Smartphones & Tablets Impact Paid Search

The fast adoption of smartphones and tablets like the iPhone and iPad is rapidly changing the way consumers interact with search engines, impacting paid search campaigns. Campaign management software provider Marin Software published a white paper, State of Mobile Search in the U.S., revealing smartphones and tablets will soon account for 25 percent of ad clicks in Google’s network by the end of 2012 − a big increase from 5 percent of mobile clicks on Google in January 2011.

This free report outlines key mobile trends, projections and optimization strategies for mobile advertisers that want to get the most bang for their paid-search bucks. The report highlights include:

  • Clicks on smartphones and tablets are growing exponentially: what to expect in 2012
  • Mobile device performance (CPC, CTR, and Conversion Rates) can vary significantly across devices: benchmarking search performance across devices
  • Optimizing the performance of your mobile search campaigns: 6 ways to optimize for successful mobile search campaigns

Click through rates on mobile phones are 72 percent higher than on desktops, and tablet clicks have a lower cost per conversion, according to the report. The fast adoption of mobile devices and changing user behavior are driving the growth of paid search clicks via mobile devices.

Mobile Adoption Drives Clicks

The report refers to 2011 as a watershed year for mobile search, with a 7 percent increase in clicks on mobile devices (from 5.3 to 12.3 percent) as a share of all Google ad clicks from January to December 2011, as shown in the chart below. In the span of 12 months, Google’s share of clicks from mobile devices increased by 132%.

 

Mobile Ad Budgets

Ad budgets on mobile devices increased even faster, as advertisers raised their mobile search spend (share of search budget) from 3.4 to 8.7 percent, a 156 percent increase.

Based on the chart below showing the percentage of tablet clicks as a percentage of all mobile clicks (from 31.6 percent to 37.9 percent from July to December 2011), Marin predicts tablets will account for 45 percent of all mobile clicks by December 2012.

 

When it comes to allocating budgets across tablets and smartphones, the report states this “…can depend on an advertiser’s industry, audience and geography.” So without this precise data, the report suggests the fraction of clicks from tablets vs. total mobile clicks can be used to estimate the percent of search budget to allocate to tablets.

Performance: Desktops Vs. Smartphones/Tablets

In comparing paid search ads performance on desktops vs. smartphones or tablets, Marin found that desktop ads actually have the lowest CTR (2.39 percent) compared to tablets (3.12) and smartphones (4.12 percent), as shown below.

Smartphones had the lowest cost per click, at $0.53. Tablet ads cost, on average, $0.63 per click, while desktops were highest at $0.83, as shown below.

However, smartphones didn’t convert as well with an average conversion rate of 2 percent  compared to 4.9 percent on tablets and 5.2 percent on desktops, as shown below.

Given their great CTR, low CPC and a conversion rate nearly as high as on desktops, tablets demonstrated the lowest cost per conversion ($100). Desktops average 25 percent more per conversion, while smartphones average 206 percent more, as shown below.

Best Return on Ad Spend

Which device delivers the best overall return on ad spend (ROAS)? Marin’s research shows tablets lead­ the pack when it comes to price/performance. Tablets had the lowest cost per conversion, followed by desktop comput­ers (25% higher) and smart phones (106% higher). While tablets are not yet as commonplace as smart­phones, they certainly deliver a winning combination of price and performance when it comes to paid-search. Advertisers are well advised to develop their mobile advertising campaigns taking this information into consideration.

 


Author:  Claudia Bruemmer

Claudia Bruemmer is a contributor to the TopTenWholesale Newsroom. Experience includes: Copy Editor SearchEngineLand (2012-present), Managing Editor ClickZ (1998-2001), Editor SearchEngineWatch (2007-2008) and freelance writer/editor since 2001 for SEMPO, ImediaConnection, SearchMarketingStandard, SearchEngineGuide, BruceClay and other sites. Prior to online work, Bruemmer was a Tech Writer for many years.


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