The second quarter of 2020 encompassed the sustained spread of the coronavirus, and is when the full impact of the pandemic could begin to be seen. As with other areas of marketing, paid search has experienced its own effects. Recent benchmark data shows the year-over-year ad spend growth of paid search dipping slightly during the quarter, with clicks seeing considerable growth, per a report [download page] from Merkle.
Based on an analysis of Merkle clients, overall US paid search ad spend grew by 9% year-over-year (y-o-y) in Q2, down from the 11% seen in Q1. That said, search ad clicks grew by 38% y-o-y, after several quarters of consistent growth around 10% per quarter. At the same time, average CPCs dropped 21% over Q2 2019.
Paid search on Google reflects the overall results, with search spend on the platform growing about 9% y-o-y and search ad clicks growing a full 39% over the previous year.
Impact on Industries
The impact of COVID-19 during Q2 can be seen with a look at Google search ad clicks by industry. Among the industries highlighted in the report, the Travel industry experienced the most negative impact of the pandemic, with paid search spending on the platform decreasing by 47% y-o-y. This is also reflected in the total global ad spend estimates for the industry. Clicks on Google travel ads also tumbled, down 34% y-o-y.
By contrast, Retail & Consumer Goods experienced healthy y-o-y growth in both ad spend (+11%) and clicks (+42%). Financial Services ads also performed well, with clicks up 41% in Q2 amid stable spending (+1%).
Local Inventory and Google Map Ads Suffer
The stay-at-home measures and brick-and-mortar store closures in place during Q2 no doubt had an effect on Google’s Local Inventory Ads (LIA). This format accounted for only 3% of total Google Shopping clicks during the quarter, down from a previous high of 29% in Q4 2019. LIA’s share of Google Shopping clicks are showing some signs of recovery since then, accounting for 9% of clicks at the start of July.
Showing a similar decline, Google Maps’ share of search ad clicks fell to about 1%. While the report notes that Google Maps has seen its share of phone text ad traffic decline over the past 2 years, the drop in Q2 was the steepest yet.
Phones Dominate Search Ad Clicks
Continuing their ascent, smartphones accounted for about two-thirds (65%) of all search ad clicks. Along with tablet’s share of 3.5%, mobile generated some 69% of all search ad clicks for the quarter and accounted for half of paid search ad spend for Q2.
Interestingly, desktop’s share of Google search ad clicks jumped by 4-5% points in late March through the first half of April, per the report, as more people spent time at home. However by the end of April and since, device usage patterns have largely returned to their pre-COVID patterns.
The full report can be downloaded here.
About the Data: “Figures are derived from samples of Merkle clients who have worked with Merkle for each marketing channel. Where applicable, these samples are restricted to those clients who 1) have maintained active programs with Merkle for at least 19 months, 2) have not significantly changed their strategic objectives or product offerings, and 3) meet a minimum ad-spend threshold.”