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Search Marketing Sees Strong Q4, Retail Spend Up Significantly

SearchIgnite and RBC Capital Markets jointly issue Q4 report evaluating performance & market share of the top engines

ATLANTA, GA – January 29, 2008 – Search marketing spend grew significantly in the fourth quarter of 2007, with the Retail sector showing particular strength in year-over- year spending growth on the engines. The findings come from a new quarterly study jointly released today from SearchIgnite, a leading search and auction based media optimization technology provider managing more than $250 million in paid search annually, and RBC Capital Markets.

Year-over-year growth for all existing search marketers was 26.6%, while spending in the retail sector increased 43.9%, suggesting that the retail sector continues to reap benefits from paid search. Not surprisingly, the retail sector had great momentum in the 4th quarter, with quarter-over-quarter spending increases of 72.0%. The report revealed other notable findings on the state of the search landscape:

Yahoo’s Q4 market share of media spend declined slightly over the prior quarter. The new figures reverse Yahoo’s previous momentum of growth reported in Q3. Google gained 1.0% market share in the 4th quarter.

The report also tracked a new metric, “Same Advertiser Spend,” which monitors the trends by seasoned search marketers who have been utilizing search for more than one year. In the fourth quarter, research indicates that Same Advertiser Spend is growing at a slightly slower rate than overall search marketing spend, suggesting that search is beginning to hit a maturation point for those who have been advertising with the medium for more than one year. As evidence of this, year-over-year growth by quarter as measured by Google media spend declined, with 75.5% growth in Q2 2006 to 2007, 34.5% year-over-year growth in Q3, and 24.4% year-over-year growth in Q4.

After a turbulent 2006, market share trends (as measured by media spend) between Google, Yahoo, and MSN stabilized in 2007, with remarkably little movement in relative percentage of media spending. Yahoo showed very little momentum with their Panama platform. While Google’s market share took a dip in the summer months of 2007, they rebounded in Q4 to hold at 74.8% of market. Google entered the year with 75.1% of the market share in Q1.

The study tracked more than 20 billion impressions and 320 million clicks on Yahoo, Google, and MSN from January 1, 2006 through December 31, 2007 across more than 500 marketers, all of whom are clients of SearchIgnite directly or via its sister company 360i.

"The strength in retail category ad spend evident in the SearchIgnite data suggests that search may not be as tied to economic forces, in the near term, as some people had feared,” said Jordan Rohan, Managing Director and Internet Analyst at RBC Capital Markets.

“It was a strong quarter for search marketers across the board,” said Roger Barnette, President of SearchIgnite. “While there was particular strength in retail spend, all industry segments that we monitor showed strong year-over-year growth.”

This is the fifth in a series of quarterly reports jointly released by SearchIgnite and RBC that tracks results across the engines. Previous reports include “Market Share Trends within the Engines and Their Impact on Brand Marketers,” “Yahoo Panama: Early Returns” and “Yahoo Panama and the Broader Search Landscape: A Q1 2007 Competitive Review,” copies of which can be found at http://www.searchignite.com/

About SearchIgnite
SearchIgnite is a powerful search management and auction based optimization technology that simplifies large cross-engine search campaigns, providing marketers and advertising agencies with one central platform for managing, optimizing and tracking complex keyword portfolios in real time. Marketers who use SearchIgnite have full transparency and control over their campaigns with flexible bid management capabilities including manual bidding, rules-based bidding and portfolio optimization. Through the use of advanced predictive modeling, SearchIgnite’s Portfolio Optimization Technology (SPOT) is able to continually update and adjust keyword campaigns, minimizing manual work while maximizing a campaign’s ROI. Leading marketers and agencies depend on SearchIgnite to simplify and maximize the performance of their paid search campaigns. SearchIgnite is part of Innovation Interactive, a digital marketing services company. For more information, please visit http://www.searchignite.com/.

About RBC
RBC Capital Markets is the corporate and investment banking arm of RBC and is active globally in debt origination, sales and trading, foreign exchange, infrastructure finance, structured products, metals and mining and energy. Its North American equity underwriting, sales, trading and research business dominates the Canadian market and supports a significant and growing franchise in the U.S. middle market. Bloomberg ranks the firm as one of the Top 20 investment banks globally. In terms of assets, RBC is the sixth-largest bank in North America.

Contact: Amanda Bird
360i
212-991-4346
abird@innovationinteractive.com

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