26% Higher: Paid Search Growth Fueled by Mobile, Product Ads
Marketers are spending 26 percent more on paid search this year, if they're anything like search and digital marketing agency RKG's clients. The Charlottesville, Va.-based agency, a Merkle company, released findings comparing Q3 2014 results with those from Q3 2013.
"Paid search spending across all engines rose 26 percent, [year over year], in Q3, driven primarily by volume gains—as Y/Y click growth improved to 19 percent," the RKG study found. "Average cost-per-click was up 6 percent Y/Y, a slight deceleration from Q2 levels."
Ginny Marvin of Search Engine Land characterizes it as "no surprise" that mobile devices and product listing ads are prompting the increase. In her Thursday article, "RKG Q3: Paid Search Ad Spend Surged 26 Percent Y/Y," Marvin summarizes the research in breakouts of "Google AdWords: clicks volume and CPCs rise," "Bing ads: mobile drives volume, keeps CPCs flat," "product ads keep growing" and "mobile spend share rises."
- While mobile's share of paid search only increased 5 percent, "Smartphones and tablets combined to capture 28.4 percent of advertiser spending on paid search ads in Q3 2014, up from 23.9 percent a year earlier. Due to having lower average CPCs, smartphones accounted for 9.4 percent of spending compared to 19 percent for tablets."
- "PLAs contribute 27 percent of Google paid search clicks ... One of the bigger questions going into the holiday shopping season is whether we will see another large shift from text ads to PLAs this year."
- Smartphones provided a larger boost to growth than in recent quarters, due to advertisers passing the anniversary of the Google AdWords transition to Enhanced Campaigns, "a time when many sites pulled back heavily on smartphone bids to improve return on investment (ROI)."
The RKG research and Marvin's article do provide many clues regarding the reasons for the changes, but leave out one possible reason for the problem with mobile marketing ROI that research from IBM may provide.