Google Search Advertising Continues Growth

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By Paul Ausick Updated Published

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Wikimedia Commons (Lee-Sean Huang)
Ahead of the company’s second quarter earnings report after the bell on Thursday, Google Inc. (NASDAQ: 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. (NASDAQ: YHOO) and Microsoft Corp. (NASDAQ: MSFT) combine for the other 22% of search in the U.S., the U.K., and Germany.

The data comes from Adobe Inc. (NASDAQ: 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.

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.

Adobe noted:

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.

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.

ALSO READ: Will Microsoft Exit Search?

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Photo of Paul Ausick
About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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