SMB PPC Ad Spend Not Looking Good: Palore

December 10th, 2008

Noa Gertin at Palore just pinged me with some real happy talk kind of news.  According to their data, which they get from crawling local search sites, the search engine advertising spend for SMBs took a 50%+ hit in Sept/Oct 2008.  Noa, if you’re reading this, how do you know this is SMB spend and not just overall ad spend?  (e.g. if a few big brands which make up a nice chunk of overall spend cut their budgets, it could make it look worse than it is for SMBs if you are not breaking them out)

And here’s an eerily similar graph of NASDAQ performance to really cheer you up.

Tags: Small Business Marketing

6 responses so far ↓

  • 1 Stever // Dec 10, 2008 at 2:54 pm

    Over on Mike Blumenthals blog he said that they pulled out national brands and other SMB’s with more than one location. So should be reflective of SMB’s and not just overall ad spend

    My own unscientific survey, a small list of clients, I see similar results, though not due to advertisers cutting back so much as demand on the search side has dropped significantly. Search volume is down a bit and click through rates are down too. On top of that, conversion rates are down too.

    Bid prices are still the same(ish) but overall spend is down simply because there are fewer clicks happening.

    Andrew, I’m not so sure comparing the SMB ad spend to the stock market indexes really says much. You’re ignoring the initial decline in the markets that began in Oct/Nov 2007.

  • 2 Andrew Shotland // Dec 10, 2008 at 3:40 pm

    Noa Gertin confirmed that they had indeed filtered the info correctly.

    Stever, point taken, but the graph doesn’t show what happened to SMB spend in Oct/Nov 07. While the dip in the market this past fall may not directly correlate with the drop in SMB spend, they are certainly related in some way.

  • 3 Stever // Dec 10, 2008 at 5:57 pm

    No we don’t see what ad spend was doing but based on the 50% increase from June to August I bet PPC ad spend was still in a steady clip upwards through last winter and spring, as the intertubes were flush with talk about “Local”.

    Stock markets topped out first as they can be an early indicator of things to come. The smart money saw that the credit bubble was bursting and began pulling out. Consumers and small business don’t start reacting till well after they realize something is going on.

    What I saw from one of my bigger PPC clients was a rather sudden and deep contraction in consumer interest and spending as soon as the whole $700 billion bailout news hit the airwaves. And it’s persisted since.

    There is likely a bit of a seasonal component mixed in there too as, I think, the vast majority of local SMB spend is in the service industries, not so much in retail, and most services are more active in spring/summer months. I got nothing concrete to back that up though just my observations.

  • 4 Online Marketing Blog » Blog Archive » Friday Recap // Dec 14, 2008 at 12:11 am

    [...] If you’re really looking for evidence of an improving economy (if such a thing exists) how about e-commerce spending this holiday season? There was a seven percent year-over-year increase in online spending last week which made up for the four percent drop in sales this November. Overall, online consumers are spending about the same amount as last year. Search advertising is up this quarter, although the ad spend is apparently not coming from the small business sector. [...]

  • 5 Agressive Online Ad Grabs Spreading to Canada | Stever.ca // Dec 30, 2008 at 8:44 pm

    [...] The web has been flush with various reports of major online advertising networks getting far more aggressive to prop up their revenues as the current economic crisis causes online ad spends to decline. At the local level we saw ad spend decline for small businesses too. [...]

  • 6 Banner Advertising // Oct 29, 2009 at 5:15 pm

    … This is definitely not good for the Advertising industry..

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