Google ads cost more for UK advertisers

16 June 2009

LONDON: Clickthrough rates on paid-for search ads linked to brand names on Google have halved in the last year in the UK, while the average "cost per click" has more than quadrupled over the same period, research from the IPA Search Group has found.

Google's search ad revenues reached £1.6 billion ($2.6bn; €1.9bn) in the UK last year, and the company holds around an 80% share of the country's paid-for search market.

Based on data drawn from 12 agencies, and covering 47 brands, the IPA Search Group found that the average clickthrough rate on search ads hosted by Google has fallen from 40% in January 2008 to just 20% in March 2009.

By contrast, the comparative "cost per click" has increased in value from 6p to 29p over the same period, leading to concerns about the potential return on investment these ads offer marketers.

Arjo Ghosh, chair of the IPA Search Council and ceo of iCrossing, the digital marketing company, said search is still "a very effective way of getting people who are looking for your brand to your site."

However, he added that "the rising costs perhaps signify that we are becoming victims of our own success and that the market is just developing naturally and finding its point."

Data sourced from Brand Republic/IPA; additional content by WARC staff