Small-business advertisers spent on average $2,231 on search advertising in the second quarter of 2010, up 159.7% from the $859 spent in the same period a year earlier, and up 1.4% from the $2,201 spent in the first quarter of 2010, according to a WebVisible study based on its small-biz clients.

Advertisers also increased investments on keyword inventory: The average keyword count per advertiser, which represents root keywords (vs. individual bid units with geographic modifiers), increased to 75 keywords in the second quarter, up 5% from the previous quarter.

Below, other findings from the State of Small Business Online Advertising for the second quarter of 2010.

Search Engine Trends

Spending shifted toward Yahoo and away from Google and Ask in the second quarter, while Bing remained flat: 

• Yahoo accounted for 29.7% of search ad spend, up 4.1 points from the previous quarter.
• Google accounted for 58.3%, down 2.0 points.
• Bing accounted for 10.8%, off 0.6 points.

Yahoo's share of spending increased 5.7 points, up 23.5% from the same period a year earlier.

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Click-Through Rates

Yahoo's CTR (click-through rate) improved 34.5% in the second quarter over 1Q10 levels, while CTRs for Google and Bing were down, 4.4% and 6.6%, respectively.

CTR was up on all engines compared with Q209 levels, led by Yahoo (up 47.1%), and followed by Google (up 28.0%) and Bing (up 15.0%).

Cost-per-Click

Relative to increases in spending, increases in CPCs were small across all the engines on a quarterly and annual basis.

CPC on Google increased 8.9% in the second quarter over Q209 levels, while Bing's increased 10.3% during that period. CPCs on Google and Bing increased QoQ, 0.2% and 9.8%, respectively, while CPCs on Yahoo were up 23.0%, both on a QoQ and on a YoY basis.

Conversion Rates

Conversion rates improved for small business advertisers: On average, 43.3% of clicks resulted in website conversion actions in the second quarter of 2010, up 22.3% from 35.4% in the previous quarter and up 39.2% from 31.1% in the same period a year earlier.

Users are taking advantage of additional website options provided by advertisers: Conversion activity more than doubled for form fills, video views, printed driving directions, and bookmarking during the quarter (vs. Q209 levels).

The percentage of clicks resulting in a phone call to the advertiser increased 29.0% over the previous quarter and 58.0% over the same period a year earlier.

Consistent with previous quarters, the most popular small business advertiser category in Q210 was attorneys, accounting for 9.2% of total advertising—and spending 21.0% more than other advertisers on average. General contractors and dentists followed, accounting for 7.0% and 6.1% of total advertising, respectively.

About the data: Findings are based on data collected from over 12,000 of WebVisible's US advertisers from 2Q09 to 2Q10 who accounted for nearly $23 million in US small business ad spending in the second quarter of 2010.