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Online search spending slows in North America and Europe but keyword prices are rising says Covario

San Diego search agency Covario’s latest Global Paid Search Spend Analysis shows that spending on online search advertising in the second quarter of 2012 by its enterprise technology, consumer electronics and retail clients was up about 17 per cent over the same period last year, and five per cent above the first quarter of 2012.

Covario research analyst Charles Gaylord, who produces the quarterly analysis, says this is “a healthy growth rate, but still down compared to the sizeable amount of spending that has occurred over the last three quarters.”

On a regional basis, the Americas, led by the US and Canada, saw moderate spending growth in PPC (pay-per-click) ad spending of 15 per cent year-on-year and just one percent quarter-on-quarter.

In Europe, where paid search growth rates remained subdued at two per cent year-on-year and one per cent quarter-on-quarter, Gaylord says online spending trends are still recovering from last year’s economic slowdown. With macro economic pressures continuing in the region, Covario has revised the forecast it provides to brand marketers, suggesting that they now budget for nine to 12 per cent annual search spend growth against the 15 to 18 per cent forecast late last year.

The Asia Pacific region is where major opportunities for paid search investment continue to exist. Year-on-year growth is a steep 41 per cent, while quarter-on-quarter growth stood at 23 per cent.

The quarterly report, which regularly includes a cost-per-click (CPC) analysis of the major search engines, found that keyword pricing increased for the first time since the third quarter of 2011. Global competition among search marketers for keywords drove CPCs up six per cent since last quarter.

Looking ahead, Gaylord (left) says year-to-date search spending is still tracking on target at 19 per cent growth, and he expects on change in Covario’s original forecast of 18 to 22 per cent annualized growth for PPC budgets globally in 2012.

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