Neiman Marcus names a new chief marketing officer and restructures staff to address the growing importance of e-commerce.
Mobile now comprises 25% of all paid search spending, split 60-40 between tablets and smartphones, a new report says.
Global paid search spending increased 25% year over year in the first quarter of 2014, propelled by a 135% increase in mobile paid search spending, according to an analysis of client data by search marketing agency Covario Inc. Mobile now accounts for 25% of total search advertising spend, it says. The total ad volume of paid search ads increased 16% year over year.
Compared to the fourth quarter of 2013, total paid search spending was up 7% overall, and up 35% on smartphones and tablets, Covario says. But mobile advertisers moved more of their spending to smartphones. Ads on smartphones accounted for 40% of mobile paid search spend in the first quarter of 2014 versus 34% in the fourth quarter of 2013, while spending on tablet ads fell from 66% to 60% of mobile search advertising spend.
Although Covario has theorized that the cost-per-click for ads on smartphones, tablets and desktop computers would converge, the data tell another story. In the first quarter, paid ads on smartphones cost 44% less than on desktops, compared with 47% less in the prior quarter. Tablets went another way—paid search ads on tablets cost 20% less than desktops in Q1, but 14% less in Q4 2013. Between Q4 and Q1, the cost-per-click on smartphones increased by 9% and remained stable for tablets, Covario says. The firm didn’t give a figure for the cost-per-click changes on desktop.
Regionally, the Americas saw the largest quarterly growth in paid search spending, with a 30% year-over-year increase in Q1 and a 5% increase from the previous quarter. In Europe, the Middle East and Africa, paid search spending in the first quarter was up 6% year over year and 13% quarter over quarter—an improvement from the region’s decline in paid search spending in Q4. In the Asia-Pacific region, paid search spending was up 26% year over year and 5% quarter over quarter. The growth in that region mainly came from a 21% increase in overall click volumes and a 12% increase in click-through-rates, says Alex Funk, director of global paid media strategy at Covario. Funk says a larger volume of ads, along with higher cost-per-click and click-through rates, all contributed to the increase paid search spending in the Asia-Pacific market.
Among search engines, Google Inc. maintained its lead. In Q1, it accounted for 84% of global paid search spending, 86% of ad impressions and 65% of clicks, according to Covario. The search engine especially dominated in Latin America, where it drew 95% of all paid search spending in the quarter.
Advertisers worldwide spent 25% more on Google paid ads in Q1 compared with the same period last year. That compares to spending growth of 10% on the Yahoo-Bing network and 4% growth on Baidu, China’s leading search engine. Globally, Baidu now accounts for 24% of the all paid search clicks, but just 8% of total paid search spending and 7% of total ad impressions, says Covario.
Globally, the overall cost-per-click of paid ads in Q1jumped 12% year over year and 3% quarter over quarter, Covario says. Funk attributes this modest growth to the “maturation of the mobile landscape” and new ad formats—such as Google’s Enhanced Campaigns, which combine desktop and mobile campaigns, and its Product Listing Ads (PLAs), which feature large product images on search result pages.
The number of advertisers using PLAs almost doubled from November 2012 to November 2013, and more than half of marketers—56%—are buying mobile PLAs, according to a recent survey of 89 search marketers from digital marketing company Kenshoo. 83% of marketers think the ad format, which includes images and prices, performs better than traditional text-based search advertising, Kenshoo says.
The Kenshoo report also reveals that 62% of marketers are combining their budgets for PLAs with their budgets for traditional paid search; while 29% are creating a new budget for PLAs, 6% are shifting money from other, non-search digital advertising to PLAs; and 1% are shifting money from offline advertising to those ads. The remaining 2% of marketers report that their budgets come from other, unspecified areas.
Those marketers may be rethinking their budgets again soon. Google last week announced plans to move away from PLA-specific advertising campaigns, instead requiring all marketers to manage those ads along with other Google paid search ads through a combined system it calls Shopping Campaigns. The shift will be mandatory by the end of August, Google says.