mobile search uk 2014

8/11/2019 Mobile Search Uk 2014

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WHITEPAPER

Mobile Search AdvertisingAround the Globe:

2014 Annual Report


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Copyright 2014 Marin Software Inc. All rights reserved. 2

Mobile Search Advertising Around the Globe:

2014 Annual Report

TABLE OF CONTENTS

Executive Summary 03

Introduction 03

Methodology 04

Part IUnited Kingdom and Eurozone 05

Part IIUnited States 07

Part IIIMobile Search Across the Globe 10

About Marin Software 13


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2014 Annual Report

EXECUTIVE SUMMARY

As mobile adoption makes the world more interconnected by the hour, advertisers will

need to move faster and be more responsive to their customers. In working with someof the worlds largest and most sophisticated advertisers, our research uncovered some

very interesting trends that highlight the increased value of mobile devices as a mission

critical channel for reaching consumers, and the increased competition that advertisers

face.

To create this brief, we sampled the Marin Global Online Advertising Index, composed

of advertisers who invest more than $6 billion in annualised ad spend on the Marin

platform to create this brief. Our research uncovered three key findings:

1. Consumer Adoption: At the current growth rate, mobile devices will account for

50% of all paid search clicks by December 2015.

2. Increased Competition: Cost per click (CPC) on mobile devices increased at a much

higher rate than cost per click on the desktop during 2013. In some regions, tablet

CPCs have surpassed desktop CPCs.

3. Improving Performance: Conversion rates on tablets and smartphones rose

throughout 2013 as consumers became increasingly comfortable with mobile

commerce.

INTRODUCTIONEven though mobile devices have been around for years, it is nothing short of stunning

how quickly smartphones and tablets have become an essential part of modern-day

life. Todays consumers are constantly connected via one device or another. And while

advertisers have historically had to play catch-up with mobile enabled consumers, we

saw 2013 as the year where brands and agencies really began to focus on mobile

advertising.

According to eMarketer, 19% of Googles 2013 ad revenue came from mobile search

ads and it will increase to 30% over the next 3 years.1 This growth reflects the shape of

the digital advertising landscape as driven by the increased usage of mobile acrossconsumer markets. Global smartphone penetration currently sits just above 60% with

over 1 billion users.2 eMarketer predicts smartphone penetration to reach 69.4% by

2017.3 In addition, tablet sales are projected to exceed computer sales by 2015.4 The

widespread penetration of smartphones and tablets only underscores the importance of

mobile as an advertising channel.

1 http://searchengineland.com/googles-mobile-search-revenue-to-top-30-percent-desktop-to-fall-to-43-percent-by-2015-forecast-17081

2 http://www.emarketer.com/Article/Smartphone-Users-Worldwide-Will-Total-175-Billion-2014/10105 36

3 http://searchengineland.com/googles-mobile-search-revenue-to-top-30-percent-desktop-to-fall-to-43-percent-by-2015-forecast-170811

4 http://marketingland.com/mobile-devices-to-eclipse-pcs-in-q4-this-year-58833


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2014 Annual Report

As mobile devices become increasingly integrated with everyday life, advertisers needto adjust marketing strategies to accommodate the always-connected consumer, who is

constantly on the go and whose shopping and product research behavior is vastly

different than anything weve seen before.

This research brief analyzes mobile trends from 2013, forecasts the state of mobile

advertising for 2014, and examines the overall performance of mobile ads across

devices. Our objective with this report is to help the digital marketer wrap their arms

around the explosive growth in mobile advertising, while developing effective

benchmarks and strategies for success.

METHODOLOGY

In this study, we looked across leading brands and advertisers that manage more than

$6 billion in annualised online ad spend. Our data set represented all major industry

sectors alongside the following countries or regions:

Australia India Singapore

Brazil Japan United Kingdom

Canada Mexico USA

China New Zealand

Eurozone ( countries) Russia

The size and diversity of our data set, coupled with the broad geographic coverage,

enables us to provide the most comprehensive report on how smart mobile devices are

changing paid search. That being said, our clients mainly consist of large advertisers

spending upwards of 50,000 per month on paid search, social and display. As such,

the information presented in this report is biased towards larger advertisers, and may

not reflect mobile search trends for small or medium sized businesses.

4.8%

12.3%

19.1%

25.3%

30.8%

2011 2012 2013 2014 est. 2015 est.

Source: company reports, 2012 & 2013; eMarketer, Aug 2013

Mobile Share of Google Ad Revenue


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PART IUNITED KINGDOM AND EUROZONE

Mobile Search Trends

In the UK, mobile click share grew from 24.4% in January to 43.4% by the end of the

year, marking a 77.9% increase in 2013. The Eurozone grew its 2013 mobile paid

search click share from 12.4% to 20.2%, displaying an impressive 62.9% growth

through the year.

Ad spend share also showed marked growth across the board in Europe, reflecting the

increased interest in mobile and realization of mobile relevance in 2013. UK mobile

ad budget share increased from 22.0% to 34.8%, or growth of 58.2% in 2013.

Meanwhile, the Eurozone mobile budget share increased from 10.0% to 20.9%, or anincrease of 109%. In the Eurozone, mobile budget spend caught up with click share.

Benchmarking Performance Across Devices

Across the board, we saw that click-through rates for mobile devices are higher than

that for computers. In the UK, click-through rates were significantly higher for mobile

devices relative to the Eurozone.



2014 Annual Report

12.1%20.6%

5.1% 7.7%

12.3%

22.8%

7.3%12.5%

UK Euro

Smartphone Tablet

January2013

January2013

December2013

December2013

2013 Mobile Share of Paid Clicks

7.1%12.9%

3.2%7.8%

14.9%

21.9%

6.8%

13.1%

January2013

December2013

UK Euro

Smartphone Tablet

January2013

December2013

2013 Mobile Share of Search Budgets


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2014 Annual Report

On the CPC side, we observed similar trends. In the UK and Eurozone smartphone cost

per click was significantly less than that of computers and tablets. However, tablet

CPCs in the Eurozone surpassed that of computers. This is a first for tablets and quite

possibly a leading indicator on their emerging value to performance advertisers.

Smartphone CPCs saw the largest growth from 2012 to 2013. Across both the UK and

the Eurozone, smartphone CPCs increased just over 26%. Tablet growth slowed from

2012, increasing about 10% across Europe. Computer CPCs actually decreased in the

Eurozone, dropping by about 3%.

2.59%3.02%

5.71%

3.83%3.85% 3.63%

UK Euro

Computers Smartphones Tablets

2013 Average CTR across Devices

0.34 0.30

0.19

0.24

0.31 0.33

UK Euro


2013 Average CPC across Devices

13.3%

-3.2%

26.7% 26.3%

10.7% 10.0%

UK Euro

Computer Smartphone Tablet

CPC Change, 2012 vs 2013


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2014 Annual Report

Smartphone conversion rates remain below that of desktop and tablet. European

smartphone conversion rates have grown sharply, similar to the US, signaling improved

ad targeting and optimization, as well as consumer momentum on mobile advertising.

Additionally, tablet conversion rates have been increasing in the Eurozone, and will

likely reach the same level as desktops this year.

PART IIUNITED STATES

Mobile Search Trends and Projections

Smartphone and tablet usage grew sharply in 2013, with consumers embracing paid

search on mobile devices and advertisers following suit. From January to December of

2013, the share of paid search clicks from mobile devices increased from 21.8% to34.2% of all paid search clicks. In particular, paid search clicks from smartphones

almost doubled during that period. Projecting this trend forward, we think that the

share of paid search clicks from mobile devices will break 42% by December 2014,

with smartphones accounting for half of the overall volume. Additionally, our data

suggests that mobile devices will account for 50% of all paid search clicks by

December 2015, marking a significant milestone where mobile is the new normal.

Spend share, or percentage of budget, saw similar increases, with mobile spend share

spiking a stunning 45% from January to December 2013 as it rose from 19.3% to

27.9%. Similar to 2012, we continue to see budget share lag click share on mobiledevices. Also, the share of paid search budgets on smartphones surpassed the same for

tablets in mid-2013. And our analysis indicates that mobile budget share will exceed

one-third of overall paid search budgets by December 2014.

Mobile Click Share

21.8% 21.9% 23.2%23.5% 25.0%

26.7% 27.4%29.2% 29.4% 29.6% 32.1%

34.2%

12.1% 12.0% 12.8% 12.9%14.1% 15.5%

16.0% 17.4%17.9% 18.4% 19.4%

20.3%

9.6% 9.9% 10.4% 10.7% 10.9% 11.3%11.4% 11.8% 11.5% 11.2% 12.8%

13.9%

Mobile Smartphones Tablet

2013 Average Conversion Rate

6.09%

4.60%


1.76%

2.79%

1.03%

4.60%

1.67%

UK Euro


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2014 Annual Report

With smartphones accounting for a fifth of all paid search clicks, advertisers need to be

increasingly thoughtful when it comes to allocating their paid search budget across

devices. Specific things to consider include cost per click, click-through rate, andconversion rate across devices.

Benchmarking Across Devices

Advertising on a smartphone is intrinsically different from advertising on a desktop

computer because of how consumers use smartphones and the difference in form

factor. For example, many advertisers may have noticed that smartphone click-through

rates are consistently higher than those on computer and tablets. There are a few

different reasons for this. To start with, the limited screen size of smartphones reduces

the number of ad impressions delivered per search. Additionally the increased urgency

associated with being mobile and on-the-go can change consumer behavior and leadto greater engagement with the SERP. In 2013, the average click-through rate on a

smartphone was 3.75%, vs. 2.29% and 2.70% for computers and tablets, respectively.

However, when normalising for position, it appears that click-through rates across

devices might not be that different. Across devices, click-through rates are similar for

ad positions one through five. Smartphone searches only deliver up to five ads, and not

coincidentally, smartphone ad click-through rate disappears altogether after position five.

2013 Average CTR by Device

2.29%

3.75%

2.70%


Mobile Spend Share

19.3% 19.6% 20.1% 19.3%20.7%

22.2% 22.9%23.7% 24.4% 24.2%

26.6% 27.9%

9.5% 9.7% 10.3% 9.4% 10.2%11.3% 11.8% 12.5%

13.2% 13.3% 13.9% 14.4%

9.8% 9.9% 9.8% 9.9% 10.5% 11.0% 11.0%11.3% 11.2% 10.9%

12.7% 13.6%

Mobile Smartphone Tablet


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Mobile CPC shows advertisers another advantage of mobile advertising. The chart

shows that smartphone clicks are about 30% cheaper than computer clicks, andtablets are about 8% cheaper. While CPCs are closing the gap, we still see smartphone

CPCs being significantly cheaper than their computer counterparts for the near future,

with tablets reaching computer levels.

When comparing CPCs in 2013 versus those in 2012, we see 20.8% and 22.6% CPC

growth on smartphones and tablets. This rate of growth is almost double that of

computer CPCs, which increased 10.7% in 2013. The relative increase in mobile and

tablet CPCs point to the increased competitiveness of mobile advertising, compared to

the relative maturity of advertising on desktops.

CPC Change, 2012 vs 2013



2014 Annual Report

2013 Average CTR by Ad Position

5.0%

2.4%

1.7%

1.3%

5.2%

2.4%2.1%

1.0%

5.1%

2.9%

1.9%

1.3%

1-2 2-3 3-4 4-5


$0.83

$0.58

$0.76


2013 Average CPC by Device

10.7%

20.8%22.6%



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15.3%

2.4%7.2% 3.9% 2.6% 4.2%

6.6% 8.0%14.8%

7.1%

16.5%

3.6%

9.7%9.2% 11.2%

30.8% 24.8%

7.9%

11.2%

17.2%

68.2%

93.9%

83.1%86.9% 86.3%

65.0%68.6%

84.1%

74.1% 75.7%

Australia Brazil Canada China India Japan Mexico New Zealand Russia Singapore

Tablets Smartphones Computers



2014 Annual Report

However, conversion rates tell a different story. In 2013, tablet conversion rates

managed to edge out computer conversion rates for the first time (5.5% vs 5.3%

respectively). This is an important milestone for tablets and underscores their role as

emerging online shopping devices. Smartphone conversion rate still lags at 4.4%.

However, when we compare conversion rates between 2012 and 2013, smartphones

and tablets have increased conversion rates by 57.1% and 66.7%, versus 35.9% for

the desktop. Mobile conversions are growing faster than ever and advertisers are poised

to take advantage of the mobile e-commerce revolution.

PART IIIMOBILE SEARCH ACROSS THE GLOBE

Across the globe, we saw similar trends in mobile advertising. Mobile devices have seen

widespread and rapid adoption around the world, with smartphones penetrating moreand more markets.

The charts below show click-share and budget-share across devices for each market

under consideration. We also looked at device-specific click-through rates and cost per

click for each market. Please note that this is only reflective of Google mobile data, and

does not include data for other search engines, such as Bing, Yahoo! Japan, or Yandex.

5.3%

4.4%

5.5%


2013 Average Conversion Rate by Device

2013 Click Share by Region


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3.5%

2.0%

1.7%

1.5%

5.0%

1.8%

1.2%

1.7%

4.2%

3.3%

3.6%

2.9%

2.4%

1.8%

4.8%

2.0%

1.7%1.6%

5.0%

2.4%

4.3%

2.5%

1.9%

2.9%

5.7%

1.8%

1.1%

1.3%

4.9%

3.8%



14.45%

2.17%6.89% 4.60% 2.73% 4.53%

7.53% 7.80%13.62%

5.65%

12.97%

2.32%

7.01%7.14%

4.93%

35.10% 24.26%

5.23%

9.01%

12.23%

72.57%

95.51%

86.10% 88.27%92.34%

60.37%68.21%

86.97%

77.36%82.12%


Tablets Smartphones Computers

2013 Spend Share by Region



2014 Annual Report

2013 Average CTR by Region


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2013 Average CPC by Region



2014 Annual Report

Optimising Mobile Search Campaigns

With mobiles rapid growth and reach throughout the globe, it is an important area for

marketers to focus their attention. However, advertising on mobile differs vastly from

advertising on desktop, and it is important to accommodate for mobile user behavior

when creating mobile campaigns. This section covers best practices for mobile devices

to help marketers get the most out of their advertising dollar.

1. Ad position: As shown earlier, ad position is critical for advertising in general.

However, it is especially important for smartphone advertising due to the constraints

of the small screen. Positions 1 and 2 are by far the most valuable positions for ads.

Across all devices, click-through rates drop by 50% after position 2, from roughly

5% to 2.4%.

2. Mobile experience: A strong factor for conversion rates is overall user experience.

Many websites still lack a robust mobile-optimised experience. Advertisers should

ensure that all parts of their conversion path are well-optimised for mobile devices,

and specifically smartphones.

3. Mobile conversions: Smartphone advertising tends to have conversions that happen

via a non-standard pathway, such as a call or in-store visit. This can lead to

difficulties recording these conversions and acknowledging that they are mobile-

influenced. Marketers should look into tracking mobile ad formats like click-to-call

and store-locator. If successful, they can better estimate revenue from mobile

transactions and adjust budget accordingly.

$1.18

$0.32

$1.06

$0.39

$0.16

$0.47

$0.37

$0.54

$0.25

$0.64

$0.87

$0.20

$0.73

$0.30

$0.07

$0.57

$0.36 $0.35

$0.19

$0.42

$1.05

$0.28

$0.97

$0.45

$0.16

$0.55

$0.43

$0.51

$0.22

$0.48



All amounts in USD


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2014 Annual Report

ABOUT MARIN SOFTWARE

With more than $6 billion in annualised advertising spend, Marin Software (NYSE:

MRIN) is the leading digital ad management platform in the world. Offering anintegrated platform for search, display, social, and mobile advertising, Marin helps the

worlds best brands and agencies simplify their advertising workflow while dramatically

increasing ad performance. Powering advertising campaigns in more than 160

countries, Marins technology transforms data into insights and complexity into

opportunity for hundreds of global advertisers and agencies. For more information

about Marins solutions, please visit: http://www.marinsoftware.co.uk/solutions/overview.

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Portland

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Suite 850

Portland, OR 97204

Tel: +1 (971) 302-6191

EMEA

United Kingdom

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5 Upper St Martins Lane,

London, WC2H 9EA

Tel: +44 (0)845 262 0404

France

Actualis Level 2

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Paris 75009

Tel: +33 1 80 95 68 60

Germany

Am Kaiserkai 1

20457 Hamburg

Tel: +49 40 80 80 74-522

Ireland

Suite 204

28-32 Upper Pembroke StreetDublin, 2

APAC

Singapore

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North Tower, Level 25

048583

Tel: +65 6622 5888

Japan3rd Floor, Sanno Park Tower

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Chiyoda-ku

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Tel: +81 3 6205 3179

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Sydney NSW 2000

Tel: +61 (0)2 9258 1820

0845 262 0404 1st Floor, Orion House,

[email protected] 5 Upper St Martins Lane,

www.marinsoftware.com London, WC2H 9EA

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