After a slow start to the calendar year, U.S. paid search spending growth accelerated throughout the first quarter and remained elevated during the second. Google saw a 24% increase in ad spend from Q2 of last year, as PLAs continued to produce huge growth. Bing Ads search spending grew 19% from last year across Bing, Yahoo, and their search partners.
Mobile traffic also continues to produce strong growth, while desktop traffic continues to decline. Smartphone clicks grew by 47% year-over-year, compared to a 43% increase for tablets and a 2% decline for desktop.
Image-based product ads continue to see much higher growth than traditional text ads. Search advertiser spending on product ads in Q2 rose 72% over last year, while text ad spending grew just 6%. PLA share of total Google clicks remained steady from last quarter, at 26% of overall paid search clicks and 50% of non-brand clicks.Some additional highlights from our Q2 2014 findings include:
- Google paid search spending growth accelerated to 24% Y/Y in Q2. Paid clicks rose 13%, while CPCs rose 10% as advertisers responded to improving conversion performance.
- Bing Ads search spending grew 19% Y/Y across Bing, Yahoo and their search partners. Paid clicks rose 22%, but CPCs fell 3% due to a mix shift to mobile.
- Advertiser spending on Google Product Listing Ads (PLAs) and Bing Product Ads rose 72% Y/Y. For retailers, PLAs produced 26% of Google search clicks overall.
- Smartphones generated 19% of paid search clicks and 9% of search spend, while tablets produced 18% of clicks and 19% of spend. Smartphone clicks rose 47% Y/Y, compared to a 43% increase for tablets and a 2% decline for desktop.
- Google conversion tracking data and estimates show that cross-device tracking surfaces 7% more conversions overall and 14% more smartphone conversions that would otherwise not be attributed to search.
Organic Search & Social
- Organic search produced 31% of all site visits in Q2 2014, which was down from 36% in the first half of 2013. As the major search engines work to better monetize their listings with larger and more appealing ads, organic search volume will continue to get squeezed in favor of paid.
- Smartphones and tablets produced a combined 34% of organic search visits in Q2, up from 31% in Q1. Both iPhone and Android picked up share, while iPad traffic share was flat.
- Social media sites produced 1.6% of all sites visits in Q2. Facebook continues to lead the way with 51% of visits produced by social media sites, but its contribution has slipped as Pinterest has become a larger traffic source for retail sites.
- Mobile devices accounted for 42% of visits produced by social media in Q2. That was up two percentage points from Q1 and 17 points from a year earlier.
Comparison Shopping Engines
- The eBay Commerce Network and PriceGrabber both made large gains in CSE spend share compared to a year earlier as all other major engines saw losses.
- Among advertisers running both Amazon Product Ads and Google PLAs, revenue volume from Amazon’s program was just 7% that of PLAs in Q2, down from 9% in Q1.
- For advertisers actively advertising on the Google Display Network (GDN) and running AdWords paid search ads, GDN accounted for 6% of total Google spending, the same rate as the previous quarter.
- Advertisers increased their total FBX investment 72% Q/Q following a slower Q1 in which advertisers scaled back following the holiday season.