Mobile Paid-Search Costs On The Rise, iProspect Says

Marketers will see an end to undervalued mobile paid-search traffic as advertisers expand mobile coverage to mirror consumer search behavior.  

Representing 1,300 Google AdWords accounts and over 176,000 active campaigns, Dentsu's marketing agency, iProspect, makes some predictions for 2017, unpacks fourth-quarter data, and analyzes meaningful trends for brand marketers.

The finding -- released Thursday in its Quarterly Paid Search Trends report -- suggests that this year marketers can expect to see an uptick in mobile search share resulting in higher mobile spend, an increase in mobile costs per click (CPC), and potential click-through rate declines as volumes increase.

If fourth-quarter 2016 data is any indication of the type of advertising environment that marketers can expect in 2017, get ready for visual and voice experiences on mobile. 

iProspect estimates 52.4% of all paid-search traffic came from smartphones devices in the fourth quarter of 2016, up from 38.5% in 2015. Desktop fell to 36.5% from 47.8% and tablets to 11.1%, from 13.7%, respectively. Mobile CPC rose 7% YoY, while CTR fell 12%, resulting from increased competitive bid pressure. As spending shifts to mobile, iProspect expects that CPCs will close the gap between mobile and desktop.

By the fourth quarter of 2016, mobile took 57% of clicks among iProspect clients. In the final quarter of the year, mobile CPCs came in 21% lower than desktop. Google's mobile-first strategy played an important role in the shift, along with the ability to set separate bid adjustments for mobile, desktop, and tablet, among other platforms like Expanded Text Ads.

Delivering a competitive mobile site experience and building an attribution and measurement plan that takes into account the different ways that mobile users interact with brands will be two critical components of a successful mobile-first approach in 2017.

Another key factor is PLAs. iProspect advertisers spent more on PLAs in 2016 compared with the prior year, and by the fourth quarter the agency saw its clients' budgets rise 40% and clicks 44% YoY. In comparison, advertisers spent 6% more on text ads in the fourth quarter.

iProspect estimates in the study that 61.3% of all shopping ad clicks came from smartphones devices in the fourth quarter of 2016, up from 49.9% in 2015. Desktop fell to 29.7% from 39.6% and tablets to 8.9%, from 10.4%, respectively.

The agency also predicts that marketers will take advantage of opportunities from Amazon and Apple in 2017, including additional refinement of audience segmentation and increased focus on opportunities provided by voice search and digital assistants. These interactions create a "zero UI" future, where searchers primary interact with audio.

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