Search Converting Across Multiple Channels Leads To Higher Clicks, Lower CPCs

Increased traffic across mobile devices in Q2 prompted marketers to spend more for mobile search ads on smartphones and tablets -- shifting costs per click, especially for Google, according to a study published Wednesday.

The study shows that costs per click on Google continue to decline, falling 13 percentage points, while Bing and Yahoo CPCs declined sequentially to end the quarter flat, according to the Adobe Q2 2012 Global Digital Advertising Update.

The study cites the decline in overall Google CPCs to an increase in share of mobile clicks, where CPCs are less expensive. The decrease in Bing/Yahoo CPCs is attributed to changes in the finance sector, where CPCs dropped considerably during the prior quarter.

While Google's CPCs dropped because of mobile traffic, the overall click volume rose 32%, compared with the year-ago quarter. "The average consumer is using multiple devices before converting, so the average conversion length has increased and, as a result, the value of a click on average for the advertiser dropped, though the volume of clicks increased," said Sid Shah, Adobe director of business analytics. "Advertisers are willing to pay less per click, but buy more clicks to make the conversion happen as the consumer uses more channels and more devices to make purchases."



Overall, tablet conversion rates rose 20 percentage points higher than those of PCs. Likewise, smartphone conversion rates were significantly lower across the board, with overall conversion rates approximately 42 percentage points lower than PC conversion rates.

U.S. search spend grew 13% in Q2 compared with the year-ago quarter, while ROI rose 23%, according to the report.

Marketers spent more in Q2 for search marketing, about 18% in the United States and 12% in Germany, compared with the year-ago quarter. Yahoo gained 1% market share, and Google declined 1% in the quarter.

Google's sequential click volume fell slightly, but rose 32% compared with the same quarter in the prior year. The click volume from the combined Bing and Yahoo alliance rose 26%. This sequential "surge" in Bing/Yahoo's click volume may be due to algorithmic changes and lower CPCs, as the alliance gains market share lost to Google in the prior two quarters.

By the end of Q2, market click volume share for Google and Bing/Yahoo were 81.5% and 18.5%, respectively.

The study forecasts better days for search in the United States during the second half of 2012, but not Europe. Adobe analysts expect marketers to spend between 10% and 15% more, compared with the prior year. In Europe, growth in search faces challenges, which may slow growth rates seen year-to-date. Smartphone and tablet traffic will represent 20% of all traffic from search by end of year, and Facebook brand pages will grow an additional 45% by the end of this year.

Next story loading loading..