Has search lost its luster? Global search spending continues to grow, but costs-per-click (CPC) may be stagnating, according to Kenshoo's Global Search Advertising Trends report.
The report found that, globally, search spending for Q1 2013 is up 15 percent year-over-year, while click-through-rates (CTRs) are up a very positive 62 percent. Total search spending in 2012 was up 32 percent from 2011.
On the other hand, the global average CPC dropped. At $0.39 in Q1 2013, it was at a five-quarter nadir, although it's not that far below the $0.41 CPC of Q1 of 2012.
It seems that many search marketers have not caught up to the mobile revolution, however. In both the US and UK, desktop devices, while accounting for the lion's share of clicks, see spending outpacing click-through-rates. US desktop CTRs were 81 percent of all, while desktops garnered 86 percent of the search spend. In the UK, CTRs were 72 percent of total, while spending was 75 percent.
Mobile devices account for 19 percent of all US paid search clicks, but 14 percent of spending; in the UK, mobiles account for 28 percent of paid search clicks versus 25 percent of spend.
The discrepancy was most notable on mobile phones. In the US, they grabbed 9 percent of clicks against 5 percent of ad spend. In the UK, phones delivered 12 percent of clicks and 8 percent of spend.
The report is based on aggregate data from approximately $3 billion worth of campaigns managed annually through Kenshoo. Focused on big brands and major advertisers, the company offers campaign optimization, targeting, integration and attribution through Kenshoo Enterprise, Kenshoo Social, Kenshoo Local and Kenshoo SmartPath.
Social media is certainly sucking up all the buzz, but is this what's depressing CPCs? Not according to Aaron Goldman, CMO of Kenshoo. He says, “Social is certainly hot, but we're not seeing it cannibalize search budgets. Rather social is being funding from other channels, such as display and offline." He adds that social ad platforms including Facebook Exchange are taking budget from other ad exchanges and networks.
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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.
March 19, 2014