Google paid search spend grew 35% in Q1 2012 as it once again benefited from strong click-through rate growth driven by newer ad formats and a cumulative string of design changes that have favored their paid listings.
This is according to the RKG Digital Marketing Report for Q1, 2012. The Rimm-Kaufman Group (RKG), a digital marketing agency and industry thought leader, publishes their report each quarter to help marketers benchmark their performance and understand the latest trends in online marketing.
RKG found that while Google controls 76% of organic search visits, it supplies 84% of paid search clicks and commands 85% of paid search ad spend. In the quickly growing mobile space, Google, with its Android operating system and status as the default search provider for Apple’s iOS, enjoys an even larger 91% share of ad clicks.
With mobile ad clicks offering 30-40% less value to advertisers across smartphones and tablets combined, a year over year doubling of mobile’s share of traffic to 13% has put downward pressure on Google’s average cost-per-click.
Also bringing down CPCs, Google continues to shift more traffic to its Product Listing Ads format, which employs richer information about products including images and prices. In the first quarter, PLAs accounted for 11% of Google clicks, a 256% increase year over year, but PLAs are costing advertisers 10-20% less per click than an equivalent text ad.
Overall, Google CPCs were down 9% in Q1, which would mark a continued deceleration from the 8% decline Google officially reported for Q4 2011.
The latest RKG report also spotlights the performance of Bing and Yahoo in paid search and offers additional insights into data covering: search engine optimization (SEO), social media advertising, comparison shopping engines, multi-channel attribution and more.
Among the most notable results, RKG found:
While marketers and financial analysts await the official earnings releases from Google, Yahoo! and Microsoft, they can get an early read on all of the details on paid search, SEO, comparison shopping engines and social from RKG’s data-driven marketing team in the full RKG Q1 2012 report.
About RKG RKG is a full-service digital marketing agency that combines superior marketing talent with leading edge technology to create the industry’s most effective data-driven online marketing solutions. Founded in 2003, RKG specializes in working with clients in retail, travel, financial and B2B organizations ranging in size from small startups to Fortune 500 companies. RKG is a privately held company headquartered in Charlottesville, VA with offices in Bend, OR and Boston, MA.
- Total paid search spend grew at a 30% year over year rate in Q1 2012, a slight decline from Q4 growth of 31%. Ad clicks grew at a 36% rate, a slight increase from Q4.
- Bing and Yahoo paid search spend grew 7% overall, but ad clicks declined 4%. Volume from non-brand terms looked particularly weak, but traffic quality, in terms of revenue per click for advertisers, has risen sharply.
- Google’s share of organic search traffic increased to 76%, while Bing and Yahoo had shares of 10.4% and 10.8% respectively.
- Facebook provided 5.2% of referral visits in Q1, while Twitter stood at 0.4%. The buzz-heavy Pinterest sent even more traffic than Twitter on average, with a referral share of 0.5%. In terms of all site visits though, the three social sites combined for less than 1% of tracked visits.
- Mobile comprised 12% of organic search visits in Q1 and 13% of paid search clicks. Google holds a 91% share of mobile paid search clicks.
- Tablet share of PPC nearly quadrupled from year to year as the iPad alone accounts for nearly 7% of all clicks. The Kindle Fire now holds 4% of tablet click share to the iPad’s 88%.
- Advertisers on comparison shopping engines shifted traffic away from paid listings such as NexTag, which saw its share of CSE clicks decline from 14% in Q4 to 9% in Q1. Google’s free Product Search listings generated nearly half of all CSE clicks in Q1, while Amazon Product Ads was the top paid CSE, taking 36% of all CSE spend.
Merkle is a leading data-driven, technology-enabled, global performance marketing agency that specializes in the delivery of unique, personalized customer experiences across platforms and devices. For more than 30 years, Fortune 1000 companies and leading nonprofit organizations have partnered with Merkle to maximize the value of their customer portfolios. The agency’s heritage in data, technology, and analytics forms the foundation for its unmatched skills in understanding consumer insights that drive people-based marketing strategies. Its combined strengths in performance media, customer experience, customer relationship management, loyalty, and enterprise marketing technology drive improved marketing results and competitive advantage. With 7,000 employees, Merkle is headquartered in Columbia, Maryland, with 21 additional offices in the US and 33 offices in Europe and APAC. In 2016, the agency joined the Dentsu Aegis Network. For more information, contact Merkle at 1-877-9-Merkle or visit www.merkleinc.com.