Commentary

Paid Search CPCs Falling Across All Industries

The overall cost per click fell from $0.75 to $0.72 quarter over quarter (QoQ), and click-through rates (CTRs) rose from 2.91% to 2.97% during the second quarter in 2019, according to data released this week.

Marin Software’s Q2 2019 Digital Benchmark Report, an aggregate of search, mobile and social-performance data from its customers, shows advertisers are seeing better engagement rates at lower costs, at least for global search campaigns.

The CPCs dropped across all industries, but retail and travel saw the lowest this quarter, $0.43 and $0.46, respectively. Education saw the highest price: $3.31.

"Falling CPCs are likely down due to more ad clicks coming from mobile devices, 43% share in the second quarter,” said Wes MacLaggan, SVP of marketing at Marin. “The influx of product ads is another potential reason for CPCs falling as they are more oriented towards specific long tail terms with less PPC competition and lower bid prices.”

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Healthcare also saw a sharp drop, with the lowest CPCs in five quarters to $2.67.

As the healthcare industry focuses more on consumer needs, advertising shifts to brand awareness and customer satisfaction. This shift, per Marin, helps healthcare marketers find better value for clicks.

As for Google Shopping, the ecommerce ad unit continues to take much of the ad spend. Shopping ads represented 37% of total search spend share.

Amazon Sponsored Brands, a keyword targeted ad that lets brands promote multiple products or titles with a custom headline and logo, appear in Amazon search results, driving customers directly to a product detail page or Amazon Store.

Sponsored Brands showed 13% QoQ growth in sales and impressions, with a 17% rise in CPCs.

Overall, Amazon-led ecommerce click volume rose 25% in the quarter, compared with the prior quarter, but at a slightly higher CPC, about 11%.

Advertisers find bargains harder to come by in paid social. CPCs rose from $0.21 to $0.28 QoQ while CTRs have dropped from 1.58% to 1.27%.

Similar to other reports, Facebook’s lead ad adoption rose by 153% YoY, as more advertisers seek to boost new customer acquisition. Its platform, Instagram, also continues to grow, capturing 19% of social ad spend and accounting for 45% of total spend on the platform during second-quarter 2019.

The benchmark report notes features like Instagram Story Links and Highlights keep advertisers coming back to reach people on the social platform, as Instagram slowly becomes more of a direct selling tool.

Despite CTRs nearly the same as the Instagram Feed, advertisers should realize the lower cost of Instagram Stories.

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