The CEO of Efficient Frontier, one of the world's leading search-engine-marketing firms, confirmed that spending on Google was weak in January and February. In an interview with e-consultancy, CEO James Beriker said that Google's January paid click fall-off was NOT a blip (GOOG). On the positive side, Beriker says, spending has picked up again modestly in March.

In terms of trends we have seen in spending, we saw our financial services clients pull back a little bit in January, more significantly in February, then come back into the market with more dollars in March.

Our suspicion is that the pullback was really about them figuring out how to deploy those dollars, and how they might change their product mix or develop new products that would be more suitable to the kind of market we are seeing in the US.

The good news is we have seen some growth over February in March and by all indications it looks to be improving again in April.

Q: Do you see Google's reported flat click growth in January as a blip then?

It's hard to say at this point. I wish I could tell you that it was a blip, but we work with some of the larger financial services companies and our feeling is they pulled back on budgets to assess what was happening.

Our thinking is they are retooling and taking a hard look at their product mix as they have to stay in business somehow.

They are figuring what users they are looking for, what is the product that is most likely to resonate with consumers given what is happening in the marketplace, and what are the best channels to acquire those consumers.

Efficient Frontier has previously released data supporting these trends, but this is the company's frankest acknowledgment to date that client spending on Google was weak in January and February.

Other SEM reports have been more positive. Between the startlingly poor Comscore paid-click reports and anecdotal data like this, however, we find it hard to believe that Google is not seeing at least some weakness in Q1. Analyst estimates for Q1 have come down, but we expect full-year estimates have to drop further. It's hard to imagine how the stock will mount a sustainable recovery in the face of this.

See Also:

Google Hits New Low on Crappy February SEM Reports

Google Estimate Cuts Coming Soon to an Analyst Near You