Mobile paid-search clicks are forecast to surpass the overall paid-search market by mid-Q4 2015, but immature attribution methods continue to hold back marketers from spending more. The outlook looks rosy overall, but marketers cannot track what they can't see and measure.
Brands will spend more on mobile advertising than desktop by the end of 2015. The forecast -- based on 2014 data showing that search mobile click share rose 36% from 32% to nearly 44% last year -- estimates that paid-search clicks on mobile devices will surpass 50% of the overall paid-search market by mid-Q4 2015.
Attribution remains the biggest challenge. Brian Lee, Marin marketing research analyst and author of the report, believes that consumers convert more often than attribution technology identifies the conversion. "The industry has improved attribution, but there are still some kinks," he said. "There's always been an issue when consumers click on a mobile device, but convert on a desktop."
Globally, mobile search ad spend grew 8% last year -- peaking in November at just less than 48% of search advertising budgets, per the report. Mobile search spend share has not grown as dramatically as click share, but the shift reflected in Marin Software's benchmark report, Mobile Advertising Around the Globe: 2015 Annual Report, reveals that the global brands that push more than $7 billion in annualized ad spend through the vendor's platform are ready for a change.
Attribution needs improved tracking in order to mature. Conversions continue to rise on mobile devices, but marketers still cannot accurately track them. Mobile devices assist about 20% of all in-store conversions, $600 billion in total retail store sales, Lee said pointing to data from Deloitte Consulting. These were in-store sales, but mobile devices in some way assisted to the sale.
The cost per click will rise as mobile attribution becomes more reliable and accurate. "As mobile attributing becomes more accurate, we will see mobile cost per click rise and become closer or match desktop CPCs," Lee said.
Companies like Google are working on attribution and tracking for mobile campaigns. DoubleClick Digital Marketing will support third-party app tracking in early Q2. This means advertisers can track their in-app installs, app downloads from in-app ads, using supported third-party app tracker and attribute them to impressions and clicks for in-app ads run on DoubleClick Bid Manager and Doubleclick Campaign Manager.
The report reveals that consumers are more likely to use mobile devices for product research, and click on mobile ads, but ultimately make final purchases on desktops. Click-through rates on mobile search ads averaged 2.7%, while CTR on desktop search ads averaged 2.1%. Marin sees the same pattern in mobile social ads with a 0.6% CTR and mobile display ads with a 0.4% CTR.
For the most part, however, conversion still occurs on the desktop. Desktop search ads had an average conversion rate of 10.3%, while desktop social ads had a conversion rate of 1.1%, and desktop display ads had a 3.1% conversion rate. This compares with mobile conversion rates of 7.1% for search, 0.4% for social, and 2.6% for display.
Social mobile ad spend already takes more than 55% of advertisers' social ad budget going toward smartphone and tablet campaigns. About 62% of all social ad clicks come from smartphones and tablets. While Marin did not analyze mobile video ads, data from eMarketer reveals that smartphones and tablets accounted for 30% of all digital video ad views in Q3 2014.
Clicks on mobile display ads grew 60% in 2014, starting with 32% and ending at more than 50%. The majority of clicks on display ads came from smartphones and tablets by December. Smartphones took the majority of these clicks from desktops, nearly doubling in click share during the year. If these trends continue, by early Q4 2015, the percentage of clicks on display ads from smartphones alone -- not including tablets -- will account for the majority of digital display clicks, per Marin.