Winter may be just around the corner, but the return of consumers to the market makes it feel like spring.

Signs of optimism are everywhere.

On a trip to NY last week I noticed that the Sky Mall Catalog was a whopping 244 pages! Earlier this year the book was thinner than the safety instruction foldout. This shows that retailers have confidence going into Q4; there were more advertisers than they could list on the inside cover!

There were even exciting new products!

• The voice recognition grocery list organizer
• A portable microwave
• A telekinetic obstacle course
• A foot tanning machine, for golfers
• Seats from Yankee Stadium, and last but not least
• A “classic” LED watch from the 1970s — for those of you old enough to remember, correct me if I’m wrong, but didn’t those suck in the 70s?

The paid search data from our clients supports this optimism. We’ve looked at different baskets of clients, and studied median values for Year over Year performance. The numbers vary depending on the collection of clients, but for this group we looked at retail clients spending more than $20K per month on paid search.

These clients don’t budget search and haven’t materially changed their efficiency requirements. As such the Year over Year performance numbers are a pretty good reflection of consumer demand through paid search.

The median lines obviously represent medians: half of the clients in the data set were above that line half below. 100% means 2009 numbers equal 2008 numbers. 80% means 2009 numbers were 20% below 2008, etc.

Sales through competitive search ads (ie “non-brand”) which have been in the tank for clients responding to the market have over the last two months crossed into positive territory Year over Year, with October up more than 28% for most.

Categories showing particular strength were those tied most closely to the housing market. This kind of follows the forecast that the housing market would go into the tank first but also come out of the recession first.

What’s particularly interesting as we pull this apart: The volatility this year is only partly a function of the traffic quality. Conversion rates dipped some and have rebounded, but those variances are relatively small compared to the sales numbers.

The same is true of Average Order Values.

What the data makes very clear is this: the consumers are searching for products again. If we look at the raw volume of traffic through paid search ads, we see the real source of the variance.

Granted, this is partly a function of 2008 numbers falling off the table in October as the scale of the financial crisis became known. As the comps get weaker the 2009 numbers look relatively better.

Nevertheless, the bottom line is: Q4 is shaping up to be MUCH better than last year’s in paid search, and that should feel like a the first signs of spring for a great many folks this holiday season.