Google takes the leads in CPC inflation

Web Pro News have reported on an Efficient Frontier study undertaken between Q4 2006 and Q4 2007 into the performance of search advertising on Google, Yahoo and MSN.

Key findings show that Google took 97% of all ad spend increases between the two periods

Thanks to increased competition and a change to the AdWords algorithm in August, top positions have become costlier in terms of CPC bid prices. In fact, Google led the other two search engines in CPC inflation last year as CPC prices spiked 22%, half of which occurred in Q4 following the AdWords algorithm update.

The AdWords algorithm update did not appear to have an effect on click-through-rates, which remained steady in 2007 until a 12.5% increase in CTR in Q4 2007. Google penalising sites with poor landing pages is thought to be a direct factor in the increased CTRs.

Both Yahoo’s and MSN search advertising is flagging. Whilst both saw improvements in ROI with MSN leading on both Google and Yahoo in terms of CTR and ROI, neither performed well in terms of overall results due to much lower search volumes.

You can read the full article at Web Pro News.