Efficient Frontier, however, is sticking to its previous projection that the search ad market will grow between 15 and 20 percent for the year, saying in its report that “weakness in the European economy might negatively affect Q3 2010, so we remain cautious.” Some additional details:

Like last quarter, much of the growth in the search ad market was driven by a jump in spending by retail advertisers. Efficient Frontier says spending was up 38 percent year-over-year among retail advertisers, a pace it said “far exceeds the typical modest quarterly rise.” It said that cost-per-click in the sector was up 18 percent year-over-year, indicating a “growing aggressiveness” from advertisers. The firm says it expects that sector’s strength to continue.

The travel and auto sectors were also up, although finance was down slightly.

As for the break-down among the major search companies, Bing’s share of total spending inched up to 6.4 percent from 6.1 percent a quarter ago. Those gains continue to come at the expense of Yahoo (NSDQ: YHOO) but not Google; (NSDQ: GOOG) Yahoo’s total share of spending dropped to 18 percent from 18.7 percent, while Google’s increased to 75.6 percent from 75.2 percent.

We’ll learn more about the state of the search ad market starting Thursday when Google reports its earnings. Analysts on average expect a 22.5 percent jump in sales.