Mobile -- where search continues to gain greater importance -- will likely see bigger budget in 2016, as companies continue to shift search advertising ad spend from desktop. But it's still not all good news for conversions.
Marketers are expected to put more "new" dollars toward search compared with other formats, according to eMarketer, citing a report from AdMedia Partners. In fact, 2% of respondents plan to increase search spending by more than 30%, while one in 10 marketers plan to increase search spend by 20% or more. Some 16% have plans to spend at least 15% more, compared with 2015.
Many of the new dollars will go into mobile search campaigns. The industry began to see the shift in the later part of 2015.
Google’s Product Listing Ad format also continues to grow. Clicks on these image-based ads rose 62% year-over-year in the fourth quarter of 2015, and mobile drove much of the growth. Merkle RKG reports that clicks from phones rose 180% Y/Y in the quarter.
Conversion rates remain low, however, compared to desktop. In aggregate, search partner PLA traffic conversion rates came in at 48% lower than google.com PLA traffic in Q4, according to Merkle RKG.
Overall, U.S. retailers spent more on digital marketing from Nov. 1 through Dec. 25, among Kenshoo clients, compared with the same period in 2014. The biggest increase went to mobile search and mobile product listing ads, which rose 93% and 111%, respectively, year over year.
The higher investments reaped rewards for advertisers. Total U.S. search advertising revenue rose 15% in 2015, while U.K. search revenue rose 35%. Higher conversions were a direct result of revenue growth in the U.S., although the average order size remained the same, among Kenshoo clients.
Fifty-one percent of all paid-search ad clicks in the Americas and 55% in Asia-Pacific came from mobile devices in third-quarter 2015, per Kenshoo.
Some industry experts say the money will flow into Facebook and other social sites that are a little less complicated than search platforms. Search ads, while powerful, can become challenging for some types of businesses, especially for those in competitive niches or when selling something new that people aren’t searching for yet, according to Larry Kim, founder at WordStream.
This week, WordStream released a platform to support Facebook, which is basically a mobile application. Kim says Facebook ads let marketers create new demand for products and services before consumers start searching on engines. "You also can remarket to the people who found you from search ads as they browse Facebook," he says. "As a result, we think that Facebook ads greatly increase the ROI of search ads and vice versa."