Clicks and conversions spike to push mobile ad spend beyond desktop by end of 2015
Clicks on mobile ads don’t always lead to direct conversions but often influence desktop or in-store purchases, a trend that is convincing advertisers to spend more on mobile than desktop by the end of the year, according to a new report.
The shift in media budgets is driven by advertisers’ confidence in mobile swelling as the click-through and conversion gaps narrow between display, search and social on mobile. While brands have espoused about mobile-first strategies for a decade, research from Marin Software shows that they are finally adopting the cross-channel mindset needed to back their boasts.
Mobile paid search’s share of clicks on mobile devices rocketed 36 per cent between January and December 2014, from 32 per cent to 44 per cent. Paid search clicks on mobile devices are set to take up more than 50 per cent of the total paid search market by the end of the final quarter of the year. In response, advertisers are predicted to spend more on mobile paid search ads than desktop by the end of the year, predicted the report.
It isn’t just search where mobile is outgunning other advertising formats. Smartphones nabbed the bulk of clicks on display clicks from desktop, almost doubling click share last year. If the growth continues then by the start of the fourth quarter the percentage of clicks on display ads from smartphones alone, excluding tablets, will account for the bulk of digital display clicks.
Mobile’s rapid growth in 2014 is emblematic of the ground advertisers have made up on consumers’ use of the channel. Brands such as Coca-Cola and Mondelez see the channel as key to their shopper marketing efforts and are busy trying to crack its use as an impulse sales driver.
Click through rates (CTR) on mobile search ads averaged 2.7 per cent, while CTR on desktop search ads averaged 2.1 per cent. It is the same for mobile social ads (0.6 per cent CTR) and mobile display ads (0.4 per cent CTR) in that consumers are more likely to use mobile devices for product research and click on social ads but ultimately make the final purchase on desktops.
Desktop search ads had an average conversion rate of 10.3 per cent, while desktop social ads had a conversion rate of 1.1 per cent and desktop display ads had a 3.1 per cent conversion rate. In comparison, mobile conversion rates for search were 7.1 per cent, 0.4 per cent for social and 2.6 per cent for display.
It shows that advertisers still have a job to do around amplifying the role of mobile in the customer journey though social media will also be key to keeping the spend momentum going moving forward.
Gains in the social space are being driven by the likes of Facebook Google, Yahoo and Twitter. While Facebook leads the pack in this space all three are rapidly expanding their platforms to generate scale, whether it’s by expanding beyond their own walled gardens into apps or cross-device targeting.
Mobile devices already make up the majority of social ad spend, according to the report with 55 per cent of advertisers’ social media spend being pumped into smartphone and tablet campaigns. Overall, 62 per cent of all social ad clicks come from smartphones and tablets.
Matt Ackley, chief marketing officer of Marin Software, said: “The rise of mobile is nothing short of astounding, but it’s important to remember most people jump between desktop and mobile several times when researching and buying products.
“Our new data reveals that advertisers clearly need to adopt strategies to reach consumers across multiple channels, using tools to accurately track attribution for mobile ads.”
Marin’s report's release has coincided with an eMarketer study which revealed similar findings earlier this week. Rather than 2015, spend on mobile devices will blow past desktop by 2016 in the US, according to eMarketer. Mobile ad spend will jump by 50 per cent this year to top $28.7bn and the growth is expected to carry on into 2016 with a 41 per cent rise.
The report was pulled from major industry sectors in 13 countries and regions including the US, UK, Eurozone, Japan and China.
The findings were bullish on in-app spending, predicting that that format will more than double in growth from 13.67bn this year to nearly $30bn in 2016.