Why is Paid Search Down?

Paid Search Traffic Share Down 26%

Heather Hopkins A Senior Online Analyst at Hitwise US. writes

Hitwise data indicate that the share of search traffic coming from paid listings is decreasing at the expense of organic traffic. In the four weeks to May 9, 2009, 7.25% of search engine traffic to All Categories of websites was from paid clicks. This compares to 9.84% in the same four week period in 2008 - representing a 26% decline in the share of paid clicks. This trend is apparent across 16 of the 17 Hitwise parent categories (i.e. Automotive, Food and Beverage, Health and Medical, etc). The only category that didn't see a decline in paid traffic was Education, which received 1.45% of search visits from paid clicks compared to 1.39% last year. See full article here

Certainly advertising budgets have been slashed across corporate America which is in part responsible for the overall decline.

Outside of corporate budget woes Lead Discovery has seen a huge increase in dishonest advertising. From "free grants" to "Google Cash" to straight up lies for Credit Card and Foreclosure relief. This reality has been supported in many conversations I have had with my peers in the lead generation space.

It's an easy game for dishonest marketers to succeed at. If you publish a completely sensational and dishonest text ad it will be clicked on more often than its comparatively boring and honest neighbors. This results in a high CTR on networks like Adwords, Yahoo and Adcenter as well as a lower CPC. And if they lie on their ads there is little doubt their landing pages are just as misleading. Unfortunately, Google and the like will not monitor nor punish deceptive advertising. I don't believe they are ignoring it simply to make more money, but instead they are pushing it off because it is a slippery slope to making them a de facto arbiter of what is false and deceptive advertising. Or putting them in a position to have to legally defend each and every business they approve to run ads on their network. Leave that to the FTC they say.

In the mean time, companies like ours are getting penalized for telling the truth and putting forth honest marketing campaigns. Slowly we have pulled out of the CTR based PPC space opting for other methods of advertising where we can pay for placement, or have a longer ad to distinguish our marketing message from the scammers.

The economy may be having a significant impact on overall online ad spend, however deceptive advertising, click fraud and trademark infringement will continue to erode marketer's confidence in SEM until the SE's muster up the courage to take action against it.