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The use of audience targeting in Google search ads has been growing rapidly of late, details Merkle in its latest Digital Marketing Report covering Q1 2018 [download page]. The study reveals that ads targeted to specific audiences accounted for one-third (34%) of search ad clicks at the end of Q1 2018.

That’s up from 30% at the end of Q4 2017, and marks a significant hike from 19% at the end of Q1 2017.

The most common audience targeting consists of remarketing lists for search ads (RLSAs), which comprised more than one-quarter (27%) of Google search ad clicks by the end of Q1. These showed rapid growth on a quarter-over-quarter basis, increasing from 23% of clicks at the end of Q4 2017.

Customer Match and Similar Audiences products, meanwhile, each accounted for 3% of clicks, relatively stable from the previous quarter.

Merkle has previously noted that the move towards targeting audiences is pushing CPCs higher. In fact, the average CPC for brand keywords on Google jumped by 28% year-over-year in Q1 2018, after rising by 23% year-over-year in Q4 2017.

This latest report also notes that “the growing use of audience targeting has been a significant contributor to the improvement in conversion rates and revenue per click that advertisers have seen for Google search ads in recent quarters.” In Q1, non-brand revenue per click improved by 19% for mobile text ads, 18% for desktop product listing ads (PLAs), 15% for mobile PLAs and 8% for desktop text ads.

Meanwhile, in other paid search highlights pertaining to Q1:

  • Higher CPCs contributed to a 21% year-over-year increase in overall US paid search spending, with Google ad spending up by 20%;
  • Spending increases on Google Shopping ads far outpaced spending growth on text ads (40% and 4%, respectively);
  • PLAs grew to represent 60% of Google paid search clicks for US retailers, with their influence on non-brand clicks highest in the Consumer Electronics (90%) category;
  • After hitting peaks last year, Amazon’s Google Shopping impression share declined across several categories, including Office Supplies and Home Goods; and
  • Mobile devices accounted for 60% of paid search clicks for the first time in Q1, with phones contributing 51% of clicks and tablets an additional 9%.

The full study is available for download here.

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