When Alphabet, Google’s parent company, reports first quarter earnings April 23, 2018, digital advertising agency Merkle estimates that Google Shopping will account for 60% of all Google paid search clicks for retailers. The platform now accounts for 60% of all Google paid search clicks for retailers
Overall, advertisers spent 20% more on a variety of Google ads year over year, driven by a 13% increase in the cost per click (CPC).
The amount Google paid search text ad spend grew 4% in Q1 after 15% growth in Q4, while Google Shopping spend growth accelerated from 32% in the fourth quarter of 2017 to 40% in the first quarter of 2018.
The cost per click for Google brand text ads rose 28% Y/Y in the first quarter after growing 23% in the fourth quarter of 2017.
Albeit at slower rate, spending on desktop continues to grow. Marketers spent 20% more on paid search ads for desktop in the first quarter.
Spending on non-brand Google text ads and product listing ads also slowed to 17%, down from 22% growth a quarter earlier. The average cost per click grew 8% across all non-brand Google search ads, with PLA CPCs up 15% and text CPCs up 7%.
The average CPC for brand keywords on Google grew 28% Y/Y the first quarter of 2018, up from 23% growth in the fourth quarter in 2017. Brand CPCs fell in mid-2017 following a publicly-confirmed Google change to Ad Rank.
On a positive note, the average revenue per click that advertisers earn from their Google search ads has also jumped, rising across formats and devices. Mobile text ad revenue per click grew the fastest in the first quarter of 2018, increasing 19% Y/Y.
Interestingly, Google search ad clicks produced on Google Maps has been roughly flat for the past few quarters. Classified as “Get Location Details” clicks by Google, Maps produced about 6% of phone clicks for brick-and-mortar advertisers in the first quarter of 2018 and 1% of desktop clicks.
In mid-Q1, some advertisers began seeing Google testing a keyword-less ad model for Maps, but reporting for these campaigns has not been fleshed out, according to Merkle’s report.