In the all good things must come to end category Efficient Frontier is reporting a 13% drop in paid search spending from their clients which tend to be the big players in the search universe. This number occurred despite an uptick in March.
This is the second consecutive quarter of this trend. Since the previous quarter happened during the holiday season there may be cause for some gloom and doom. The WSJ reports that Google is still doing well and is positioned to whether this storm. Efficient Frontier Chief Executive David Karnstedt stated
Advertisers were in many cases narrowing their keyword selection to search terms that deliver the best bang for their buck, while no longer bidding on less efficient keywords, whose company manages more than $750 million in annual search spending.
That last statement may be bad news to Google but not to advertisers. If this downturn, recession or whatever you want to call it, it only makes sense that people are going to be more frugal; companies included. The statement almost implies that until recently advertisers were just spending and spending and they left the hen house unattended.
So it appears as if there are more growing pains ahead for Google. No longer will advertisers readily shill out money for search ads just because it’s cool. In fact advertisers need to be more careful than ever since the measurability of the present day search ad allows for quick decisions to continue or not.
In the meantime, by not holding advertisers hostage Google protects their own back and looks good. I say this because despite this kind of news they are still posting big profits. We all sit back and wonder when Google will stub its toe. I hate to dissapoint you but you may be waiting for a long time.