Spending on paid search ads by U.S. retailers increased 24.1% in the first quarter of 2011 compared with the first quarter of 2010, according to a study from IgnitionOne, formerly SearchIgnite. The digital marketing company says paid search spending for all categories, including retail, travel and financial services, increased 12.6% in the first quarter of 2011 compared with the same period last year.

IgnitionOne based its findings on ad spending by more than 500 of its clients, including such retailers as Ann Inc. and Chico’s.

The study found that Microsoft Corp.’s Bing search engine accounted for 20.2% of spending in the first quarter, up from 17.4% from the fourth quarter of 2010, but down from 22.1% in the first quarter of 2010. Google accounted for the rest.

Retailers continue to test Bing ad campaigns in the wake of Bing taking over as the search engine for Yahoo sites in the third quarter of 2010, says Roger Barnette, president of IgnitionOne. “The real test for Bing is to see if its market share continues to expand,” he says. “Marketers need time to test the engine and understand what return on investment they can expect from it, before they’ll increase investments.”

IgnitionOne announced its new name this week. The company says it combines the search marketing services of SearchIgnite with the audience profiling and on-site optimization skills of Netmining, which was acquired by SearchIgnite parent company Innovation Interactive in 2008.