Today, we release our highly anticipated quarterly State of Digital Marketing Report for Q4 2011, now in partnership with Context Optional. These joint reports – with Efficient Frontier’s robust data in the digital marketing industry and valuable insights from the Context Optional customer index – have been an incredible resource for current industry trends and future outlooks. This quarter, we saw some interesting and some expected trends. Search spend significantly increased, particularly among retailers, with the holiday season dominating the quarter. In social, Facebook spend share reached 2.7% of biddable online advertising spend in Q4. Increases in social spend are coming from new ad budgets rather than subtracting from existing search or display budgets, demonstrating the growth and importance to digital marketers of search, display and social throughout 2011. Brands continued to acquire fans at a 9% rate per month.

Other key highlights in the Q4 report:

SEARCH SPEND increases 14% YoY in the United States and 19% YoY in the UK as retailers spent aggressively in Q4. US spend in retail grew by 18% YoY and 40% QoQ and UK retail spend grew by 10% YoY. This indicates a consistent seasonal ramp up in Q4 and resulted in a strong fourth quarter overall. Retail ROI YoY remained steady.

GOOGLE MAINTAINS 80% SPEND SHARE in Q4. Yahoo/Bing clicks yielded 14% more revenue per click (RPC) than Google while also having 9% more Return on Investment (ROI) than Google. Yet, Google increased click share by 2.5% YoY indicating the necessity for volume and reach from advertisers, primarily retailers, in Q4.

MOBILE SPEND specifically tablets, is becoming increasingly important for marketers as tablets accounted for 50% of mobile search spend and 50% of click share.

GOOGLE assumed 96% of mobile search ads. Yahoo/Bing accounted for just 4% of mobile ads.

DISPLAY SPEND remained flat QoQ. However, Google’s Doubleclick increased exchange display market share by 19% YoY. Due to both inventory constraints and shifting strategies by Yahoo for their Right Media Exchange, Google extended significant share gains in biddable display.

EUROPEAN MARKETS showed strong growth in search spend YoY. France increased search spend 70% YoY and Germany 47% YoY indicating heavier investments into online advertising in 2011. The UK lead the online marketing industry in Europe and continued to increase search spend 19% YoY.

To get the full story, download our State of Digital Marketing Report for Q4 2011.

- Siddharth Shah
Senior Director, Business Analytics, Efficient Frontier

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