Ahead of the company’s second quarter earnings report after the bell on Thursday, Google Inc. (GOOG) continued to dominate the search market with a 78% of a three-country market and 78% of the U.S. market in the second quarter. Yahoo! Inc. (YHOO) and Microsoft Corp. (MSFT) combine for the other 22% of search in the U.S., the U.K., and Germany.
The data comes from Adobe Inc. (ADBE) and is based on data from Adobe’s own customers which spend more than $2 billion annually on search advertising and generate more than 2 billion ad impressions.
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Using the second quarter of 2013 as a baseline, U.S. search spending rose 9% in the second quarter of this year, 10% in the U.K., and 6% in Germany. Google’s market share by country in the second quarter was 78% in the U.S., 91% in the U.K., and 96% in Germany. Google’s hegemony in Europe is one reason that the European Union takes such a hard line against the company.
According to the Adobe data, 70% of U.S. paid search goes to desktops, down from 78% in the same quarter a year ago. Mobile phones and tablets account for 30%, but Adobe anticipates that the mobile portion will rise to 60% by the end of this year. In the U.K., mobile and desktop already claim 44% of paid search while Germany lags with just 27%.
In the U.S. tablet and mobile spending is about equal, with tablets getting 14.5% of the market and mobile phones getting 15.1%. Tablets are take nearly 25% of the U.K. search spending and just over 17% of Germany’s. Mobile phones get about 19% in the U.K. and 9.5% in Germany.
Advertisers are intent on reaching the right people at the right time with the right message at the optimum bid price to drive ROI/revenue. We expect to see a secular shift from keywords to audiences in the future where advertisers will be able to target audiences with personalized messages, with levers extending beyond keywords as a measure of intent.
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The research team also expects paid search spending to increase 10% to 12% for the rest of this year and the mobile/tablet share combined to reach 35% in 2014.
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