IgnitionOne

1. Online Advertising Report
Q2 2012
■ A report by digital marketing solutions firm, IgnitionOne
Follow us on Twitter: @IgnitionOne

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CONTENTS
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Paid Search
U.S. Spend Trends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
U.S Search Engine Market Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
U.S. Mobile and Tablet Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
U.S. Travel Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Look Forward
Facebook RTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Google Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
. .
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
About IgnitionOne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.

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EXECUTIVE SUMMARY
Q2 2012 brought with it a slowdown in growth across many search marketing
metrics. Bright spots in the quarter are seen in the travel vertical which saw
impressive gains as well as the strong continued growth in mobile search advertising.
■ US SEARCH GROWTH SLOWS IN Q2 – Search spend in Q2 was up 15.5% when compared to Q2 2011. At
nearly half the growth rate of last quarter, this represents a slowdown in growth of paid search spending. This
slowdown in growth of spend can be presumably blamed on the current weakness of the macro-economy
and softness of the retail vertical in the quarter.
■ YAHOO!/BING CONTINUES TO OUTPACE GOOGLE SPEND GROWTH IN US – While Yahoo!/Bing
impressions and clicks did not grow faster than Google, its CPCs and search spend certainly did. While
Google only grew 11.4% in spend, YoY, in Q2, Yahoo!/Bing grew 32.9%. As this growth is off a smaller base,
it did not translate into an increase in market share for Yahoo!/Bing.
■ US TRAVEL VERTICAL BREAKS FROM PACK AND HAS STRONG GROWTH – Continuing last
quarter’s trend there was impressive growth in activity and spend in Q2 compared to the same time period
last year. Travel impressions were up 61.9% and search spend among travel marketers increased 37.8% YoY.
■ CONTINUED INCREASE IN MOBILE ADVERTISING – US Mobile grew to 14% from 12% of total search
budgets with a huge 333% increase in spend YoY. The mobile search ads also had greater growth in
engagement as clicks grew 325% while impressions grew 130%.
www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.

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PAID SEARCH
U.S. SPEND TRENDS
In the second quarter of 2012, paid search spending grew at 15.5% YoY, representing a slowdown compared
to the increasing growth in the past two quarters (22.4% in Q4 2011 and 30.3% in Q1 2012). The YoY increases
in clicks were also smaller than the preceding quarter, up 13.2% (compared to 29.1% in Q1). Click through
rates were flat YoY ending an upward trend. Impressions, however, grew faster than last quarter with a 13.7%
increase YoY (compared to 7.2% in Q1).
YoY Search Spend Growth
by Quarter 2010-2012
YoY Search Spend Growth by Quarter
2010-2012
40%
YoY Change in Spend
30%
20%
10%
0%
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
© 2012 IgnitionOne
Total CPCs were up slightly YoY (2.1%) with Google CPCs continuing to decline (down 3.1%). This continued
decrease can be blamed on increasing reliance on mobile, which has cheaper CPCs as well as increasing
use of new ad formats which are generally lower PPC clicks. The decrease in CPCs seems to be slowing, and
was not as large as in previous quarters. Conversely, Yahoo!/Bing saw continued strong increase in CPCs
with a 24.3% jump, which is on par with last quarter. As we highlighted last quarter this can be attributed to
Yahoo!/Bing’s promoted best practices which led to greater competition in auctions through the increased
use of broad match keywords as a stepping stone for exposure across other match types.
www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.

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U.S SEARCH ENGINE MARKET SHARE
In Q2 market share shifted back towards Google holding 79.1% of share compared to Yahoo!/Bing with 20.9%.
While this is a smaller share for Yahoo!/Bing when compared to Q1, it represents a 1 percentage point increase
from Q2 2011. Yahoo!/Bing increased search ad spend by 32.9% YoY, which tops Google’s 11.4% growth. Again
we feel this is due to greater competition in auctions through the increased use of broad match keywords as a
prerequisite for exposure across other match types.
Quarterly Percentage of Advertising
Spend by Engine
Quarterly Percentage of Advertising
Spend by Engine
90%
80%
79.1%
70%
Advertising Spend
Percentage of
60%
50%
40%
30%
20% 20.9%
10%
0%
Q1 07
Q2 07
Q3 07
Q4 07
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
Q4 11
Q1 12
Q2 12
Google Yahoo! Search/Bing © 2012 IgnitionOne
www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.

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U.S. MOBILE AND TABLET TRENDS
A bright spot for Q2, mobile and tablet search advertising continues to grow at an enormous rate. Spending
on mobile search ads is up 333% YoY; impressions are up 130% YoY; and clicks are up 325% YoY. This is an
acceleration across the board over last quarter.
Mobile search holds 14% of total search advertising spend in Q2, which is an increase over the past quarter
(12.3%), continuing the growth of this channel. Tablet devices accounted for 60% of the total mobile search
advertising budget for the quarter.
Q2 Mobile Search Spend Share
by Device
Mobile
40%
Tablet
60%
Mobil Search Growth
Q4 2011 - Q2 2012
Mobile Search Growth
Q4 2011 - Q2 2012
300%
3.1%
200% 2.5%
100%
0%
Q4 11 Q1 12 Q2 12
www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.

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U.S. TRAVEL HIGHLIGHTS
The travel vertical’s search advertising continued from a strong first quarter with its second robust quarter
in a row. Travel search advertising spend grew 37.8% YoY, compared to 22.8% in Q1. Impressions were also
up 61.9% YoY, a significant increase in growth compared to Q1 (34.3%). A portion of this increase in spend
and impressions can be attributed to a growth in tablet and mobile search advertising efforts.
LOOK FORWARD
FACEBOOK RTB
Facebook recently announced plans for the introduction of real-time bidding (RTB) for advertising on its site.
This will allow for retargeting within the advertising Facebook inventory. This is a massive new inventory
source that will now be available to the market — possibly the biggest proprietary audience source. We feel
that this new advertising opportunity will quickly supplant all marketplace advertising within Facebook.
There are challenges with this new opportunity, however. The ad units are not standard IAB units and will force
advertisers to optimize for an additional creative. It is also yet to be proven if these Facebook ad sizes will
be successful for RTB. There is also disappointment that the data provided to advertisers does not include the
deep data owned by Facebook.
As a new opportunity, we estimate this will drive an incremental 12-15% in retargeting budgets and drive
display overall spends higher.
GOOGLE SHOPPING
Google has announced that its free product feed management service, Product Search, will soon transition
to a pure paid model, called Google Shopping, by Oct. 1st. This switch to a biddable media from what
was a rich source of qualified organic traffic for retailers, will drive an increase in budgets. As this will not
cannibalize current business, this represents a significant opportunity for Google.
For retail marketers, while adding cost, this change will allow for more control over product and
category listings.
www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.

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METHODOLOGY
This is one in a series of reports from IgnitionOne, which have tracked more than 88 billion impressions and
more than 2.1 billion clicks on Google and Yahoo!/Bing search networks, Google AdEx, and other display
networks from January 1, 2006 through June 15, 2012.
Other reports can be found at http://ignitionone.com/en/about/research-white-papers.php
About IgnitionOne
IgnitionOne®, the global leader in digital marketing For more information,
solutions, enables companies to integrate and centralize please visit
cross-channel marketing efforts within one platform, www.ignitionone.com
allowing for deeper insights and greater digital success.
On behalf of our customers, IgnitionOne currently scores
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media and website conversions using cross-channel
attribution modeling across search, mobile, display and
social. IgnitionOne’s solutions are powered by proprietary,
integrated technology: IgnitionOne’s Digital Marketing SuiteSM.
IgnitionOne powers more than $30 billion in revenue each year for leading brands, including General
Motors, Chico’s, Ann Taylor, La Quinta, Travel Guard and Fiat, as well as advertising agencies such as
MRM Worldwide and CyberAgent.
www.ignitionone.com | info@ignitionone.com | copyright ©2012 ignitionone, inc. all rights reserved.