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Smartphones and Tablets Changing Paid Search

  |  March 26, 2012   |  Comments

Marin Software expects that by December 2012, mobile devices will generate a quarter of all paid-search clicks.

Click-throughs from paid search are up on mobile devices - but not conversions. Still, Marin Software's stats may not tell the whole story.

The company's report, The State of Mobile Search in the U.S. 2012, found continued momentum in mobile adoption and search. Last year, mobile search ad spending increased even faster than clicks, the report said.

In 2011, advertisers grew their share of search budget on mobile devices from 3.4 percent to 8.7 percent. Marin Software expects that, by December 2012, mobile devices will account for 25 percent of all paid-search clicks and 23 percent of search budgets. During the same period, tablets may account for 45 percent of all mobile paid-search clicks in the United States.

marin-mobile-clicks

Image source: Marin Software

While tablets and smartphones typically show less ad inventory, Marin found that smartphone and tablet users had higher clickthrough rates than desktop computer users, with smartphones delivering a 72 percent higher CTR and tablets providing 31 percent higher CTR.

"It intuitively makes sense," said Matt Lawson, VP of marketing for Marin Software. "When you land on search results, there's no right-hand rail, and ad space can take up as much as one to two thirds of the overall screen size. So it's understandable that people would be more likely to click through."

Smartphone clicks are approximately 36 percent cheaper than desktop clicks, while tablet clicks are estimated to be 24 percent cheaper than desktop, making mobile a good deal for advertisers, according to Lawson.

There's a caveat, however. Marin found that conversions remain lower on mobile than the desktop. The average conversion rate in 2011 for desktops was 5.2 percent, compared to 4.9 percent for tablets and only 2 percent for smartphones.

The company's analysis found that tablets had the lowest cost per conversion, followed by desktop computers, which were 25 percent higher and smartphones, which were 106 percent higher.

The report also acknowledges that the purchasing funnel has changed markedly, thanks to mobile. In fact, it's hardly a funnel at all. As the report says, "In the real world, search, social and location are intertwined from the point of awareness to purchase. Mobile devices, often at the heart of the modern shopper’s buying process, provide instant access to product reviews, coupons and competitors."

While tablets are increasingly important as shopping devices, Lawson says marketers are struggling with attribution. "In mobile, the whole concept of a conversion gets flipped. If someone is looking for directions to your store or a number to call, that's a conversion, too. What's missing is a way to quantify the value of someone getting directions to a store."

Meanwhile, he says mobile search is a bargain.

"As is typical of an early market, consumer adoption is rising faster than advertisers are able to chase the ad dollars," Lawson says. "Budgets will catch up, but while there is a gap, advertisers will continue to see a favorable cost per click on mobile devices."

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ABOUT THE AUTHOR

Susan Kuchinskas

Susan Kuchinskas has covered interactive advertising since its invention. The former staff writer for Adweek, Business 2.0, and M-Business covers technology, business and culture from Berkeley, CA.

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