Paid search ad spend was up 23% YoY in Q3 following a 20% YoY increase in Q2. Spend was down slightly from quarter to quarter, reflecting seasonal factors. Ad clicks rose 16% YoY in Q3 compared to 12% in Q2.
With spend rising faster than clicks, cost per click (CPC) rose 6% YoY in Q3 compared to 8% in Q2. Sales per click (SPC) has kept pace though, keeping return on ad spend (ROAS) flat YoY and QoQ.Google Results documented the woes of the Bing/Yahoo Search Alliance a number of times in the past year and, unfortunately, Q3 did not mark a significant turnaround point for the two partners in search.
Spend on Bing-powered ad listings fell 12% YoY in Q3, compared to 21% in Q2. Ad Clicks were also down 12% in Q3. It should be noted that Bing discontinued its Cashback program at the end of July 2010, and while Cashback was likely very costly to Microsoft, it did provide a boost to traffic levels at the time, making 2010 comps through July more difficult to meet. Bing's year over year numbers have improved since August, but they are still in the negative.
Bing CPCs were flat YoY in both Q2 and Q3 while SPC fell 9% in Q3.
Google vs Bing
While we've read plenty of reports suggesting Bing-powered search is slowly chipping away at Google, we just don't see it on the paid search side.
Over the last six quarters we have seen Google's share of ad spend increase from 76% to 85%, while its ad click share has risen from 73% to 82%. Google's share was increasing before the Search Alliance, but it jumped when Bing took over Yahoo ad serving.
Similarly, Google's advantage in CPCs commanded rose sharply last year during Q4. Bing did make some gains in this area in Q3, but it has not returned to its pre-Alliance ratio to Google.Mobile Results Mobile is increasingly top of mind to marketers and, as it gains more attention, we are finding that our clients' expectations of mobile to prove its value are rising as well.
If we consider tablet devices to be under the "mobile" umbrella, then we see mobile paid search traffic share plateauing between 7-8%. Excluding tablets, mobile traffic share has declined among our clients, as they have chosen to segment it out and treat it differently than desktop and tablet traffic.
Google has noted that 1 in 3 mobile searches have local intent. Whether the actual number is a bit higher or lower, there is clearly a very large segment of mobile traffic that has significantly less value to those advertisers that do not have a local presence, and we are seeing those effects in our data.iPad generating around 95% of tablet-based ad clicks, so we present here the iPad's share of total paid search traffic. holiday sales this year, albeit a smaller one than we saw last year. As always, a lot can change in a month or two, but the Q4 outlook for paid search appears strong. In recent years we have seen a trend of holiday sales being more and more front-loaded, so we'd all be well advised to view those numbers cautiously as they come in, but we'll certainly get a much better idea how Q4 will shake out once they do.