product: search.

But who spends what on search advertising is a tough question. While Google's quarterly reports are a good starting point, what individual advertisers or companies spend is in the realm of educated guess -- known only to the advertiser and to Google itself.

The reason it's difficult is that you can't measure it on a cost-per-impression basis like just about everything else. Advertisers bid on keywords in real-time, and prices depend on competition for a given keyword at a given moment and ad-quality scores. Those attempting to come up with estimates generally derive it from several sources of data, including number of search ad impressions, total inventory and assumptions on the likely number of bidders in keyword auctions based on a subset of data.

In 2010, Ad Age published some hard search figures based on leaked Google documents. "There is no perfect data source, so anything you get you also have to take with a grain of salt," said Kevin Lee, CEO of search marketing firm Didit.

Parent Global Search Spend (000)
Jan. - Sept. 2011
IAC/InterActiveCorp $174,231
Amazon $118,501
AT&T $115,564
Expedia $92,163
Experian Group $79,281
Microsoft Corp. $70,943
eBay $70,554
Priceline.com $67,616
Capital One Financial Corp. $57,080
State Farm Mutual Auto Ins. Co. $54,507
Sprint Nextel Corp. $53,405
Verizon Communications $52,745
Allstate Corp. $50,076
JP Morgan Chase & Co. $49,214
General Motors Co. $49,048
Blackstone Group $47,502
Progressive Corp. $46,841
Enterprise Holdings $43,070
Avis Budget Group $42,063
Bank Of America Corp. $41,515

But Kantar Media, a unit of ad giant WPP, is taking a stab. Kantar is well known for its offline and online display figures, some of which form the basis for ad spend estimates in Ad Age 's DataCenter. Last spring Kantar started estimating Google search spending in the U.S. based on keyword clicks, pricing and impression data. Next year Kantar plans to expand that to include the entire search market, including Microsoft 's Bing, and then merge that with overall spending on TV, display, print, etc. The chart contains the first nine months of data from January to September 2011.

Plenty of corporations spend in the tens of millions on search each year and several spend in the hundreds of millions. The top spenders have huge consumer businesses based significantly, if not entirely, on their ability to perform in search. The top spender is IAC/InterActiveCorp, owner of Ask.com, Match.com, Citysearch and other companies that depend on buying long-tail search terms in bulk. Ask, in particular, buys lots of cheap keywords and remarkets them to advertisers bidding on like keywords.

IAC declined to comment on its search spending, but in its public filings says "a substantial portion" of its revenue is "attributable to a paid listing supply agreement with Google."

Other advertisers in the top 10, such as Amazon and eBay, buy massive amounts of keywords to direct traffic to specific items for sale or bid. Expedia and Priceline bid on expensive travel-related keywords. Microsoft Corp.is a big advertiser for many products and services, including its own search engine, Bing.

Since the rankings are for parent companies, AT&T's spending would include its Yellow Pages business as well as wireless service. In addition to wireless, e-commerce and travel, banking, car-rental companies and insurance are well-represented in the top 20. Private equity firm Blackstone Group is on the list in part because it owns Hilton Group and Travelport, parent of company of Orbitz.

The numbers don't include the fourth quarter, typically the heaviest for advertising in general and particularly for search.

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