In its second-largest acquisition, Amazon buys the company for $970 million.
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Understanding how the goals of mobile searchers differ from PC searchers is key to mobile ad success, Buy.com's Luthi says. As mobile searchers are more likely to be looking for a store than desktop searchers, they also are more likely to want to buy at that exact moment, rather than to engage in product research, he says. The retailer's mobile search experiments have found that often what they want to buy from a smartphone isn't a $2,000 plasma TV, but smaller-ticket items, he says. That's why Buy.com generally promotes items priced at $75 and less in mobile search ads, Luthi says.
Short and sweet
Luthi also found that mobile users respond to paid search ads that include specific information, such as a model number and price. While mobile paid search ads allow the same number of characters as desktop paid search ads (25 characters with spaces for the headline, two description lines of 35 characters with spaces each and a URL limit of 35 characters), mobile consumers are more likely to have done research and already know what they want. Giving them all the information in the ad makes it more likely that they will have all the details they need to click on the ad and make a purchase, he says. There's also another reason to include those details—consumers don't want to read too much ad copy on smartphones' small screens, experts say.
Another wise use of mobile ad space is an urgent call to action, Bose says. "Your ad text can dramatically influence your ad's click-through and conversion rates, so make it catchy," he says. For example, he suggests not only highlighting promotions, but also their end dates. For example, an ad might read "30% off all winter boots. Ends 10/30!"
Small details can produce big results, he says. For instance, Bose has found that mobile paid search ads that include an end date followed by an exclamation mark have up to a 7% higher click-through rate on average than other ads. He also suggests retailers bid on shorter keywords for mobile ads. Mobile users typically enter fewer words, and the search query length is 30% less on mobile than on desktop, according to NetElixir data. In other words, a consumer is more likely to search for "red sweater" on a mobile device, whereas on a PC she might type "red 100% cotton sweater" in the search box, Bose says.
Melissa Parrish, interactive analyst at Forrester Research Inc., advises retailers to pay attention to these differences and create a mobile campaign that's entirely separate from their traditional paid search campaigns. In fact, Parrish adds that Google gives the same advice to advertisers about engaging mobile customers—that marketers trying mobile ads will be more successful with a mobile-specific campaign.
Victor Yacaman, e-commerce director for international intimate apparel retailer Leonisa.com, says he is careful to separate his desktop paid search efforts from mobile search campaigns. "Mobile behaves differently from desktops or tablets, and you should target mobile devices in a separate campaign so that you can easily adjust bids, monitor search queries, and make optimizations based on the performance from mobile devices only," he says. "In our case the mobile campaigns target mobile phones only. We have found that performance on tablets is more similar to computers than smartphones, so we target tablets and computers together and then smartphones in a separate campaign."
While mobile ads may have lower conversion rates, they also cost less. Yacaman, who spends about 9% of his total paid search marketing budget on mobile paid search, says he bids much lower on mobile search terms than desktop search terms. In June, the cost per click for smartphone paid ads averaged 49 cents, which is 37% less than the 78 cents paid per click for desktop ads, according to Marin Software.
"Right now there is less competition and the average cost per click is lower across mobile," says Yacaman, who uses ROI Revolution to manage his mobile and desktop paid search campaigns. That's because while retailers may be trying mobile paid search, they are still only allocating a small portion of their total paid search spend to mobile.
Still, with technology, anything is possible. Just as e-commerce—which didn't exist 20 years ago—developed quickly and now accounts for around 6.7% of total retail sales according to the Internet Retailer Top 500 Guide, mobile search ads are likely to increase. Just take it from Google CEO Larry Page.
"I'm amazed the computer that I'm carrying in my pocket is as good as the one I had a few years ago on my desktop," Page said in a conference call with analysts earlier this year. "And I think we're only at the very, very early stages of what's possible with those devices." Now it's up to retailers to listen to consumers and harness that power.