Performics Benchmarking & Industry Developments Report Q3 2013


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Spend, click, CTR, CPC trends Y/Y & Q/Q in paid search, mobile and Product Listing Ads. Insights into new Q3 developments in paid search, mobile, shopping feeds, organic search, social and display

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  • We’re expecting 2013 spend to peak in Q4 (when retailers do 50% of their sales)-Budgets have been flighted to Q4 to strike while the iron is hot-Clients have eased into Enhanced Campaigns and are now comfortable to get more aggressive-Clients have created compelling mobile experiences and landing pages to get aggressive in capturing the expected explosion of mobile traffic this holiday
  • Performics Benchmarking & Industry Developments Report Q3 2013

    1. 1. Q3 2013 Benchmarking & Industry Developments Paid Search Mobile Search Product Listing Ads (PLAs) Social & Display Organic Search @Performics
    2. 2. 2 Q32013Overview MOBILE SEARCH Benchmarks: Spend, Impressions, Clic ks, CTRs, CPC Google Enhanced Campaigns PRODUCT LISTING ADS Benchmarks: Spend, Clicks, CTRs, CPC PAID SEARCH Benchmarks: Spend, Clicks & CTRs, CPCs Engine Share Google Estimated Conversions SOCIAL & DISPLAY Facebook Advertiser Investment YouTube Investment Yahoo! Stream Ads LinkedIn Sponsored Updates ORGANIC SEARCH Google Secure Search Hummingbird Bing Redesign
    3. 3. Paid Search
    4. 4. Performics aggregate U.S. client base, all engines, same store +11.2% Spend +9.3% Clicks +22.1% CTRs +1.8% CPCs PaidSearchGrowth:Overview +17.9% Spend +16.0% Clicks +6.7% CTRs +1.6% CPCs
    5. 5. Spend  11.2% increase in Y/Y paid search spend – Good acceleration from slower Q2 Y/Y, which was due to caution around GEC migration, & budget preservation for high volume in Q3 & Q4 (back to school, holiday)  Spend accelerated each month in Q3, as advertisers got more aggressive with GEC mobile bid multipliers Performics aggregate U.S. client base, all engines, same store +11.2% Spend +9.3% Clicks +22.1% CTRs +1.8% CPCs +17.9% Spend +16.0% Clicks +6.7% CTRs +1.6% CPCs
    6. 6. 1. Mobile – As mobile usage soars, advertisers focus on building compelling mobile experiences to capture traffic, enabling them invest more in mobile search – GEC tablet force-in driving increased tablet spend 2. Attribution – More tools & processes to visualize the total impact of paid search (online & offline), enabling advertisers to more confidently invest in the channel 3. Omni-channel – Linking search to all other advertising (TV, OOH, video, display, gaming consoles) to create a holistic participant experience 6 PaidSearchGrowthStimulatorsQ3
    7. 7. Clicks & CTRs  Although we are seeing fewer Y/Y impressions (impressions down 10% from Q3 2012 to Q3 2013), clicks are still increasing (9.3%) – This increases CTRs (22.1% Y/Y increase)  Rising CTRs indicate that paid search advertising is becoming more effective, which is also stimulating spend Performics aggregate U.S. client base, all engines, same store +11.2% Spend +9.3% Clicks +22.1% CTRs +1.8% CPCs +17.9% Spend +16.0% Clicks +6.7% CTRs +1.6% CPCs
    8. 8. CPCs  We’ve now seen 4 consecutive quarters of CPCs rising Y/Y – Conservative bid multipliers at the start of GEC (July, Aug.), pulling down CPCs – In Sept., Y/Y CPCs accelerated : – Advertisers got more aggressive in GEC – Sept. was very competitive for back to school Performics aggregate U.S. client base, all engines, same store +11.2% Spend +9.3% Clicks +22.1% CTRs +1.8% CPCs +17.9% Spend +16.0% Clicks +6.7% CTRs +1.6% CPCs
    9. 9.  Bing/Yahoo! spend share has grown from 20% in Q3 2012 to 23% in Q3 2013:  Increased spend driven by decreasing CPCs (improved ROI): Bing/Yahoo!GainsonGoogle Performics aggregate U.S. client base, all engines, same store Decreasing CPCs driven by ad enhancements & better processes to boost relevancy (thus quality score)
    10. 10.  Measures clicks on paid search ads on one device that end in conversions on other devices (or other web browsers)  More holistic view of conversions enables us to: – Find incremental conversions; reduce the amount of lost attribution across devices & browsers – Better visualize the impact of mobile on conversion (e.g. know when someone clicks on an ad on mobile, but later converts on desktop) to more confidently dedicate budget to mobile  We found 25% more conversions for one retailer 10 GoogleLaunches“EstimatedTotalConversions” Performics Estimated Total Conversions POV
    11. 11. Mobile Search
    12. 12. MobileSpendSharePeaksinEnhancedCampaigns Performics aggregate U.S. client base, Google only (content and search partners excluded), Sept. 2013  Mobile spend share of total paid search rose significantly in Q3 due to tablet and mobile force-in in Enhanced Campaigns (GEC)  Pre-GEC (June) v. post-GEC (Sept): – Total mobile spend share rose from 22.5% in June to 27.1% in Sept. – Tablet share rose from 13.4% in June to 17.2% in Sept. – Smartphone (mobile) share rose from 9.0% in June to 9.9% in Sept. 72.9% Desktop 17.2% Tablets 9.9% Smartphones  Y/Y increases in mobile spend:  Total mobile: 59.1%  Smartphone: 58.6%  Tablets: 59.4% GEC Migration
    13. 13.  GEC tablet force-in led to an 88% increase in tablet impressions from June (pre-GEC) to Sept. (post-GEC) – Smartphone (mobile) impressions increased 44% over same period TabletImpressionsAccelerateinQ3DuetoGEC Performics aggregate U.S. client base, Google only (content and search partners excluded), Sept. 2013 0 20 40 60 80 100 120 Mobile Impressions Mobile Tablets GEC Migration
    14. 14.  Mobile (tablets + smartphones) was 37.7% of all paid search clicks in Sept., the second highest ever after Aug. (39.8%) MobileClickShareAlsoReachesNewHeights Performics aggregate U.S. client base, Google only (content and search partners excluded), Sept. 2013  YoY increases in mobile clicks:  Total mobile: 37.2%  Smartphone: 34.4%  Tablets: 40.2% 31.1% 28.5% 32.3% 33.7% 32.4% 34.7% 34.8% 34.3% 35.3% 36.4% 37.7% 39.8% 37.7% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 0 10 20 30 40 50 60 70 Mobile Clicks Mobile Tablets % Clicks from M + T GEC Migration
    15. 15.  Historically, tablets had the highest CTRs, followed by smartphones (mobile) and desktop  But, in GEC, increased tablet competition has led to lower tablet CTRs – Now smartphones enjoy the highest CTRs, followed by tablets and desktop: TabletClick-ThroughRates(CTRs)DropinGEC Performics aggregate U.S. client base, Google only (content and search partners excluded), Sept. 2013 GEC Migration
    16. 16. AfterGECMigrationDrop,MobileCPCsBounce BackinSeptember  Uncertainty at GEC migrations in July caused advertisers to be conservative with mobile bid multipliers, leading to smaller short- term mobile CPCs increases than expected  Mobile CPCs then stabilized in Sept. as advertisers became more comfortable with GEC and got more aggressive with bid multipliers  Mobile CPCs were 42% of desktop in June, falling in GEC to 39% in July and 37% in Aug., and then bouncing back up to 45% in Sept. Performics aggregate U.S. client base, Google only (content and search partners excluded), Sept. 2013 0% 10% 20% 30% 40% 50% 3/1/2013 4/1/2013 5/1/2013 6/1/2013 7/1/2013 8/1/2013 9/1/2013 Mobile CPCs (Indexed against Desktop) Mobile CPC Index
    17. 17. Product Listing Ads (Google Shopping)
    18. 18.  PLA spend has risen from 1.4% of text ad spend in Q3 ‘12 to 4.6% of text ad spend in Q3 ’13  We expect PLA spend and click share to peak during holiday 18 PLASpendShareGrowsinQ3
    19. 19.  Although PLAs are becoming richer and more visible, searchers still click at a similar rate to desktop: 19 PLAClick-ThroughRates(CTRs)MirrorTextAds
    20. 20.  PLA CPCs have remained slightly above regular text ad CPCs in Q3  We expect PLA CPCs to rise in Q4 due to holiday competition 20 PLACPCsRemainSlightlyAboveTextAds
    21. 21. Social & Display
    22. 22.  Advertiser interest is rising as Facebook has become more direct- response focused through the addition of: – Better Tracking: view-through, conversion pixels – Facebook Ad Exchange (FBX): Advertisers can now better target (e.g. by browsing history). A user’s recent browsing data is more likely to indicate intent to purchase than Facebook’s other targeting options (e.g. profile demographics or interests). – Ads that direct traffic off-site 22 FacebookAdvertiserInvestment
    23. 23.  Continuous news stream where Stream Ads appears between every 10–15 articles on Yahoo! Home, News, Travel & Finance  CPC-based; target based on DMA, city, state, gender  Stream Mail runs on top of inbox  We’re seeing higher ROI than other contextual ad types 23 Yahoo!StreamAds
    24. 24.  Ad (content) appears in news feed  Focus on relevant, helpful content  Content is not one-size fits all; it requires deep understanding of the users’ wants, needs & barriers  Leverage LinkedIn’s unique targeting capabilities (e.g. job titles, specific companies) 24 LinkedInSponsoredUpdates
    25. 25. Organic Search
    26. 26.  Google has been encrypting organic searches (keyword: “not provided”) for logged-in users, but will now encrypt organic searches conducted even when users aren't logged in – e.g. advertisers cannot see what organic keyword drove the click to their sites  Keyword information will still be passed from paid search ads  Update makes keyword data from paid search more valuable to inform organic search optimization, increasing the incentive for advertisers to take a OneSearch (paid + organic) approach 26 GoogletoEncryptAllOrganicSearchers Performics Google Secure Organic Search POV
    27. 27.  Google made an algorithm update (“Hummingbird”) that affects 90%+ of search results  Unlike Panda and Penguin, Hummingbird focuses less on the ranking algorithm and more on how queries are understood (conversational search)  So far the update hasn’t had much impact  Future keywords & content should focus more on longer queries and providing searchers with answers 27 GoogleHummingbirdAlgorithmTakesFlight Performics Google Hummingbird POV
    28. 28.  New logo, design & palette  Bing is also “stepping out of the search box” by integrating further into Win. 8, Windows Phone, Xbox, Maps, Word & Excel – Searchers now discover products & services well beyond the traditional search page – Search strategies must now extend everywhere to engage participants (xBox, Siri, Internet-connected TVs, GPS units, operating systems, apps, etc.) 28 NewBingIdentityHighlightsEvolutionofSearch Performics Bing Redesign POV
    29. 29. – Brands should claim listings & pages on sites that Snapshot pulls content from (e.g. Citysearch) – Ensure all info is accurate – Build fan bases, create content, encourage participation to show in Sidebar 29 BingEnhancesSidebar&Snapshot Sidebar (social) Snapshot (facts)
    30. 30.  Shows organic results as the searcher types  Not impacting paid search keywords  Shows on fact-based queries (places, people, things) 30 BingRollsOutPageZeroResults
    31. 31.  Bing-controlled listing pushes down traditional organic listings  Shows on queries where Bing is confident in user intent: 31 BingLaunchesPolePositions
    32. 32. BLOG.PERFORMICS.COM SLIDESHARE: PERFORMICS_US @Performics Benchmarking & Industry Developments Q3 2013