SOURCE: Covario, Inc.

Covario, Inc.

October 05, 2010 09:00 ET

Covario Sees 20 Percent Uptick in Search Spending Among Tech Clients, Now Expects 18 Percent Growth for Year

Google Instant Already Having an Impact on Paid Search Results

SAN DIEGO, CA--(Marketwire - October 5, 2010) -  Covario, Inc., one of the nation's largest independent providers of search marketing software solutions and agency services, today issued its quarterly Global Search Spending Analysis, reporting that paid search advertising among its high-tech and consumer electronics clients was up nearly 20 percent over the previous three-month period, and a whopping 47 percent higher than the third quarter of 2009 during the heart of the Great Recession.

Covario now expects paid search spending for 2010 to increase by 18 percent over last year, which is at the high end of the company's original forecast as its clients indicate continued bullishness for spending growth in the fourth quarter.

The author of the report, Craig Macdonald, senior vice president and chief marketing officer of Covario, said the immediate impact of Google Instant since its September launch has also been noteworthy during the period. The new feature, which extends key-phrase prediction technology to show real-time search results, has led to click-through rates that are up nearly 20 percent on the Google engine -- with the overall proportion of paid search clicks up by 4 percent at the expense of organic search.

Google, which continues to command the lion's share of paid search spending by Covario's tech clients with close to 74 percent globally, increased nearly 18 percent versus the prior quarter and was up 34 percent compared to the third quarter of last year.

The integration of Yahoo! and Bing, which included consolidation to Bing's algorithmic search platform in the middle of the third quarter, led to additional paid search spending on the combined platform as advertisers invested more to compensate for decreases in organic search ranking declines on Yahoo!.

Overall paid search budget increases on the "Bing-Hoo" platform were in the 5 percent range and Macdonald expects them to persist until the end of the year. The combined global market share of Bing and Yahoo! rose to more than 22 percent among Covario tech clients in the third quarter.

Globally, there were key developments in China and Japan during the third quarter even as the Asia Pacific region overall saw paid search spending grow 24 percent from the second quarter and 55 percent compared to the third quarter of 2009.

In China, Google and the Chinese government reached an accord on their dispute regarding censorship, after which Google re-entered the Chinese market directly (as opposed to through proxies in Hong Kong). Despite this recent development, Google has seen its market share in China decline from 69 percent to 57 percent since the same period last year, while the Chinese search engine Baidu has grabbed nearly 10 percent more market share in the region and now enjoys close to 27 percent of the paid search spending there.

Meanwhile, in another part of the Asia Pacific region, Yahoo Japan adopted the Google organic search algorithm instead of leveraging its sister company's relationship with Bing.

"This has not notably impacted paid search in Japan," Macdonald said. "However, we do expect -- like the switch over in the U.S. from Yahoo! to Bing -- budgets will increase for search advertisers for a three to six-month period as advertisers use paid search to overcome short term organic traffic disruptions."

In the Americas, Google continued to dominate with 72 percent market share, including 16 percent growth over the second quarter and 31 percent growth compared to the third quarter of last year. "Bing-Hoo" now has 27 percent share in the Americas. Bing in particular had its first increase in the market since the fourth quarter of 2009.

The Covario Global Search Spending Analysis encompasses all of the major search engines and is based on paid search spending by its high-tech and consumer electronics client companies. The analysis spans the first quarter of 2007 through the third quarter of 2010. The combined paid search advertising spending of the brands represented totals more than $250 million annually. All of the data was compiled using the Covario Paid Search Insight™ software solution. 

About Covario ™
Covario, Inc. is among the nation's largest independent SEM (search engine marketing) and SEO (search engine optimization) solutions providers, offering both software and agency services for paid and organic search management. Covario provides large global organizations with robust solutions for paid search advertising, organic search (SEO), social media and display advertising. Covario enables complex and distributed organizations to control their brand integrity; ensure budget transparency; and deliver quantifiable results across business units, distribution channels and languages. Headquartered in San Diego, the company's growing customer base includes some of the world's best known brands in technology, retail, ecommerce, financial services, consumer electronics, media, entertainment, publishing and consumer packaged goods. More information about Covario is available by calling 858.397.1500 or online at

Contact Information

  • Contact:
    Rick Clancy
    Sr. Director, Public Relations
    858-397-1500, ext. 1643 office