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Small business advertisers spent on average $2,149 on search advertising in the fourth quarter of 2009, up 111% from $1,018 spent in the same period a year earlier, and up 30% from the $1,658 spent in the third quarter of 2009, according to a study by WebVisible based on its small-biz clients.


Advertisers also increased investments on keyword inventory: The average keyword count per advertiser, which represents root keywords (vs. individual bid units with geographic modifiers), increased to 67 keywords in the fourth quarter, up 21% from the previous quarter.

Below, other findings from the State of Small Business Online Advertising, which examined trends among WebVisible's US advertisers from the fourth quarter of 2008 to the fourth quarter of 2009.

Video capability was the fastest-growing website feature for small business advertisers: 19% of advertisers used video in the fourth quarter of 2009, compared with just 5% of advertisers who did so a year earlier.

Search Engine Trends

Google accounted for 56.4% of total search ad spend in the fourth quarter 2009, off 0.7 points from the same period a year earlier; Yahoo accounted for 26.4%, down 6.6 points; and Bing accounted for 10.5%, up 0.8 percentage points.

In mid-2009, some WebVisible advertisers began to move a portion of their search engine spending to Ask to take advantage of relatively lower cost-per-clicks; that move drove Ask's share of spend to 6.9% in the fourth quarter of 2009, up 4.5 points from the 2.4% recorded in the third quarter.

As a result of this manual change, share of spending on Google dropped by 4.5 points quarter over quarter (QOQ) while the share of spending allocated to Yahoo and Bing was unchanged.


Click-Through Rates

Click-through rates (CTR) have been steadily improving on all the engines for WebVisible small business advertisers:  Google's CTR improved 32% YOY in the fourth quarter of 2009, while Yahoo was up 123% and Bing was up 109%.

On a quarterly basis, CTR did not change significantly: Google registered a slight improvement in the fourth quarter of 2009, up 2.5% from the previous quarter, while Yahoo declined 23% and Bing dropped 3.3%.

Bing maintained the highest CTR, signaling how the soon-to-be implemented Microsoft-Yahoo search deal may benefit small business advertisers, according to WebVisible.


Looking for great digital marketing data? MarketingProfs reviewed more than 200 research sources and selected 64 of the best to create the Digital Marketing Factbook a 144-page compilation of data and 110 charts, covering email marketing, search engine marketing, and social media. Also check out The State of Social Media Marketing, a 240-page original research report from MarketingProfs.


Cost-per-Click

Overall, increases in CPCs—relative to increases in spending—were small across all the engines on a quarterly and annual basis.

Google continued to lead in CPC pricing in the fourth quarter 2009, up 12% YOY. CPCs on Bing and Yahoo were up just slightly QOQ—2.2% and 2.5%, respectively.

Ask, at one-seventh the cost of Google, registered the lowest overall CPCs in the fourth quarter 2009.

Conversion Rates

Conversion rates improved for small business advertisers: On average, 35.3% of clicks resulted in website conversion actions in the fourth quarter 2009, up 3.3 points from the 32.0% recorded in the previous quarter and up 8.7 points from the 26.6% recorded in the same period a year earlier.

Those actions are predominantly calls, but also include sending emails or SMS texts, form fills, printed driving directions, or video views, according to WebVisible.

Other findings:

  • In general, the newer a business is, the less it spends on advertising: Advertisers with well-established businesses, five or more employees, and in business for five or more years tend to spend more on advertising.
  • UK small business advertisers spent significantly less than US advertisers in the fourth quarter of 2009—an average of $183 per advertiser.
  • UK keyword portfolios were also much smaller—an average of 26 root keywords per advertiser.

About the data: Findings are based on data collected from over 12,000 of WebVisible's US advertisers from 4Q 2008 to 4Q 2009 who accounted for nearly $22 million in US small business ad spending in the fourth quarter of 2009.

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