Marin Software Report on Mobile Search Advertising: More Engagement, Lower CPC for Mobile

Written on
Mar 26, 2012 
Brian LaRue  |

ADOTAS- Today, online advertising management services platform provider Marin Software released its “State of Mobile Search Advertising in the U.S.” report, which details exactly what its title suggests, summarizing some key points worth observing following a landmark 2011 for mobile device adaptation and mobile ad spend, and also projecting what some of the same figures might be by the end of 2012. In order to put together the report, Marin vice president of marketing Matt Lawson explained during a phone call last week, “we took that advertiser base” — Marin clients, that is — and their “$3.5 billion in spend, and looked particularly at their Google spend.”

Some significant numbers: The report found that mobile devices counted for 5.3 percent of clicks on Google at the beginning of 2011, but for 12 percent by the end of the year. That’s 132 percent growth. And mobile ad spend grew from 3.4 percent of the average advertising budget to 8.7 percent. That’s 156 percent growth. In January of 2011, that figure was just at 5 percent. Marin predicts there’ll be 1 billion smart mobile devices in use around the world by sometime between December of 2012 and June of 2013. In certain ways, it looks like these numbers favor advertisers. According to the report, smartphones see 72 percent higher click-through rates for paid search ads than desktop computers do, and tablets beat out desktops by 31 percent in that regard. Furthermore, the average cost per click for paid search ads was 36 percent lower for smartphones than for desktops, and 24 percent lower for tablets than for desktops. But, conversely, the report found much lower conversion rates for smartphones than for desktops and tablets — lower by 160 percent and 145 percent, respectively. If that seems out of whack, the report suggests smartphone users might actually convert while they’re in a physical store, which is harder to track than a click on a link. Marin suggests better tracking of mobile conversions in the future.

According to Lawson, these numbers all indicate “the massive adoption of mobile and how it’s changed consumer behavior,” he said. “We’re predicting by the end of this year, 25 percent of paid search will come from mobile. It’s astounding.” (To be clear, the report says that’s 25 percent of paid search in Google, in the U.S.)

Part of why people are more likely to click on ads on a smartphone than on a desktop is as simple as the interface, Lawson explained. “You don’t have the right-hand rail there. You just have the one ad. You only see about three search results.” And successful mobile ad campaigns, he said, set about “tailoring the campaign for the mobile user and their context. They’re trying to present store location and phone number as close as possible,” rather than sending the user to a new landing page or relying on what he called an “extended browsing experience.” And if the user does navigate to an advertiser’s website, he said, the advertiser should consider “building a website or landing page that fits the mobile experience. If it’s heavy in text and you have to scroll to the left, scroll to the right, it’s not going to work.”

Those sentiments speak to the report’s suggestions of creating device-specific content and adapting to the situations in which people might conduct mobile searches. That can take time to master — as can the process of ad budgets catching up to the extent to which new technology is present in our everyday lives. “Broadly speaking, we saw lower cost per click for advertisers” in mobile, Lawson pointed out. “We’re seeing only 8 percent of budgets directed to mobile.”  When something like this breaks into and changes mainstream culture, “you have a massive adoption and then the ad dollars chase it,” he said. Lawson predicts a “very heavy investment in mobile is likely for this year.”

Adotas Senior Editor Brian LaRue has been working in journalism in some form or another for slightly longer than his entire adult life, having won his first SPJ (Society of Professional Journalists) Award while he was still in high school. Prior to joining Adotas, he served as a reporter, editor, columnist, critic and blogger, mostly for a number of daily and weekly newspapers scattered around his native Connecticut. In his off hours, Brian maintains an active parallel life as a musician and music blogger.

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