Cost-per-click ads on tablets exceed desktop costs for first time: study

By Chris Lee

In the second quarter of 2013 tablet cost-per-clicks (CPCs) exceeded desktops for the first time, with the average tablet CPC on Google 1.7 per cent higher than the average CPC on desktop. These were the key findings of The Search Agency’s latest State of Paid Search report. Meanwhile, Nielsen’s latest report found that television still dominates total ad spend, controlling 59 per cent of the overall ad market for the first quarter of 2013.

The Search Agency found that Google’s CPCs across mobile, tablet and desktop were all up from the previous quarter, with the largest increase coming – again – on tablets, up 26 per cent. Even Microsoft’s Bing search engine appears to be making inroads with clicks up nearly 13 per cent year-on-year, although they were down in the last quarter from the previous quarter by almost five per cent. Google’s cost-per-click rose by more than a fifth (21.2 per cent) quarter-on-quarter (QoQ), while Bing’s CPC remained relatively unchanged.

“Our report shows a significant rise in CPCs on mobile and tablet devices. The two main drivers of this has been the launch of Enhanced campaigns – forcing all advertisers to bid in the same way on tablet devices as they do on desktop – and auto-inclusion in the mobile auction,” Ben Gibson of The Search Agency told NMK. “The greater focus on mobile marketing has also driven up prices. Marketers will now start seeing a lower return on investment from mobile. Meanwhile, less advanced marketing personnel who haven’t been running sophisticated tablet and mobile campaigns, will benefit. This trend will only continue so we should be prepared for increasing costs as all campaigns move to Enhanced this quarter.”

Gibson continued: “We’re also starting to see the impact of Enhanced campaigns, which represents a step backwards for optimisation. Marketers can no longer optimise to tablets specifically and these devices have both a different user profile and also different requirements, making it more difficult for marketers to take advantage of the differences between desktop and tablet behaviour.”

Tablets and smartphones still on the rise

Although the rise in clicks on tablet ads were down eight per cent from the first quarter of 2013, tablet click volumes are still up 62 per cent from the same period in 2012. The Search Agency believes that increased impressions and decreased clicks may indicate a shift in matching or query mapping changes at the search engine level

Smartphones were the only type of device showing a 1.6 per cent increase in clicks compared with the first quarter. Smartphones also delivered the largest increase in advertiser spend, up 25 per cent QoQ. Meanwhile, total clicks declined 9.5 per cent year-on-year on desktops.

TV still dominates ad spend

Another study meanwhile finds television to be the dominant media type in terms of investment for the first quarter of 2013. Nielsen’s quarterly Global AdView Pulse report found television accounted for 59 per cent share of media spend share and 3.5 per cent growth globally.

Nielsen believes that television will maintain this position at least for the short term but that TV advertising was not immune to the economic problems in Europe in Q1, leading to a 2.9 per cent decrease in this region.

Decreases in print advertising continued slowly and Nielsen added that print advertising is declining around the globe.

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