Tablet Share of Paid Search Dollars Steady in Q3; Engagement Tops PCs

September 27, 2012

Mobile search advertising budgets continued to grow in Q3, although at a slower rate than in previous quarters, per a September report [download page] from IgnitionOne. In Q3, US mobile search grew to 16.3% of total search budgets, from 14% in Q2 and 12.3% in Q1, with a year-over-year increase in spend of 167.5%. Still, that was just half of Q2’s 333% growth. Tablets accounted for 52.2% of the total mobile search advertising budget for the quarter. This, too, represents a deceleration, from 60% in Q2 and 67.4% in Q1.

Even so, given the growth in budgets devoted to mobile devices, the share of total paid search spend devoted to tablets was steady in Q3. Tablets represented 8.5% of search budgets, up from 8.4% in Q2 and 8.3% in Q1.

While the IgnitionOne report indicates that tablets’ share of paid search spend has been relatively stagnant throughout this year, a July report from Marin Software reveals a different trend. That study found tablets accounting for 7% share of US paid search spending in June, up from 5% in March.

Engagement Metrics Higher For Tablets Than PCs

Looking at a sample of client sites, the IgnitionOne study reveals that tablet users on average spent 30% more time on-site than PC users, and had a 20% higher Engagement Score (a proprietary IgnitionOne metric measuring behavior and propensity to convert on a relative scale). The difference was especially marked within the retail vertical (fashion in particular), underscoring the growing importance of reaching the tablet audience in these markets.

Smartphone users represented a larger overall audience, but had on average 4% lower Engagement Scores than PC users and 11% fewer page views, likely due to slower speeds and the inferior browser experience. Across the sites monitored for the study, the percentage of mobile or tablet users was 18%, but, the majority were smart phone users. Also true, a larger percentage of smartphone users do not allow themselves to be tracked (60% vs. 7% of tablet users and 18% of PC users).

Paid Search Spend, CPCs Grow

In Q3 2012, paid search spending grew by 17.8% year-over-year, a slight acceleration from Q2 with its 15.5% YoY growth. (For more on the rise of paid search spending, visit Data Dive: US Online Ad Spend per User, 2000-2011.)

Clicks continued to grow, also, but that growth continues to show signs of abating. The year-over-year increase in clicks was 6%, compared to 13.2% in Q2 and 29.1% in Q1. Click-through rates (CTR) dropped by 13.7% year-over-year, after being flat in Q1 and Q2. Impressions continue to rise, up 22.9% year-over-year.

Total cost-per-click (CPCs) grew 11.2% year-over-year, a big jump from 2.1% in Q2 and 0.9% in Q1. Google CPCs were up 7.7%, the first such growth this year. The report suggests that this indicates that mobile ads are beginning to narrow the CPC gap with PCs. Yahoo!/Bing once again saw a strong increase in CPCs with a 26.1% jump, up slightly from last quarter’s growth.

About The Data: The data is based on a series of reports from IgnitionOne that have tracked more than 91 billion impressions and more than 2.3 billion clicks on Google and Yahoo!/Bing search networks, Google AdEx, and other display networks from January 1, 2006 through September 15, 2012.

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