Marketers spent more on Bing and Yahoo in search during the final quarter of the year. Spend on Bing Ads and Yahoo Gemini grew 32% in fourth-quarter 2017, up from 6% growth in the third quarter. Bing Product Ad spending grew 43%, largely due to an influx of mobile traffic, according to Merkle's report released Thursday.
The Digital Marketing Report for Q4 2017 from Merkle, a Dentsu Aegis Network agency, shows that for paid search on Bing, click growth accelerated from 1% in third-quarter 2017 to 14% in fourth-quarter 2017. And CPCs jumped from 5% YoY to 15%, largely due to a mix shift to non-brand search ads, which carry higher CPCs than brand keyword ads.
Bing Product Ads saw its highest rate of spending growth in two years, as clicks rose 62% and CPCs fell 11%. The CPC decline was primarily due to a influx of mobile Product Ad clicks, which were more than seven times higher in fourth-quarter 2017 than in fourth-quarter 2016.
"For Bing and Yahoo, a big driver in the rebound of their combined performance was a major influx of traffic for Product Ads, particularly on mobile where Product Ad clicks were over seven times higher in Q4 2017 than in Q4 2016," said Mark Ballard, vice president of research at Merkle.
In a steady stream upward, Bing Product ads also produced 25% of retailers’ Bing search ad clicks in fourth-quarter 2017, up five points from the previous quarter and nine points from a year earlier. Bing produced gains, but Google’s PLAs passed the same click-share mark four years ago. Within the non-brand segment, Product Ads produced 41% of Bing search ad clicks.
Across all search ad platforms, paid-search spend grew 24% year-on-year (YoY) in fourth-quarter 2017, up from 22% growth in the third quarter. Click growth slowed to 9%, while CPC growth jumped to 14%.
Google did what Google does best. Marketers spend grew by 23% overall on Google for search ads, led by 32% growth for PLAs, while text ad spending rose 15%. Spend for ads running on smartphones grew 38%, while desktop grew 21%.
Mobile drove 56% of Google organic search visits in fourth-quarter 2017, whereas the share of Yahoo organic search produced by mobile declined. This makes the fifth straight quarter for declines -- but it fell by an amount that was larger than usual between third-quarter 2017 and fourth-quarter 2017, coming in five points lower at 42%. Mobile share of Bing organic search remained roughly flat at 18%.
Mobile phones produced 50% of paid-search clicks in fourth-quarter 2017, while tablets produced 8%.
Although phones first generated more than half of Google search ad clicks a year earlier, relatively low mobile click share on Bing and Yahoo kept phone share for all search ad clicks below the 50% mark until fourth-quarter 2017. Tablet click share slipped to a little more than 8% in fourth-quarter 2017, keeping combined phone and tablet click share steady at 59%, according to the analysis.
Google’s share of U.S. site visits driven by mobile organic search rose to 96% in fourth-quarter 2017, up 3 points from a year earlier. Across all devices, Google also saw a three-point share gain, garnering 92% of organic search visits in fourth-quarter 2017. Yahoo has seen the largest share losses in the past year, as it produced 3% of organic search visits in fourth-quarter 2017, down from nearly 5% in fourth-quarter 2016. Bing's share on mobile remained flat at 2%.
Between Google’s Customer Match, RLSA, and similar audience products, audience accounted for more than 30% of Google search ad clicks in fourth-quarter 2017, up 10 points from fourth-quarter 2016.
The study also suggests that Amazon's Headline Search Ads continue to drive the highest click-through rates in fourth-quarter 2017. The Amazon Headline Search Ads drove CTRs nearly five times higher than Sponsored Products, which are features below Headline Search Ads in search results. While prime placement of the product carousel-based Headline ads is the primary reason for such a CTR discrepancy, another factor is that there can be multiple Sponsored Product Ads per search, but just one Headline Search Ad, according to the research.
"Brands selling on Amazon see incremental sales coming from these ad units and are willing to pay for the traffic," Ballard said. "More brands are beginning to take advantage of these formats, which are still relatively new, every day, and those brands that have been bidding on these formats for several quarters are steadily optimizing and expanding their programs."
There's some seasonality at play from the third quarter to the fourth quarter due to holiday shopping, he notes.
While Amazon's Headline Search Ads drive the most CTRs, marketers still spend more on Sponsored Product Ads when it comes to spending their budget on Amazon. During fourth-quarter 2017, Sponsored Product Ads accounted for 85% of all Amazon search and product detail page ad spend, up from 80% in the third quarter.
Sponsored Products and Headline Search Ads are available for both first-party and third-party sellers, while Product Display Ads are currently available only to first-party sellers.