For the end of 2012, search advertising looked pretty great, at least according to results of a study performed by Adobe, the results of which have been released today. In these results we can see that paid search is still growing. Not only that, but Adobe gives us some insight into what they believe can be expected in paid search in the near future. There are some specific areas listed in Adobe’s results that represent the important findings from the study, and each main fact is another exciting insight for paid search marketers.
Since Q4 of 2011, growth in spending for paid search has increased by 16%. To provide a point of comparison, spending for paid search was up by 13% this time last year. As for market share, Google increased the size of its share from 85.9% in 2011, to 86.5% in the end of 2012. Meanwhile, Yahoo and Bing held 14.1% of the market share in 2011 collectively, and that number went down to 13.5% collectively in the last quarter of 2012. It is safe to say that Google sits pretty comfortably at the top, and will remain there.
According to Adobe, the growth in paid search ad spending is due to two very clear factors. The two factors that led to the growth included mobile traffic and, “the transition of Google Shopping from a free model to a paid model with Product Listing Ads (PLAs).”
In Q4 of 2012 smartphone and tablet traffic made up about 20% of all recorded spend impressions. What that means is that in a single year, the percentage of total paid search traffic that is made up by mobile traffic has doubled.
Tablets have gone up quite significantly in importance for paid search marketers. Adobe explains this in their report:
“While tablet retail campaigns have historically enjoyed higher conversion rates than desktops, they have had 30% lower Cost per Clicks (CPCs) than desktops. As a result, they enjoyed a 73% higher ROI than comparable desktop campaigns. Advertisers appear to have understood this opportunity as tablet CPCs rose significantly last quarter. Tablet CPCs are now 16% lower than desktops. Still, the lower CPCs on tablets represent an opportunity for savvy retailers.”
Product Listing Ads (PLAs)
The importance of PLAs in paid search for the final quarter of 2012 is perhaps explained best by a single bar graph within the company’s report. When comparing PLA ads to Standard Google text ads, one can see that ROI for PLA ads reached 104% of the ROI for the standard. CTR reached 134%, which shows just how significant the difference is. Finally, the conversion rate for the PLAs is at 105% of the conversion rate for the standard paid search text ads.
“It would be beneficial to retailers to note that PLAs played a significant role in the past retail season. As they gear up their campaigns for the coming year, online retailers should consider optimizing their PLA campaigns both from a bid and a feed management perspective.”