WSJ: Search Advertising Runs into the Recession

http://blogs.wsj.com/digits/2009/01/19/search-advertising-runs-into-the-recession/

U.S. search advertising spending fell 8% in the fourth quarter of 2008 from the same period in 2007, according to a new study from search advertising firm Efficient Frontier, whose search industry spending index was flat for most of 2008. The study — which covers an undisclosed portion of the $750 million in annual spending the company manages globally — marks the first quarter of negative annual growth for its index in the several years Efficient Frontier has been gathering such data, says James Beriker, president and CEO of the firm.

The Efficient Frontier study also found that retail marketers increased their spending 9% in the fourth quarter, compared to 2007, lending support to Google’s theory that some customers will respond to the recession by leaning more heavily on search advertising, widely considered one of the most cost-effective advertising methods.

Some other highlights from the study:
Advertisers who spend less than $50,000 on search ads cut their spending by 23% year-over-year, while advertisers that spend more than $200,000 on search per month cut spending by 9% during that time. Purchases by advertisers who spend between $50,000 and $200,000 were relatively flat.
Finance and automotive advertising continued to deteriorate. Search-ad spending among financial advertisers fell 20% compared to the fourth quarter of 2007. Search spending from automotive advertisers declined 15% during that period.