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Covario Finds Global Search Advertising Finished Strong in 2013

Search Spend Accelerated With Double-Digit Growth in Mobile and Internationally

SAN DIEGO, CA -- (Marketwired) -- 01/15/14 -- Covario, a leading independent search marketing firm, today issued its Global Paid Search Spend Analysis for the fourth quarter of 2013, reporting that spending on pay-per-click (PPC) advertising by its global technology, consumer electronics, and retail clients rose 13 percent from the third quarter and 7 percent year-over-year.

Paid search advertising on mobile devices continued strong as spending grew 23 percent over the third quarter and 55 percent over the fourth quarter of 2012.

And while fourth quarter keyword pricing declined compared to the previous quarter, the average cost-per-click (CPC) increased 10 percent versus the same period a year ago.

According to the report's author, Alex Funk, director of global paid media strategy at Covario, "CPC pricing has been fluctuating over the past few quarters, something not surprising after the platform overhaul that Google AdWords went through at the midway point of 2013."

On a regional basis, fourth quarter search spending in the Americas was up 17 percent quarter-on-quarter and 9 percent year-over-year. For 2014, Funk recommends that advertisers budget for a PPC increase of 14 percent, emphasizing the opportunity in Latin America. He suggests allocating 80 percent of the regional ad spend to Google and 18 percent with the Yahoo-Bing network.

EMEA (Europe, the Middle East and Africa) experienced weaker overall search spend in the fourth quarter due to front-loaded 2013 budgets and an overall decline in CPCs. Quarter-over-quarter spending in the region declined 1 percent, while year-on-year spending was down 8 percent.

"On the flipside," Funk said, "ad effectiveness has been a major theme in the region and we saw a 60 percent improvement in click-through rates (CTRs) compared to a year ago."

While 91 percent of all search spend in EMEA is with Google, Funk pointed out that the largest growth in the region is with Yandex in Russia and Eastern European countries where it represents 7 percent of total EMEA paid search budgets.

Quarterly search spending in APAC (the Asia/Pacific region) grew by 5 percent over the third quarter, and by 21 percent year-on-year. Funk said this annual growth was driven by a 13 percent increase in CTRs and a 20 percent increase in click traffic.

In his analysis, Funk found that the Chinese search engine Baidu captured 20 percent of the fourth quarter APAC search budgets, with 75 percent going to Google and 3 percent to South Korea-based Naver. Baidu's industry low CPCs (80 percent less than Google), higher than average CTRs, and sustained investment combined to generate 55 percent of all clicks in APAC.

For 2014, Funk recommends that 85 percent of search budgets for the Chinese market be invested with Baidu. He said that Naver should get about 50 percent of the budget for the South Korean market, while the rest of APAC should be allocated with a budget split of 80 percent to Google and 20 percent to Yahoo.

Among the major search engines globally, Google continues to dominate with 84 percent of the world's paid search market share. Advertiser increases in fourth quarter spending with Google were up 7 percent from the same period a year ago. The Yahoo-Bing Network, which holds 8 percent of the global paid search spend market share, saw year-over-year quarterly spending grow 23 percent, along with a 6 percent gain from the third quarter.

Mobile search growth continued to soar tied to what Funk described as "astounding" numbers recorded for Android and Apple iPhone/iPad activations. Globally, mobile search advertising grew 23 percent in the fourth quarter of 2013 compared to the third quarter and 55 percent year-over year -- now representing 20 percent of total search spending worldwide. The mobile ad spend breakdown widened in the fourth quarter to 34 percent for smartphones and 66 percent for tablets.

The complete Global Paid Search Spend Analysis report is available as a free download from the Covario website at www.covario.com.

About Covario and the Global Paid Search Spend Analysis

Covario is a leading independent search marketing agency and software provider. This is the seventh year the firm has produced the Global Paid Search Spend Analysis, which now encompasses 28 quarters of data on the search spending patterns of its global technology, consumer electronics, and retail search marketing clients. These companies invest in paid search advertising with all of the major search engines in more than 45 countries. Covario was selected by OMMA magazine as the Search Agency of the Year a record three years in a row from 2011 to 2013. It was also ranked in 2013 by Advertising Age magazine among the nation's Top 10 search agencies. Covario offers a suite of SaaS-based suite of software tools for local SEO, mobile search, social media marketing, and enterprise search. Headquartered in San Diego, the firm has more than 200 team members globally, who are also located in Beijing, Chicago, London, New York, Phoenix, San Francisco, Sao Paulo, Seattle, Singapore, Tokyo and Toronto, among other cities around the world. The firm's growing customer base includes global leaders in technology, consumer electronics, financial services, retail, ecommerce, media, entertainment, publishing, and consumer packaged goods. More information is available at http://www.covario.com.

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