Devices Getting 20% Of Search Budgets As Spending Soars

TabletWiFiAnother metric supports the revenue and loyalty benefits derived from  from  engagement from delivery of free WiFi access, versus mobile apps, we expect to see more clicks on tablets as advertisers ramp up their mobile advertising.

by Steve Smith,

Google had good reason to institute its “enhanced campaign” model for  blurring the lines between desktop and mobile/tablet search ad buys. It saw the  numbers written on the wall — budgets and behaviors are moving to mobile search  even as their all-important cost-per-click rates on these devices still lag the  desktop.

In its quarterly survey of client search spending across the major platforms  and devices, The Search Agency reports that in Q1 2013 marketers spent 20.1% of  their search budgets on smartphones and tablet ads — a substantial 37% increase  in share since the year-ago period. The actual spend on these devices has  mushroomed 68% on smartphones and 135% on tablets over the last year, reflecting  the velocity of the increase and growing perceived value of tablet advertising  in particular.

In fact, CPCs for smartphones actually declined 10.4% year-over-year, while  tablet CPCs went up 19%. The so-called “mobile discount” appears to be real when  it comes to smartphones, perhaps reflecting the ongoing perception that  smartphone clicks do not convert as well as desktop — at least not in the  conventional sense of leading to sales.

On Google, the average CPC for smartphones in Q1 2013 was down year-over-year  from 65 cents to 58 cents, although the rate did come up from 45 cents in Q4  2012. Perhaps reflecting a drawback from the holiday shopping season where  retailer advertising is strongest, tablet CPCs on Google declined from the  previous quarter — from 69 cents to 65 cents — although it was up 18.2% from  the previous year. Desktop CPCs continue to exceed devices on Google, at 74  cents in Q1 2013.

Media buyers are following user behavior. Devices continue to expand their  share of search clicks. On Google, the share of search clicks coming from the  desktop declined 13.6% from Q1 2012, from 83.9% last year to 72.4% this most  recent quarter. Meanwhile, devices now contribute 27.6% of clicks on Google ads — 16% coming from smartphones and 11.6% from tablets. Also on Google, the  overall share of mobile impressions is slightly lower: 13.6% from smartphones;  9.5% from tablets and 76.7% from desktops.

But device-based impressions spiked considerably in the recent quarter. The  Search Agency report expects an explosion in hardware sales over the holiday  season. “As we predicted in our last quarterly report,” the report states, “smartphone and tablet clicks increased significantly after the holiday season.  After a huge peak in smartphone and tablet sales during Q4 2012, advertisers  took advantage of advertising opportunities on mobile devices, demonstrated by  the substantial lift in impressions on smartphones and tablets. Going forward,  we expect to see more clicks on tablets as advertisers ramp up their mobile  advertising.”

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