The cost per click (CPC) on U.S. AdWords text ads rose on average of 26% across nine major industry categories between 2012 and 2014, per new research from AdGooroo. The Kantar Media company's data measured desktop and tablet for 2014, and desktop only for 2013 and 2012. No matter how the metrics are sliced, the findings show that marketers now pay more for search clicks compared with two years ago.
Since Q1 2012, brand marketers running campaigns for the legal and the automotive industries took the brunt of the increase. Advertisers paid an average of 50% and 45% more per AdWords clicks, respectively, compared with two years ago. Education paid 31%; health, 30%; telecommunications, 26%; home and garden, 22%; shopping and classified, 6%; travel, 15%; and financial, 9%.
The shopping and classified category rose from $0.72 to $0.77, whereas the legal category rose from $2.91 to $5.82.
AdGooroo compared CPCs on Google AdWords with the Yahoo Bing Network for the nine categories for only Q1 2014. On average, advertisers paid 45% more per click on AdWords than on Bing in the first three months of 2014. The legal category (at 70%) and the home and garden category (at 62%) showed the most significant difference in price between the two search engines.
Analyzing the numbers for the past 1.5 years, the Yahoo Bing Network fared a bit differently. AdGooroo analyzed CPCs from Q1 2013 to Q1 2014 based on their available data and found that prices in six of the nine categories rose 21% on average.
Education rose 65%; shopping and classifieds, 5%; and automotive, 3%. Telecommunications fell 30%; home and garden, 9%; and travel, 4%.
"There are a lot of ways to look at this," says Terry Whalen, managing director at Sum Digital, San Francisco, "but my view is that CPCs are a very unimportant metric, unless we can really isolate a decline in AdWords spend as being driven to a large degree by a decrease in CPCs" -- a tactic he calls rare. He agrees that CPCs rose for desktop only.
"Mobile CPCs have also risen, but of course if we blend the two, then the picture is different, since average mobile CPCs are a lot lower than desktop CPCs," he adds.
"At the end of the day, my opinion is that it makes zero difference what CPCs do," Whalen said. "The only thing that makes a difference is whether the channel works."