Mobile Paid Search Heats Up this Summer

Posted by Ryan Hornacek, Analyst, Strategy & Analytics

In July, we saw new highs in mobile paid search impressions and clicks as a percentage of total clicks (desktop + mobile) for our aggregate client group.  Additionally, mobile CTRs—especially tablet CTRs—continue to outpace desktop, and mobile CPCs remain below desktop.  See below for our latest mobile paid search benchmarks:


In July, mobile took 22.1% of total (desktop + mobile) paid search spend, second only to June (at 22.5%).  In terms of spend volume, July fell behind only Nov. 2011, Dec. 2011 and June 2012 for our aggregate group of clients.  Mobile spend continued to be broken evenly between mobile devices (smartphones) and tablets.  We expect advertisers to invest more budgets in mobile in the coming months—as back-to-school peaks in August, and we then move into the holiday season:



July set a new record for mobile paid search impression share—at 25.5%—breaking June’s previous record.  Mobile impression share continues to grow every month in 2012, and is up 137.9% year-over-year.  Mobile devices (smartphones) took more July impression share (18.2%) than tablets (7.4%).  July mobile impression volume fell behind only Nov. 2011 and Dec. 2011:



Mobile clickshare also peaked in July, at 31.8%.  Of the 31.8%, mobile devices (smartphones) took 20.6% clickshare, while tablets took 11.2%.  In terms of mobile click volume, July was the second-highest month on record, behind only Dec. 2011.  Mobile click volume is up close to 300% year-over-year.  Historically, mobile clickshare and volume remain steady through August and September and then rise rapidly until year’s end.  These trends point to the biggest mobile holiday ever—in terms of both clickshare and click volume:


Click-Through-Rates (CTR)

Regarding click-through rates (CTRs), we’ve seen the same story all year—mobile CTRs are significantly higher than desktop.  CTRs by device rank, in order from lowest to highest: desktop, mobile devices (smartphones) and tablets.  In particular, tablet CTRs are up 38.7% year-over-year:


But why do mobile CTRs continue to outpace desktop?  High smartphone CTRs are driven by two factors: (1) brands with strong brick-and-mortar footprints stand to immediately benefit from mobile audiences with local intent and (2) the smartphone search engine results page (SERP) is smaller, enabling advertisers to dominate the page with sitelinks, click-to-call, location extensions and other ad extensions that increase click-through. 

Tablets, on the other hand, have bigger SERPs and audiences with less local intent, but they still have the highest CTRs of any device by a wide margin.  This month, we dug into our tablet CTR data and found that outstanding tablet CTRs are being driven by retailers with clear premium audiences.  As savvy searchers increasingly turn to their tablets to shop, these retailers have benefited from building tablet-specific, tablet-friendly experiences for their shoppers.  Every retailer should keep this in mind for holiday.  Consider that, in 2011, 7% of holiday sales came from tablets when only 9% of people owned tablets.  Now, 31% of people own tablets (Pew), and they will be using them to shop on your site, providing you offer a tablet-friendly experience.

Cost-Per-Click (CPC)

In July, mobile device (smartphone) cost-per-clicks (CPCs) were 52.1% of desktop, and tablet CPCs were 77.7% of desktop.  Mobile device and tablet CPCs actually dropped from June (-18.8% and -7.1%, respectively).  We believe that mobile CPCs have remained low, and have recently fallen, because more advertisers are creating custom mobile device and tablet experiences, as well as separating their desktop, mobile device and tablet search campaigns.  This leads to more relevant ads and landing pages, boosting quality scores, thus lowering CPCs.  However, last year, mobile CPCs rose every month from July through Nov. as holiday mobile competition rose:



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