Marketers will need to clean up their campaigns this holiday season or risk wasting budgets. The cost for brands to advertise on Google Shopping rose 94% in Q3 2014, compared with the year-ago quarter, and 26% sequentially. Along with costs, click volume also continues to rise across all devices, but how much return on investments depends on their optimization skills.
3Q Digital's State of Google Shopping report for the 2014 holiday season breaks down by metrics and device to determine how its clients’ Shopping campaigns perform. The metrics analyze cost per clicks (CPCs), impressions, clicks, revenue, conversions, and return on ad spend (ROAS).
Mobile leads desktop in year-over-year and sequential comparisons. While clicks on desktops have declined and clicks on tablets show no significant change, mobile grew more than 300% in Q3 2014, compared with the year-ago quarter, and 50% sequentially.
Joe Kerschbaum of 3Q Digital, author of the PLA report, points to the extensive growth of PLAs on mobile as the most surprising result from the analysis. As smartphones become the primary device for much of the population the technology continues to change purchase habits, he said.
It will cost marketers more to reach customers on Google Shopping this holiday season. The sharp rise in cost per click highlights consequences of increased competition. CPCs rose 66% year-over-year and 50%, sequentially, in the quarter. Mobile CPCs rose, albeit slowly in Q3 2014, about 18%, and 30% sequentially. The sharp increase during the past few months signals increased competition, per the 3Q Digital analysis.
Google Shopping revenue has risen on a variety of devices, especially on mobile, where 3Q Digital admits to seeing 561% growth year-over-year and 113% sequentially. Only on mobile devices has revenue growth outstripped cost growth. Overall, Shopping revenue rose 33% year over year and 14% sequentially.
Overall, impressions fell slightly in the quarter, but the growth of mobile continues to stand out. 3Q Digital attributes the increase, in part, to the transition from PLAs to Google Shopping early this year. Impressions rose considerably year-on-year from Q3 2013 sample impressions: 7,872,085; Q3 2014 sample impressions: 9,995,290; but fell slightly sequentially.
3Q Digital suggests that marketers optimize mobile campaigns, look for bidding opportunities, and completely embrace new capabilities of Google Shopping, in addition to analyzing campaigns for bidding and cost-cutting efficiencies before holiday traffic rises.