latest data from Hitwise, paid search traffic has taken a major hit in the last year. While, according to Hitwise, about 9.84% of the search engine traffic it registered in April 2008 came from paid clicks, in the four weeks preceding May 9, 2009, this number declined by 26% to 7.25%. Hitwise registered this trend across all of the categories it tracks, with the sole exception of paid traffic to site in its education category, where paid search results increased slights from 1.39% to 1.45%.According to the
Paid clicks to major retail sites and travel agencies were down 20% and 25% respectively. Especially searches for brand names like "orbitz" (which went from 46.35% to 35.75%) or "walmart" saw strong declines in their share of paid clicks.
Searches for "home depot" registered one of the most stunning declines in paid clicks, as only 0.83% of searches went to a paid listing in the last four weeks, compared to just over 39% a year ago.
Recession? Or are Companies Getting Smarter About Search?
In part, this decline can be explained by the current economic climate, which has led many companies to reduce their search marketing spend. In its latest quarterly earnings report, Google noted that paid clicks across all of its AdSense partners only increased by 3% in the last quarter of 2008, though the search giant didn't release any detailed statistics about paid search traffic.
However, as Andy Beal points out, this reduction in spending on search could also mean that some of the large brands like Orbitz or Home Depot have simply figured out that, given that they are already the #1 search term for their respective brands, there is really no need to spend a lot on paid advertising.
As we reported earlier this month, some retailers have been shifting their budgets away from search-engine marketing and towards email and social marketing. At the same time, though, small number of companies are also looking at the current downturn as a chance to break into new markets, by expanding their spend on search marketing while their competitors are cutting back their spend in these areas.