The fourth quarter (Q4) showed strong growth, increasing 35.5 percent YoY with December leading the quarter at 44.8 percent YoY growth. The Q4 holiday season indicated improved consumer sentiment, with the average order value (AOV) up 31.3 percent YoY compared to a 13 percent decrease in 2009.

“2010 proved to be a great year for search advertising as the search market recovered from the downturn,” said Roger Barnette, CEO of SearchIgnite.

“Even more promising is the revival of consumer spend throughout the year and the strength of Average Order Values in Q4. We expect 2011 to be a strong year for search and online advertising overall.”

Other findings in the report include:

*Retail saw significant increases in search spend in Q4 (up 36.6% YoY)

*All other underlying metrics in Q4 show positive results with 20.6% YoY increase in clicks, 2.3% YoY increase in impressions and 17.9% YoY increase in click-through rates.

*Google’s share of advertising spend in Q4 increased to 82.6%, up from 80.2% in Q3. Yahoo/Bing accounted for 17.4% of Q4 spend.

 Bing saw the most spend growth, up 21 percent year-over-year, with market share gains of 6.4 percent in Q3 (up from 6.2% in Q2).  Yahoo saw a 10 percent decline in search ad spend over Q3, with market share falling to 13.4 percent from 15.4 percent in Q2. The report says the drop, along with gain in Bing, is partially due to testing occurring on the combined Yahoo/Bing search alliance.

Google continued to lead with 80.2 percent of U.S. search spend, up nearly 2 percentage points from Q2, and representing 7.9 percent year-over-year growth. This is the largest market share by Google since SearchIgnite began tracking search engine market share data in Q1 2007. The jump in size marks the largest quarter-over-quarter increase for Google since Q1 2009.

“Google continued to increase its dominance in the paid search market in the third quarter,” said Roger Barnette, CEO of SearchIgnite.

“However, the Bing/Yahoo! alliance is performing well for advertisers thus far, and marketers want to see a viable competitor to Google in the market. We feel that there is a real opportunity for Bing to capture significant market share in the near term if these early results continue to play out in the fourth quarter.”

What do you make of Bing’s increasing popularity?  Let us know in the comments section.

Or, to be more precise, "Retailers have spent 47% more on search ads on Bing in Q4 this year than during this same time period in 2008," according to SearchIgnite.  "Compared with Google and Yahoo!, Bing also saw better YoY click volume growth."

Additionally, "[a]verage order values on Bing are 21% higher than across all engines, which could account for the spend growth."

Impressive, right?  It’s only when you sort of step back for a moment that Bing’s achievements look less stunning.  That’s because, despite the progress Microsoft has made, exactly 75 percent of advertisers’ dollars went to Google during the first part of this quarter, and 16 percent headed to Yahoo.  Bing grabbed just 8 percent.

Still, some headway is better than none, and retailers are demonstrating a lot of confidence in Bing by giving it a try during the all-important holiday season.

Will retailers benefit by paying more attention to Bing?  Have your say.

Related Articles:

> Microsoft Takes Users Behind Bing

> Bing Gets A Bunch Of New Search Features

> Some Bing Users Seeing Latest Posts On Publisher Searches

"This is the second consecutive quarter of sequential growth for paid search spend, indicating marketers’ continued confidence in search marketing as an efficient component of their overall marketing mix," said Roger Barnette, President of SearchIgnite. "Multi-channel retailers in particular have continued to rely more heavily on paid search as a key driver of sales in a challenging economic environment."

According to the report, Bing saw the most pronounced growth in spend among the top three search engines, an increase of 15% year-over-year (presumably compared to Microsoft Live Search). Yahoo, on the other hand, was down 24% year-over-year.

The report also states the obvious,  that there was no movement in search share, as far as rank, but year-over-year, Yahoo lost share to Google, while Bing showed "little" growth.

"Microsoft is headed in the right direction with Bing and attracting more advertiser dollars. That said, it’s an uphill battle against Google and there’s still a long way to go before Bing garners a significant amount of the search ad revenue pie," said Barnette.

More information about paid search spend for the quarter can be found in the report. SearchIgnite says it manages over $350 million in paid search annually.

Consumers continued to convert online at a steady rate, although they spent 10 percent less on average per transaction compared with the prior year, according to a report from SearchIgnite.

Paid search spend by retailers is up on average for all of Q4, but a closer look at intra-quarter trends shows differences in retailer’s allocation of spend through out the quarter compared to 2007.

Retailers increased their paid search spend by 15 percent in October and 43 percent in November compared with the same months in 2007. This growth was reversed in December when retailers cut their search spend by 14 percent from December 2007.

Consumers also showed different spending behavior during Q4 as compared with a year earlier. Online transactions increased by 11 percent in October compared with October 2007. Even with heavy promotions by retailers around Black Friday/Cyber Monday, conversion rates fell slightly in November (-2%) before rising again in December (4%).

"Retailers were more aggressive with their paid search spend in the first half of the quarter compared with a year earlier in an effort to capture more consumer dollars ahead of the holidays," said Roger Barnette, President of SearchIgnite.

"This is evidence that the challenging and changing economic environment is requiring retail marketers to adjust their online marketing strategies accordingly. As such, tools for testing and understanding how both search and other online media are performing together will become increasingly important for retailers as they look to make more nimble, data-driven decision about where to allocate their media spend."
 

Spend from existing search marketing advertisers is up year-over-year in Q3 across all engines by 26.9 percent in the U.S., a small increase from the year-over-year growth seen in Q3 2007 over Q3 2006. Quarter-over-quarter spend growth was also strong and consistent with Q2 vs. Q3 2007.

Retailers increased their search spend over Q3 2007, up 1.5 percent year-over-year, but intra-quarter figures revealed that retail search spend is dipping. Q3 also saw a slight rise in conversion rates, although average order value is falling.

Google continued to increase its dominance in the search market capturing over 72 percent of search ad dollars. Yahoo! lost slight market share in Q3, but is up several points from Q3 2007.

"Paid search spend continued to hold strong in Q3, despite the economic climate," said Roger Barnette, President of SearchIgnite.

"The strength of this ad market in today’s economy suggests that paid search continues to be a highly profitable and efficient digital marketing channel for brands."