Kaufman Bros: Social ad spending is not hurting search

January 13, 2011: 10:18 AM ET

Search spending Q4 was strong, leading to an upside for Google, and 2011 ad budgets remain healthy.

Google (GOOG) watchers may want to take note of some research from Kaufman Bros. today.

The most interesting bit is that social ad spending may not be taking away from search ad spending:

At our online advertising dinner in November 2010, some [Search Engine Marketer] SEMs had mentioned that advertisers were giving them budgets earmarked for social. When asked if social ad spend was taking dollars away from search, our panelists were unanimous in their view that the spend is incremental, still experimental and is not hurting search spend in any way. They added that on social ad campaigns, it's very hard to get scale while maintaining a good ROI.

Also, some notes on mobile search spending and tablets, which are hard to classify:

  1. Conversion rates are much lower in mobile search than desktop search
  2. Currently 3%-5% of all search impressions are mobile (including tablets)
  3. 5%-7% of search budgets now dedicated to mobile (per Reprise Media)
  4. Mobile CPCs are now roughly 25% of desktop CPCs
  5. Tablet search behavior is more similar to desktop search than smart phone search
  6. Panelists expect Google to start breaking out tablet and smartphone keyword pricing over the next year or so, as opposed to the current practice of including it in mobile
  7. Mobile apps are not a threat to mobile search

I had heard from ooVoo's CEO that he was seeing higher CPC rates in mobile, specifically when geo-targeting was used.

And finally, Google Instant showed modest benefit to search volume, indicating that user experience has improved but, overall, Instant didn't affect revenue that much.

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About This Author
Seth Weintraub
Seth Weintraub

Google went from searching the Web to worming its way into nearly every facet of business and government. Seth Weintraub unveils where the company is going, who it's competing with, who it's about to compete with and how market forces push the company to veer or adhere to its Don't Be Evil motto. For 15 years, Weintraub was a global IT director for a number of companies before becoming a blogger.

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