Paid search advertising significantly increased in the fourth quarter of 2013, driven by the use of Product Listing Ads and mobile devices during the holiday season.
According to a study by Covario, paid search advertising significantly increased in the fourth quarter of 2013. Google's Product Listing Ads (PLAs) were critical to the growth, and smartphones and tablets also drove the paid search gains.
Q4 Paid Search Spending Accelerates Coinciding With the Holiday Season
Spending on global paid search advertising saw a 7 percent year-over-year (YoY) growth, according to Covario. On a global platform basis, cost-per-clicks (CPCs) increased an average of 10 percent YoY. Click-through rates (CTRs) performed 28 percent better than in the same period in 2012.
Meanwhile, Covario predicts that paid search investments will increase 15 percent in the U.S. and Canada this year.
Rimm-Kaufman Group (RKG) observed this trend among its clients as well. It found that paid search advertisers spent 23 percent more in Q4 2013 than the same quarter a year ago. RKG also saw that click volume rose 19 percent in Q4, while average CPC was up 3 percent.
In addition to the global arena, IgnitionOne pointed out that U.S. paid search spend grew 12 percent in Q4, which was mostly attributed to holiday-related spending.
Further, clicks and CTRs increased 5 percent and 25 percent, respectively. However, impressions were down 16 percent. This may be attributed to top-of-page innovations like ad extensions and image ads. These innovations lead to more efficient traffic and thus higher click-throughs despite lowering impressions, IgnitionOne says.
Google Still Dominates the Market Share in Spend While Yahoo Bing Grows
Globally, Google represented 84 percent of market share in spend, 88 percent in impressions, and 62 percent in clicks, according to Covario. Paid search advertising spend on Google was up 7 percent from 2012. In comparison, Yahoo Bing held 8 percent of global market share in spend and 6 percent in clicks.
RKG found that Google's share of U.S. paid search spend and traffic in Q3 and Q4 2013 were 80.5 and 79.5 percent, respectively.
IgnitionOne also confirmed this trend, as they reported that the Yahoo Bing network held onto its market share of 22.7 percent in Q4, compared to Google's 77.3 percent. Bing's Q4 growth was still at its peak in Q1 2013 of 24.4 percent.
PLAs Gain Momentum in Q4
In Q4 2013, PLA metrics saw an overall YoY increase, as impressions grew by 380 percent, clicks by 312 percent, and spend by 618 percent, according to IgnitionOne. In addition, the company analyzed those numbers compared to traditional paid search (PPC) growth for the same advertisers:
Based on its client sample, RKG also saw PLA CPCs outpacing text ad CPCs for the first time. CPCs for the PLA format drove CPC growth for Google non-brand search to 6 percent YoY growth in Q4. Meanwhile, PLA spending increased 72 percent YoY in Q4 2013.
Paid Search Advertising Growth for Mobile Devices Was Strong
Mobile advertising grew 55 percent YoY in the fourth quarter of 2013. Mobile search advertising now makes up 20 percent of total spending, Covario reports.
RKG also found that smartphones and tablets combine for nearly a third of paid search traffic. Interestingly, although tablet and smartphone represented nearly equal click shares, tablets accounted for 71 percent of spending on mobile devices in Q4.
IgnitionOne breaks down mobile devices with a different approach. It points out that at 253 percent, smartphone growth was more impressive. By contrast, tablet growth was up only 82 percent in Q4.
Additionally, tablets saw a moderate YoY growth in impressions (27 percent,) clicks (49 percent), and CTR (17 percent). In comparison, smartphones saw a 251 percent rise in impressions, 306 percent in clicks, and 15 percent in CTR.
For full reports and each contributor's methodology, see:
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Yuyu Chen is an Editorial Intern at ClickZ. Her work has appeared in Local East Village, New York Daily News and Brooklyn Chamber of Commerce website. Yuyu received her M.A. in Business and Economic Reporting from New York University in May, 2013.
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