Report: Global Q3 growth in paid search marketing

A report published by digital marketing platform Kenshoo has revealed insights into paid search marketing global trends, indicating overall growth in the discipline, regional cost-per-click inflation and wins for the Yahoo! Bing network, Google Product listing ads and mobile devices.

The Kenshoo Global Search Advertising Trends report analyses the performances of paid search ads globally, and is based on an aggregate data set built from Kenshoo clients active in the previous 18 months. Global search advertising is growingThe key finding of the report is that through the first three quarters of 2012, global paid search budgets were significantly higher year-over-year (YoY). For Q3 2012, the YoY growth rate was 24 per cent. The increase in global search ad spend comes despite average cost-per-click (CPC) being relatively flat YoY, reflecting incremental budgets being allocated to paid search.US, UK, and EU paid search average cost-per-click is risingThe US, UK and European Union have shown steady CPC increases quarter-over-quarter increases during 2012. The findings suggest that if growth rates remain consistent, CPC rates in the UK could match the US CPC rate of $0.48 by Q4 2012. With CPC rising, marketers will have to increase search ad budgets and/or develop sophisticated optimisation strategies to sustain traffic and conversion volumes.Mobile ads having an impactRepresenting 13 per cent of total US paid search spend, mobile phones and tablets generated 21 per cent of all US search advertising clicks. While mobile devices accounted for 11 per cent of all search ad clicks and six per cent of all spend, they returned just 0.6 per cent of all conversions. Meanwhile, tablets generated 8.8 per cent of all conversions and 10 per cent of total clicks while accounting for only seven per cent of total ad spend. The report's findings on these converging trends illustrate the impressive performance of tablet paid search for top advertisers, as well as a move toward differentiating paid search campaigns on mobile phones to better accommodate mobile searchers and achieve complementary conversions that aim for something other than direct online sales.Yahoo! Bing Network drives strong resultsIn the US, while Google delivers more overall traffic (684 per cent more in Q3 2012), the Yahoo! Bing Network drives online sales revenue at a more efficient rate. Specifically, the return on ad spend of paid search on YBN was 28 per cent higher in Q3 than that of Google and the YBN click-through rate (CTR) was 29 per cent higher. As a result, advertisers increased their YBN ad spend 10 per cent quarter-over-quarter and 35 per cent YoY, representing a faster rate of growth than Google.Google Product Listing Ads outperform text adsGoogle Product Listing Ads (PLA) have outperformed paid search text ads in CTR (68 per cent higher – pictured), conversion rate and return on ad spend. Google Shopping moves to an all paid model in the US on 17 October 2012, with the UK and Europe expected to follow in 2013. This means only merchants who leverage PLA will be present in the search results.Aaron Goldman, CMO, Kenshoo, commented on the results: “Through the first three quarters of 2012, we’ve seen strong growth in paid search budgets as advertisers continue to generate exceptional results from this intent-driven marketing channel.” “Marketers should closely examine our data as well as their own campaign benchmarks to find the best performing areas and those ripe for expansion to meet their goals. This report identifies a number of specific opportunities, including increasing investment with the Yahoo! Bing Network, ramping up Product Listing Ads for Google Shopping, and creating mobile campaigns with unique targeting for different devices."For further insights, download the full Kenshoo Global Search Advertising Report.

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