Jan 112010

December Paid Search Benchmarks

Following the same basket of clients from my last benchmark post, December saw solid Year over Year sales growth of over 8% for the median.

Growth is good, particularly cost-effective growth, but the four month trend is hard to explain.

What happened in October? Might we conjecture that the first signs of economic growth spurred a certain amount of euphoria in consumer behavior? That theory might continue: consumers realized in November and December that economic growth and job growth aren't synonymous and that as the economy continued to shed jobs people tightened their wallets again.

An alternative hypothesis might be that the extraordinary promotions in October and immediately after Thanksgiving cannibalized sales that would have come in December otherwise.

January may prove which of these two explanations is dominant. If the first explanation is correct we'd expect the growth rates to continue to decline in January. December job losses surprised economists, and have created some talk of a slide back into recession. If the second explanation is more correct we should see an uptick from the 8% figure. Promotions may have shifted the timing of the YoY growth, but overall for this basket Q4 was up ~18 - 20% over 2008Q4. A return to those levels would certainly be welcomed.

Stay tuned!


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