Google Got 97% of Search Spend Growth in Q4--SEM*

Henry Blodget | January 29, 2008 10:57 AM

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Leading search-engine marketing firm Efficient Frontier reports that Google captured almost all of the growth in the search spending by its clients in Q4 2007 vs Q4 2006. Yahoo, meanwhile, lost share, and Microsoft gained a modest amount.

What does this mean, exactly?
  • Overall search spending by Efficient Frontier clients increased 29% year over year.
  • Google captured 97% of this incremental growth.
  • Microsoft gained 6% of the growth.
  • Yahoo's spending shrank 3%.
Also:
  • Google's share of search spending in Q4 of 2007 was 77%.
  • Advertiser ROIs improved 13% across all three properties (good news for future price increases).
  • Yahoo ROIs jumped 39%, thanks to Panama.
  • Microsoft's ROI rose 7%
  • Google's ROI rose 8%.  However, Google's huge volume still allowed it to capture all but a few points of spending.
*In the original post, the ROI improvement for Microsoft was wrong.

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Henry Blodget said:
LeeAnn,
Thanks for the clarification. Will fix in post. Was having hard time figuring out the math, which seemed to suggest Google's ROI flat or negative.
LeeAnn Prescott said:
Hi Henry - Thanks for covering our research. Just one point of clarification on the data: MSN's ROI was 27% greater than the average ROI across the three major engines in Q4 2007. MSN ROI improved by a more modest 7.4% when comparing Q4 2007 to Q4 2006. ROI on Google improved 7.5% in the same period.

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