Performics Benchmarking Report Q1 2013: Paid Search, Mobile, PLAs, Social & Display


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Q1 Benchmarks and Trends from Performics: clicks, spends, CPCs, CTRs in paid search, mobile paid search, product listing ads (PLAs), social and display

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Performics Benchmarking Report Q1 2013: Paid Search, Mobile, PLAs, Social & Display

  1. 1. Benchmarking Report Q1 Benchmarks & Industry Developments: Paid Search Mobile Search Product Listing Ads (PLAs) 2013 Social & Display @Performics
  2. 2. Q1 2013 Overview PAID MOBILE PRODUCT SOCIAL & SEARCH SEARCH LISTING ADS DISPLAYBenchmarks: Spend, Benchmarks: Spend, Benchmarks: Spend, Facebook Advertiser Clicks, CPC, CTR Impressions, Clicks, Impressions, Clicks, CTRs, Investment CTRs, CPC CPC Engine Share Facebook & Atlas Google Enhanced Google’s Commerce Campaigns Strategy Graph Search Google & Channel News Feed Update Intelligence Twitter API 2
  3. 3. Paid Search
  4. 4. Paid Search Growth: Overview +12.4% -38.9% Spend Spend +10.1% -27.7% Clicks Clicks +2.1% -15.5% CPCs CPCs +25.0% +8.9% CTRs CTRsPerformics aggregate U.S. client base, all engines, same store
  5. 5. Spend  We saw similar Y/Y spend growth as last quarter +12.4% -38.9% (12.3%) Spend Spend  Q/Q spend is down coming out of holiday  Drivers of Y/Y spend +10.1% -27.7% growth: Clicks Clicks – Strong Jan. (post-holiday promos) – Increased 2013 mobile +2.1% -15.5% investments CPCs CPCs – More data & tools for faster, more informed budget- optimization decisions +25.0% +8.9% across channels (online & CTRs CTRs offline)Performics aggregate U.S. client base, all engines, same store
  6. 6. Clicks  Similar Y/Y click growth as last quarter (9.5%) +12.4% -38.9%  Q/Q clicks down coming Spend Spend out of holiday  Drivers of Y/Y click growth: – Spend increases +10.1% -27.7% – A richer search page that Clicks Clicks drives more clicks (e.g. Video in Ads, Image Ads, Google Shopping (PLAs), +2.1% -15.5% Social Integration (G+ Endorsements in Ads)) CPCs CPCs – High mobile click-through +25.0% +8.9% CTRs CTRsPerformics aggregate U.S. client base, all engines, same store
  7. 7. CPCs  After CPCs fell YoY for the first 3 quarters of 2012, +12.4% -38.9% we’ve now seen 2 Spend Spend consecutive quarters of CPCs rising YoY +10.1% -27.7%  Q1 CPCs were driven by Clicks Clicks post-holiday promos in Jan. +2.1% -15.5% – CPCs may fall in Q2 as it’s CPCs CPCs not the most competitive time for retailers +25.0% +8.9% – However, as Enhanced Campaigns roll out CTRs CTRs (summer) CPCs could risePerformics aggregate U.S. client base, all engines, same store
  8. 8. CTRs  Drivers of CTR lifts: – High smartphone & tablet +12.4% -38.9% click-through – Tablets driving highest Spend Spend CTRs of all devices – Fewer YoY impressions for some of our major retailer +10.1% -27.7% clients Clicks Clicks +2.1% -15.5% CPCs CPCs +25.0% +8.9% CTRs CTRsPerformics aggregate U.S. client base, all engines, same store
  9. 9. Bing/Yahoo! Gains Share YoY Bing/Yahoo!’s share of overall paid search clicks has grown from 15.3% in Q1 2012 to 22.4% in Q1 2013 Spend share has grown from 19.2% to 22.7% This is due to a decrease in Bing/Yahoo! CPCs (thus driving better ROI), triggered by relevancy levers like: – Sitelinks – Improvement to organization around match types – Increased emphasis on negative keywordsPerformics aggregate U.S. client base, all engines, same store9
  10. 10. Mobile Search
  11. 11. Mobile Search Spend Share Holds Steady Mobile (tablets + smartphones) was 22.3% of total paid search spend in Mar. Advertisers are dedicating more budget to mobile to engage participants, 77.7% who are increasingly using mobile Desktop 9.1% Tablets YoY increases in mobile spend:  Total mobile: 52.1% 13.2%  Smartphone: 25.6% Smartphones  Tablets :77.3%Performics aggregate U.S. client base, Google only(content and search partners excluded), March 2013
  12. 12. Mobile Usage Accelerates In 2013, Driven by Tablets Mobile (tablets + smartphones) was 31.8% of all search impressions in Mar., the second highest ever after Feb. (32.4%) 67.2% Increases simply due to mobile usage, especially a high YoY tablet Desktop impression increase (115%) 18.9% Tablets YoY increases in mobile impressions:  Total mobile: 77.3% 13.9%  Smartphone: 54.0% Smartphones  Tablets :115.0%Performics aggregate U.S. client base, Google only(content and search partners excluded), March 2013
  13. 13. Mobile Click Share Reaches New Heights Mobile (tablets + smartphones) was 35.8% of all paid search clicks in Mar., the second highest ever after Feb. (35.9%) 64.2% Mobile click share growth is due to increased mobile spend Desktop 18.5% Tablets YoY increases in mobile clicks:  Total mobile: 46.8% 17.3%  Smartphone: 23.9% Smartphones  Tablets :82.7%Performics aggregate U.S. client base, Google only(content and search partners excluded), March 2013
  14. 14. Mobile Still Driving Better Click-Through Tablets continue to enjoy the highest CTRs, followed by smartphones, then desktop 14
  15. 15. The Mobile CPC Gap Widens Since holiday, we’ve seen the mobile CPC gap widen. In March: – Tablet CPCs were 63% of desktop CPCs (they were around 80% of desktop CPCs in Nov. & Dec.) – Smartphone CPCs were 40% of desktop CPCs – Smartphones have lower CPCs because advertisers can generate high quality scores through relevancy factors that increase click-through (like location targeting & click-to-call) Enhanced Campaigns (summer) may erase the tablet gap 15
  16. 16. Google Enhanced Campaigns: Search by IntentBecause participants think of devices as fluidly connected, AdWords will now be designed to managehybrid desktop and mobile campaigns per context (intent), not per device. Time: 8:30AM, Location: Manhattan, Device: Phone With Google Enhanced Campaigns, marketers can deliver search ads based on user intent. What intent does a user have when he searches for “coffee?” Well, that depends on where he is, what time it is and what device he’s on. He may want a coffee shop or home coffee delivery. Enhanced Campaigns enable marketers to make cross-device, automated 16 inferences based on participant data , at scale Time: 9:30PM, Location: Manhattan, Device: Laptop
  17. 17. Google Enhanced Campaigns: CPC Impact We’re not yet seeing the impact of Enhanced Campaigns on CPCs, as the large majority of our advertisers will wait to migrate until summer (now July 22nd forced migration date) It’s possible, however, that CPCs may rise: TABLETS SMARTPHONES • Tablets will roll into desktop •Google will opt all campaigns into smartphones (however, advertisers can • Tablets are 18.5% of paid search clicks, at effectively opt out by setting mobile bid 63% of desktop CPCs multipliers at -100%) Tablet & desktop CPCs will blend together Smartphones are 17.3% of paid search clicks, (weighted) as Enhanced Campaigns launch, at 40% of desktop CPCs but advertisers may still compete just as hard on desktop, thus erasing any prior tablet CPC By increasing competition on smartphones, efficiencies over time Google may pull up smartphone CPCs 17
  18. 18. Product Listing Ads(Google Shopping)
  19. 19. Google Product Listing Ads (PLAs) Overview +58% -74% Spend Spend +68% -38% Impressions Impressions +160% -37% Clicks Clicks -39% -59% CPCs CPCs +55% 1% CTRs CTRsPerformics aggregate U.S. client base, Google only, same store
  20. 20. Spend  A big drop in CPCs coming out of holiday resulted in +58% -74% drops in spend Spend Spend  Q1 spend was 1.5% of paid search budgets in Q1 +68% -38% vs. 3.6% in Q4 Impressions Impressions  The same volume of +160% -37% impressions & clicks were Clicks Clicks available in Q4 & Q1, but advertisers either: -39% -59% – Did not carry specific Q4 CPCs CPCs PLA budgets into Q1 or – Q4 PLA spend came out of +55% 1% holiday war chests. Now CTRs CTRs advertisers need time to test PLAs to justify budgets.Performics aggregate U.S. client base, Google only, same store
  21. 21. Impressions & Clicks  PLA impressions & clicks as a % of overall paid +58% -74% search impressions & Spend Spend clicks were similar in Q4 & Q1 (3% to 4%) +68% -38% Impressions Impressions +160% -37% Clicks Clicks -39% -59% CPCs CPCs +55% 1% CTRs CTRsPerformics aggregate U.S. client base, Google only, same store
  22. 22. CPCs  PLA CPCs dropped significantly after holiday +58% -74% – In Q4, PLAs were roughly in Spend Spend line with regular paid search CPCs, but then fell to +68% -38% be just 45% of regular CPCs Impressions Impressions in Q1 +160% -37%  PLA CPCs are lower than Clicks Clicks regular CPCs because they don’t convert as well -39% -59% – Searchers browse/research CPCs CPCs by clicking on multiple PLAs, but only buy from one +55% 1% – Return on ad spend is about CTRs CTRs half as compared to regular paid searchPerformics aggregate U.S. client base, Google only, same store
  23. 23. CTRs  PLA CTRs are slightly higher than regular text ad +58% -74% CTRs: Spend Spend  2% higher in Q1 +68% -38% Impressions Impressions +160% -37% Clicks Clicks -39% -59% CPCs CPCs +55% 1% CTRs CTRsPerformics aggregate U.S. client base, Google only, same store
  24. 24. Google’s Commerce Strategy v. Amazon Google has been focused on building vertical search engines, or “apps,” within the search page (Google Shopping (PLAs), Hotels, Flights) – At Performics, we’re calling this trend Engine App-ification: – Engine App-ification is Google’s response to the fact that participants use vertical sites for vertical results – According to Forrester, 30% of shoppers now start their searches on Amazon; only 13% start their searches on Google 24
  25. 25. Google Channel Intelligence (CI) Acquisition In Feb., Google announced that it had agreed to acquire Channel Intelligence The CI purchase is the next step in Google’s commerce plan CI will bolster Google Shopping (PLAs), which will only become more important to advertisers as Google seeks to build a Shopping catalog that can compete with Amazon In this new landscape, where shopping and search are one, retailers must have an integrated shopping feeds-search experienceFull Performics POV 25
  26. 26. Social & Display
  27. 27. Facebook Advertiser Investment Facebook’s new products & tools have enabled our clients to invest more: – View-through Tracking: We can now quantify leads & sales (not just fans gained), enabling advertisers to invest more direct-response dollars – 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). – Atlas, Graph Search & the new News Feed may further spur advertiser investment throughout the rest of 2013 27
  28. 28. Breaking From the “Walled Garden” In Feb., Facebook announced that it agreed to acquire the Atlas Advertiser Suite from Microsoft Facebook has been a self-contained channel (“walled garden”); data derived from Facebook’s users could only be used to optimize ads on Facebook With Atlas, Facebook instantly becomes a cross-web network, with all of Atlas’s publisher relationships in place Atlas will better enable advertisers to leverage Facebook’s massive participant dataset to serve ads across the webFull Performics POV 28
  29. 29. Facebook Graph Search & The Human Algorithm People are moving beyond traditional engines to places like TripAdvisor or Quora to get search results influenced by friends. Performics calls this The Human Algorithm. – Graph Search uses social signals to rank results Graph Search launched in Jan. & search volume is still low; but once it takes off, it will be a key consideration for brands – Brands must used paid & owned media to spur creation of earned media to rank in Graph Search – Search marketers must think less about pleasing algorithms and more about pleasing participantsFull Performics POV 29
  30. 30. The New News Feed Richer content, with photos at the center Easier for users to surface the most relevant content – Therefore, advertisers must produce even richer content to achieve visibility Same experience across desktop & mobile, enabling advertisers to easily create consistent experiences across devices Potential for new advertiser opportunities (e.g. new units or new targeting capabilities)Full Performics POV 30
  31. 31. A New Revenue Source for Twitter In Feb., Twitter released its new API (it will charge advertisers to connect) By allowing companies to build on its API, Twitter will more effectively compete with Facebook, which sees 60% of its ad revenue come through its API The API will allow advertisers to measure, optimize, and promote their content immediately as events unfold As third-party partners build on the API, marketers will find greater ease of use and access to Twitter’s products–social listening, content development, paid promotionFull Performics POV 31
  32. 32. Benchmarking ReportBLOG.PERFORMICS.COMSLIDESHARE: PERFORMICS_US@Performics