Google will see its cash cow desktop search advertising business decline this year, as its mobile search business continues to grow legs. And while marketers spend more on mobile advertising, it's not clear whether that mobile advertising will pay off in retail sales.
Analysis released Thursday from eMarketer suggests that overall spending on desktop search in the U.S. will fall by 9.4% to $1.4 billion this year, while mobile search will climb 82.3% compared with the prior year, but data from PricewaterhouseCoopers (PwC) suggests that not all consumers are willing to click through from the ads to make a purchase.
Mobile context and timing will become increasingly important. It's more than relevancy, but rather context, per PwC. Only 22% of consumers would want to see ads targeted weekly -- most are between 35 and 49 years old, per a PwC survey of 1,000 U.S. participants that combines findings from focus groups and online listening campaigns.
The PwC survey, Mobile advertising: What do consumer want, findsthat 73% of respondents are either somewhat or extremely unwilling to share personal information on their mobile devices. Of the 69% who are open to receive mobile ads, the ads are preferred when the consumer is in a "leisurely" mode. Even relevant ads to personal interests do not directly translate to ad interest or engagement, with 71% of respondents choosing not to click through.
Regardless of whether consumers click through ads on mobile devices, marketers are willing to try by increasing mobile budgets. In fact, the increased spend on mobile search campaigns continues to close the gap with the amount that marketers spend on desktop search campaigns. Mobile search will reach $9.02 billion this year, compared with $13.57 billion for desktop search. Overall, U.S. spending on advertising served to desktops and laptops will decline 2.4% in 2014 to $32.39 billion, down from $33.18 billion in 2013, per eMarketer.
The eMarketer report notes that in 2013, 76.4% of the company's search advertising revenue came from desktop, but the firm estimates it will fall 66.3% this year due to a $770 million decrease in desktop search ad revenue year over year. Google's mobile search revenue will rise to $1.76 billion, contributing about one-third of Google's total search revenue. "Key contributors to Google's mobile search growth include its Enhanced Campaigns and Product Listing Ads (PLAs), both of which contributed to increased click share on mobile throughout 2013 and will continue to do so," per the report.