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RKG digital marketing report 2014Q2

Strategic marketing KPIs on paid search, organic search & social, comparison search engine and display. Concise and essential !

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RKG digital marketing report 2014Q2

  1. 1. Q2 2014
  3. 3. EXECUTIVE SUMMARY Paid Search • Google paid search spending growth accelerated to 24% Y/Y in Q2. Paid clicks rose 13%, while CPCs rose 10% as advertisers responded to improving conversion performance. • Bing Ads search spending grew 19% Y/Y across Bing, Yahoo and their search partners. Paid clicks rose 22%, but CPCs fell 3% due to a mix shift to mobile. • Advertiser spending on Google Product Listing Ads (PLAs) and Bing Product Ads rose 72% Y/Y. For retailers, PLAs produced 26% of Google search clicks overall. • Smartphones generated 19% of paid search clicks and 9% of search spend, while tablets produced 18% of clicks and 19% of spend. Smartphone clicks rose 47% Y/Y, compared to a 43% increase for tablets and a 2% decline for desktop. • Google conversion tracking data and estimates show that cross-device tracking surfaces 7% more conversions overall and 14% more smartphone conversions that would otherwise not be attributed to search. Organic Search & Social • Organic search produced 31% of all site visits in Q2 2014, which was down from 36% in the first half of 2013. As the major search engines work to better monetize their listings with larger and more appealing ads, organic search volume will continue to get squeezed in favor of paid. • Smartphones and tablets produced a combined 34% of organic search visits in Q2, up from 31% in Q1. Both iPhone and Android picked up share, while iPad traffic share was flat. • Social media sites produced 1.6% of all sites visits in Q2. Facebook continues to lead the way with 51% of visits produced by social media sites, but its contribution has slipped as Pinterest has become a larger traffic source for retail sites. • Mobile devices accounted for 42% of visits produced by social media in Q2. That was up two percentage points from Q1 and 17 points from a year earlier. Comparison Shopping ENGINES • The eBay Commerce Network and PriceGrabber both made large gains in CSE spend share compared to a year earlier as all other major engines saw losses. • Among advertisers running both Amazon Product Ads and Google PLAs, revenue volume from Amazon’s program was just 7% that of PLAs in Q2, down from 9% in Q1. DISPLAY ADVERTISING • For advertisers actively advertising on the Google Display Network (GDN) and running AdWords paid search ads, GDN accounted for 6% of total Google spending, the same rate as the previous quarter.
  5. 5. PAID SEARCH 5 Total Paid Search Spending Growth Accelerates to 23% Y/Y After a slow start to the calendar year, paid search spending growth accelerated at the end of Q1 and remained elevated through Q2. Advertisers responded to improving conversion performance by pushing CPCs up 8% Y/Y to capture additional volume. Paid search click growth improved to 14% Y/Y from an 11% growth rate in the prior quarter. Overall U.S. Paid Search Trends Relative to Q2 2013 +45% +30% +15% 2013-Q2 –15% BASELINE ClicksAd Spend CPC 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 +8% +14% +23% Google Paid Search Clicks Up 13% Y/Y, CPC Growth Continues to Rise While advertisers are paying considerably lower CPCs for their own brand terms due to Google Ad Rank changes in 2013, total Google search CPCs rose 10% Y/Y on the strength of non-brand text ads and PLAs. Click volume improved 13% Y/Y resulting in 24% growth in ad spend. This was an appreciable increase from 17% Y/Y spending growth in Q1. Google Overall U.S. Paid Search Trends Relative to Q2 2013 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 +10% +13% +24% ClicksAd Spend CPC +45% +30% +15% 2013-Q2 –15% BASELINE Bing Ads Delivers Big Increase in Click Volume, But CPCs Slip Y/Y While Bing Ads was able to deliver an impressive 22% Y/Y increase in clicks, that additional volume may have come at the expense of traffic quality. Responding to a slight dip in conversion performance, advertisers brought their CPCs down 3% from a year earlier. We may be seeing the effects of a relative shift to mobile, as we did see Bing Ads appear to make strides in that area. Bing Ads Overall U.S. Paid Search Trends Relative to Q2 2013 –3% +22% +19% +40% +20% +10% 2013-Q2 –20% BASELINE –10% +30% –30% 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 ClicksAd Spend CPC
  6. 6. PAID SEARCH 6 PLA CPC Growth Helps Drive Google Non-Brand Spending Up 29% While Google non-brand text ad CPCs rose 12% Y/Y, CPCs for PLAs rose nearly 35% and helped push total non- brand spending up 29% Y/Y in Q2. Google advertisers have been able to push the gas on PLAs because the ROI there still remains higher than that for non-brand text ads. Google Non-Brand U.S. Paid Search Trends Relative to Q2 2013 +18% +9% +29% 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 +50% +25% 2013-Q2 BASELINE –25% ClicksAd Spend CPC Product Ads Still Producing Huge Growth with Spend Up 72% Y/Y Including Google’s PLA format and the Product Ad format that Bing Ads introduced in late 2013, search advertiser spending on image-based product ads rose 72% Y/Y in Q2 on a 28% increase in click volume and a 35% increase in CPC. Text ad spending growth ticked up from 6% Y/Y in Q1 to 11% in Q2. Overall U.S. Paid Search Growth by Format Q2 2014 Ad Spend Clicks CPC Text Ads PLAs/Product Ads60% 40% 20% 80% 0% Bing Ads Non-Brand Spending Growth at 19% Although we didn’t see Bing Ads achieve the same year-over-year non- brand spending growth as Google in Q2, Bing Ads spend nearly reached its Q4 levels. Non-brand click volume rose 26% Y/Y, while CPCs fell 6%. As noted above, this is indicative of a greater contribution from mobile. Bing Non-Brand U.S. Paid Search Trends Relative to Q2 2013+40% +20% 2013-Q2 BASELINE –20% 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 –6% +26% +19% ClicksAd Spend CPC –40% 72% 11% 4% 28% 7% 35%
  7. 7. PAID SEARCH 7 PLA Click Share Flat from Quarter to Quarter Following a decent jump from Q4 to Q1 as Google gave PLAs more prominence by serving them above the organic listings more frequently, PLA click share was flat from Q1 to Q2. For retailers running both text ads and PLAs, PLAs generated 26% of Google paid search clicks overall and 50% of non-brand clicks. PLA Share of Google Paid Search Clicks Aggregate Results - U.S. Retail60% 40% 20% 0% 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 26% 50% Non-Brand Overall 30% 50% 10% Despite Large CPC Rise, PLA ROI Remains 13% Better than Comparable Text Ads Even with CPCs running 35% higher than a year earlier, advertiser ROI from PLAs was still 13% above that for comparable non-brand text ads in Q2. Although it is not a pure apples- to-apples comparison because of differences in query mix, PLAs also generated click-through rates that were 2.5X that for non-brand text ads and conversion rates that were 37% higher. PLA Performance vs Text Ads Median Site Results - U.S. Retail CPC CTR ROI Conv. Rate AOV +150% +50% Text Ads –100% +100% –50% BASELINE 43% 1% 13% 149% –65% 13% –26% 37% –18% –15% PLAs vs Non-Brand Text AdsPLAs vs Overall Text Ads PLA CPCs Slip Again Compared to Text Ads, But Have Come a Long Way Before Google completed its transition to the paid Google Shopping model, we found PLA CPCs to run 23% lower than comparable text ads. That gap quickly narrowed and PLA CPCs eventually overtook text ads in late 2013. While PLA CPCs have slipped versus text ads following the Q4 holiday season, that trend will likely reverse later this year. Google PLA CPC vs Non-Brand Text Ads Median Site Results - U.S. Retail+10% Non-Brand Text Ads -25% BASELINE +5% -5% -10% -15% -20% 1% Q1 Q2 2013 Q3 Q4Q2 2012 Q3 Q4 Q1 2014 Q2
  8. 8. PAID SEARCH 8 PLA Click Share Varies by 36% Across Retail Sub- Industries In Q2, we once again found that the contribution of PLAs to click volume was greatest for Consumer Electronics retailers where PLAs provided 65% of non-brand Google clicks. At the low end, PLAs were 29% of non- brand Health & Beauty clicks. Apparel retailers generated 37% of their non- brand clicks from PLAs. PLA Share of Non-Brand Google Paid Search Clicks Q2 2014 Median Site Results - U.S. Retail Flowers & Gifts Cars & Auto Health & Beauty Apparel Sporting Goods Books Home & Garden Consumer Electronics 60% 40% 20% 0% 30% 50% 10% 70% Bing Product Ads Edge Up in Volume and Spend Share Among sites participating in the Bing Product Ads program, the new format produced 8% of Bing Ads non-brand search clicks and spend. That was just a modest uptick from Q1 where the same metrics were 7%. The revenue contribution of Product Ads fell slightly from quarter to quarter. Bing Ads — Product Ads Share of Non-Brand Median Site Results Ad Spend Clicks Revenue 2014-Q2 2014-Q1 2013-Q4 0% 5% 10% 15% Bing Product Ads Produce 48% Higher Revenue Per Click than Text Ads While Bing Product Ad CPCs ran slightly below those for non-brand text ads, revenue per click was 48% higher in Q2. For comparison, Google PLA revenue per click was just 17% higher than that for non-brand text ads, suggesting that Bing Ads has a big opportunity to expand the serving of Product Ads to a broader range of queries. Bing Ads — Product Ads vs Non-Brand Text Ads Q2 2014 Median Site Results CPC RPC CTR 48% -8% 19% +20% +50% Text Ads BASELINE Non-Brand +30% +40% +10% 8.3% 7.1% 6.5% 5.9% 7.1% 7.6% 8.3% 12.2% 10.3% 29% 30% 33% 37% 44% 48% 49% 65%
  9. 9. PAID SEARCH 9 GoogleGainsSpendShare,BingAdsGainsonClicks We find Google gaining roughly half a percentage point of paid search spend share from year to year in Q2. At the same time, Bing Ads has gained a little over one point of paid search click share. As Google PLA CPCs have caught up to and surpassed text ad CPCs, Google has exhibited relative strength on the spend side. Google Share of U.S. Paid Search 2014-Q2 2013-Q2 81% 82% 83% Ad Spend Clicks Google Commanding Higher Non-Brand CPCs Due to Advantage in Conversion Rate In Q2, the conversion rate for non- brand Google search ads was 52% higher than the same metric for Bing Ads.Withaverageordervalueroughly equal for the two engines, Google commanded 48% higher non-brand CPCs than Bing. The contribution of Google PLAs is a large factor here as PLAs produced a 37% higher conversion rate than text ads. Non-Brand: Google Metrics vs Bing Ads Q2 2014 Median Site Results +20% +40% +60% +10% +30% +50% CPC CTR ROI Conv. Rate AOV Non-Brand BASELINE Bing Ads 48% 8% 9% 52% 0.4% Brand Ads Still Considerably Less Expensive on Google Although search ads for most sites’ own brand terms are much less expensive than non-brand ads for both engines, brand ads cost 34% less per click on Google in Q2 than Bing Ads. Google brand ads also produced much higher click-through rates, suggesting advertisers face greater competitive pressure for their brand on Bing compared to Google. Brand: Google Metrics vs Bing Ads Q2 2014 Median Site Results Non-Brand BASELINE Bing Ads +50% +100% +200% +150% —50% CPC CTR ROI Conv. Rate AOV –34% 183% 93% 14% 4% 82.2% 82.8% 82.6% 81.5%
  10. 10. PAID SEARCH 10 Google Search Partner Contribution On the Decline With its Q2 earnings report, Google is set to provide CPC and click growth broken out by property for the first time. Our results suggest that Google’s search partner network has slipped more on the CPC side compared to as its share of ad spend has fallen nearly 5% in the past year, while its share of clicks fell just 2%. Google Search Partner Share Median Site Results 2014-Q2 2013-Q2 Ad Spend ShareClick Share 0% 5% 10% 15% 20% 18% 17% 17% 12% PLAs Not Well-Monetized on Google Search Partner Sites While PLAs produced 26% of total Google search clicks this past quarter, they only produced 7% of Google search partner clicks. That is up from providing nearly 0% of partner clicks a year earlier, but the relatively slow monetization of PLAs on the partner network may explain a large part of the decline in search partner share that we see. PLA Share of Google Paid Search Clicks 22% 0% 10% 20% 30% 2014-Q22013-Q2 Search Partners Google Overall 26% 7% 0.1% Search Partner Conversion Rates About Half That of Although we’ve seen some improvement in the conversion rates produced by Google search partners in the past year, partner conversion rate still ran 47% below that of traffic, according to Google conversion tracking data. Advertisers have limited ability to account for this performance difference beyond turning partner traffic completely off. Google Search Partner Conversion Rate vs Median Site Results 2014-Q22013-Q2 –20% –10% BASELINE –52% –47%–40% –30% –60% –50%
  11. 11. PAID SEARCH 11 Smartphones and Tablets Combine for 37% of Paid Search Clicks At 37%, mobile traffic share was up one percentage point from Q1. Smartphones provided the bulk of that lift as tablet traffic share was essentially flat at 18%. While we saw larger mobile gains for Bing Ads, those were washed out by Google’s much greater volume. Mobile Share of Paid Search Clicks 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q22012-Q4 Tablet Smartphone 10% 13% 14% 16% 16% 18% 18% 9% 12% 14% 14% 16% 18% 19% 0% 10% 20% 40% 30% Mobile’s Share of Bing Ads Clicks Jumps 8% from Quarter to Quarter While mobile’s share of Google traffic was roughly flat from Q1 to Q2 at 38%, we saw a surprisingly large jump in mobile’s contribution to Bing Ads traffic. In Q1 we found that mobile produced 25% of Bing Ads clicks, but that figure rose to 33% in Q2. We cannot conclusively explain the rapid increase, but it may reflect increased broad matching on mobile and greater adoption of Bing’s Enhanced Campaigns functionality. Mobile Click Share by Engine 0% 10% 20% 40% 30% Google Bing Ads Combined Smartphone Tablet Mobile Share of Paid Search Spend Reaches 28% Although they generated a higher share of clicks than tablets, smartphones produced less than half the spend that tablets did in the second quarter due to smartphone’s poorer conversion performance. In Q2, 9% of paid search spend went to smartphone traffic, while 19% of spending went to tablet traffic. Mobile Share of Paid Search Ad Spend 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q22012-Q4 0% 10% 20% 30% Tablet Smartphone 10% 5% 37.5% 32.7% 19.1% 16.3% 18.4% 16.5% 14% 15% 17% 18% 20% 19% 7% 9% 6% 7% 7% 9% 15.5% 21.5% 24.1% 23.9% 25.2% 26.9% 27.7% 19.5% 25.1% 27.9% 29.6% 32.5% 35.5% 36.5%
  12. 12. PAID SEARCH 12 Desktop Traffic Click Volume Down 2%, Despite Aggressive CPC Increases Reflecting improvement in the value produced by desktop traffic, advertisers pushed CPCs up 16% Y/Y in Q2. However, desktop click volume still fell 2% Y/Y. Smartphone CPCs were down 12% Y/Y, but click volume rose 47%. Smartphone CPC growth is likely to turn positive in Q3 as we pass the anniversary of the Enhanced Campaigns transition, when many advertisers opted to raise their ROI targets for smartphone traffic. Year-Over-Year Growth by Device Class Ad Spend Clicks CPC Smartphone Desktop Tablet 14% 30% 56% 47% 43% –2% 16% –12% 9% 20% 0% –20% 40% 60% Tablet Revenue Per Click Continues to Slide, Now at 77% of Desktop Levels Although tablets are grouped with desktop under Google’s Enhanced Campaign model, their conversion performance has not been as strong for a number of quarters and that gap has only widened. Bing Ads recently announced that they will also group tablets with desktop, but allow advertisers to bid tablets down by as much as 20%. These results suggest that this range will not be sufficient for many sites. Revenue Per Click vs Desktop 120% 60% 40% 20% 80% 100% 0% 77% 34% Desktop TabletSmartphone 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 Smartphone CPCs Reverse Declines Compared to Desktop Following three quarters of declines relative to desktop, smartphone CPCs edged back up in Q2 coming in at 41% of desktop levels. Smartphone revenue per click has been improving and more advertisers have been incorporating Google’s cross-device tracking insights into their ROI target considerations. Google Mobile CPC vs Desktop 120% 60% 40% 20% 80% 100% 0% 93% 41% Desktop 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 TabletSmartphone
  13. 13. PAID SEARCH 13 Old Browser Versions Yield Poor Performance While Google will take into account the type of browser a searcher uses in some of the automated bidding adjustments advertisers can allow Google to make for them, Google has not provided a mechanism for advertisers to do this themselves. That is unfortunate since browser version can be highly predictive of conversionperformance,withSafari7users producing a 96% higher than average revenue per click and users of old versions of Firefox producing a 60% lower than average RPC. Revenue Per Click by Desktop Browser vs Overall Average OtherChrome Chrome34 Chrome35 OtherFirefox Firefox28 Firefox29 OtherMSIE MSIE9 MSIE10 OtherSafari Safari6 Safari7 OtherBrowsers 15% 4% –60% 14% 18% –39% –11% –6%0.6% 0.5% 22% 82% 96% –75% +100% +50% –25% +25% +75% Average BASELINE Overall –50% iPad Tablet Traffic Share at 79%, Windows Tablets Reach 7% We find the iPad losing about six percentage points of tablet traffic share over the past year, with most of those losses going to touch- compatible Windows computers. The latter group of devices includes Microsoft’s Surface, but also a number of computers that may be better grouped with traditional laptops in their form and function. Share of Tablet Paid Search Clicks Other Tablets 75% 50% 25% 0% 100% iPad Other Tablets 4% 3% 2% 0% 5% 1% Windows Tablet Other Android Kindle Galaxy Tablet Nexus Tablet 6% 7% 2014-Q2 2014-Q1 2013-Q3 2013-Q2 2013-Q1 2013-Q4 Android Tablets Weighing Down Tablet Revenue Per Click While iPad traffic generates a revenue per click that is about 10% lower than that from desktop and laptop computers, the best performing Android tablet produces a revenue per click that is only half that seen from the desktop group. These results demonstrate that user context beyond the three main device categories can greatly shift performance. Revenue Per Click by Device vs Desktop Q2 2014 100% 80% 60% 20% 0% 40% 120% Desktop Windows Tablet Desktop iPad Nexus Tablet Other Android Tablets Other Tablets iPhoneKindle Fire Android Phone Windows Phone 116% 100% 92% 50% 45% 42% 41% 31% 28% 6%
  14. 14. PAID SEARCH 14 Smartphones Produce 25% of Cross-Device Conversions, 12% of Traditionally Tracked Conversions According to Google conversion tracking and estimates, smartphones contributed 12% of the conversions that took place on the same device as the ad clicks that led to them. Among the pool of additional orders surfaced from cross-device tracking, smartphones contributed nearly 25% of orders. Share of Cross-Device Conversions Share of Single-Device Conversions Desktop 72% Tablet 15% Smartphone 12% Desktop 59% Tablet 16% Smartphone 25% Cross-Device Tracking Surfaces 7% More Orders Overall, 14% More Smartphone Orders In anticipating the impact Google’s cross-device estimates may ultimately have on advertiser spending, we see that cross-device tracking surfaces 7% more orders overall, but 14% more smartphone orders. That will not be nearly enough to completely close the gap in CPCs between smartphones and desktop, but more advertisers are taking these figures into account in setting smartphone ROI targets. Lift in Conversions from Including Cross-Device 16% 4% 8% 12% 0% Total Desktop Tablet Smartphone 7% 6% 7% 14% Not Provided Stable at Nearly 80% of AdWords Clicks The day after Google announced it would stop passing search queries to advertisers via referrer, Not Provided share of Google paid search jumped to 45%. We saw another large increase in Not Provided share a little over a week later and it has remained at a little below 80% since then. Advertisers can still gain insights into user queries via Google’s search terms report. Not Provided Share of Google AdWords Paid Search Traffic100% 50% 75% 0% 78% April 25% May June July 2014 2014 2014 2014
  16. 16. ORGANIC SEARCH & SOCIAL 16 Organic Traffic Share Down as More Clicks Become Paid Although the share of all site visits generated by organic search has held steady at 31% for three quarters, that is down appreciably from an average of 36% for the first half of 2013. As the major search engines work to better monetize their listings with larger and more appealing ads, organic search volume will continue to get squeezed in favor of paid. Organic Search Share of All U.S. Site Visits 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 31%30% 20% 10% 40% 50% 0% Bing Slowly Gaining Search Share at the Expense of Smaller Engines Over the past year, we have seen Bing’s share of organic search visits increase from 8% in Q2 2013 to nearly 10% in Q2 2014. These gains have come at the expense of second-tier search engines, as well as Google. Note that these figures represent site visits, so any shifts in SERP monetization may exaggerate or understate the underlying trends in raw search query volume. U.S. Organic Search Visit Share by Engine Other Engines Google Other Engines Bing Yahoo Other 10% 8% 6% 12% 0% 4% 2% 60% 40% 20% 80% 100% 0% 2014-Q2 2014-Q1 2013-Q3 2013-Q2 2013-Q1 2013-Q4 Google Owns U.S. Mobile Search with 88% Share, But Yahoo Edging Up In Q2 2014, 88% of mobile organic search visits were produced by Google, compared to 81% across all devices. Yahoo has seen its share of mobile organic tick up though, from 7% in Q2 last year to nearly 8% this year. Bing has made smaller gains over the same time period and remains a distant third, producing just 4% of mobile organic search visits. Share of U.S. Mobile Organic Search by Engine Q2 2014 Google Yahoo Bing 88% 8% 4%
  17. 17. ORGANIC SEARCH & SOCIAL 17 2014-Q12013-Q2 2013-Q3 2013-Q4 2014-Q2 Tablets and Smartphones Account for 34% of Organic Search in Q2 On the growth of iPhone and Android traffic, mobile share of organic search rose from 31% in Q1 to nearly 34% in Q2. Both device groups saw their share rise 1.3 percentage points from Q1 to Q2 with the iPhone accounting for 12% of visits in Q2 and Android devices accounting for 10%. iPad traffic share was flat at a little over 11% in Q1 and Q2. Mobile Share of U.S. Organic Search Visits Android iPhoneiPad Other35% 20% 10% 0% 30% 25% 15% 5% 12% 11% 10% Organic Search Visits Fall Year-Over-Year Despite Mobile Growth Mobile search visits were up 18% year-over-year in Q2, but that was not enough to offset desktop declines, and total organic search visits fell 7%. The overall decline is indicative of a shift from organic to paid search, where growth has been robust and even accelerating. Y/Y Growth in Organic Search Visits Q2 2014 Mobile Overall 5% 0% –5% 10% –10% 15% 20% 18% –7% Bing Not Keeping Pace in Organic Mobile Visits Google and Yahoo were neck and neck in the share mobile contributed to each engine’s organic search visits in Q2, while Bing remained well behind both. In Q2, 37% of Yahoo organic search visits were mobile, up 10 percentage points from a year earlier. For Google, 36% of organic search visits were mobile, which was up 7 points. Bing saw 17% of its visits from mobile in Q2 2014, which was just a 4 point increase from a year earlier. Share of Each Engine’s Traffic from Mobile Google Yahoo Bing 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 30% 20% 10% 40% 0% 28% 29% 31% 31% 33% 36% 23% 27% 31% 30% 37% 37% 8% 13% 16% 14% 16% 17%
  18. 18. ORGANIC SEARCH & SOCIAL 18 Not Provided Visit Share Reaches 90% The share of Google organic searches that did not pass queries to site owners shot up from 40% to 80% over just a 10 week period last year. Since then, tracking the subsequent rise in Not Provided share has been more of a curiosity than anything, but we finally saw it reach 90% at the end of Q2. As we’ve noted before, queries still being passed are skewed towards certain web browsers and likely do not represent total Google queries very well. Not Provided Share of Google Organic Search Traffic 90% Q 1 Q 2 2013 Q 3 Q 4 Q 1 Q 2 2012 Q 3 Q 4 Q 1 2014 Q 2 75% 50% 25% 0% 100% Yahoo Not Provided Share Hovering Just Above 40% Speaking of curiosities, it is interesting to see that Yahoo’s Not Provided share, as recorded by Google Analytics, has stayed only just above 40% since the engine moved to secure search earlier this year. Given that all searches on should be secure and not pass queries, we would expect the figure to run much higher. Not Provided Share of Yahoo Organic Search Traffic 30% 0% 50% 41%40% 20% 10% 2014 M ar 30 Apr 6 Apr 13 Apr 20 Apr 27 M ay 4 M ay 11 M ay 18 M ay 25 Jun 1 Jun 8 Jun 15 Jun 22
  19. 19. ORGANIC SEARCH & SOCIAL 19 Mobile Devices Produce 42% of Social Media Visits Outpacing the trends we see for search, mobile accounted for 42% of site visits produced by social media. That is up two percentage points from the previous quarter and 17 percentage points from a year earlier. Mobile Share of Social Media Visits 42% 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 30% 0% 50% 40% 20% 10% Social Media Sites Produce 1.6% of Site Visits on Average In what may be a reflection of the decline in organic Facebook reach many site owners are witnessing, average visit share from social media sites, including earned and paid traffic, rose only slightly in Q2 2014 compared to a year earlier and fell from Q1 to Q2. Although a small contributor to traffic on average, social media’s importance is variable from site to site, with some seeing nearly a quarter of their traffic from the channel. Social Media Share of All Site Visits 1.5% 1.0% 0.5% 0% 2.0% 2014-Q12013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 1.4% 1.5% 1.6% 1.6% 1.8% 1.6% Facebook Share of Social Media Visits Slips to 51% With Pinterest referrals growing rapidly, particularly for retailers, and among reports of declining organic reach, Facebook is a smaller contributor to social media referrals this year than last for the average site. In Q2 2013 Facebook produced 57% of visits from social media sites. In Q2 2014 that rate has slipped to 51%. Pinterest accounted for 21% of social visits on average, but its share was much smaller for many sites. Share of Social Media Visits Facebook Pinterest Reddit Twitter YouTube Google+ LinkedIn Other 40% 20% 0% 60% 2014-Q22013-Q257% 51% 13% 21% 23% 19% 2% 3% 2% 3% 1.5% 1% 1% 1% 0.5% 0.1%
  20. 20. Comparison  Shopping  Engines
  21. 21. COMPARISON  SHOPPING  ENGINES 21 eBay Commerce Network Up Big Year-Over-Year Same site revenue on the eBay Commerce Network was up 69% year- over-year, far outpacing all other CSEs. Nextag and Shopzilla continue to struggle to bring returns for advertisers as same site revenue decreased 62% and 35%, respectively. Same Site Revenue Growth Y/Y Q280% 40% 0% –80% –40% Amazon Product Ads NexTag eBay Commerce Network Shopzilla- Bizrate PriceGrabber 22% –62% 15% 69% –35% Amazon Spend Share Down as Advertisers Pushed Out Share of total CSE spend going to Amazon dropped from 17% in Q2 of last year to 9% in Q2 of 2014 as large advertisers were moved out of Amazon Product Ads by Amazon, ostensibly to move them into the Amazon Marketplace. With Nextag also down significantly in spend share year-over- year as a result of poor returns for advertisers, eBay and PriceGrabber have seen huge gains in spend share year-over-year. Ad Spend Share by Engine 15% 0% 35% 20% 10% 5% 25% 30% Amazon Product Ads NexTag Other PriceGrabber eBay Commerce Network Shopzilla- Bizrate 2014-Q22013-Q2 17% 15% 5% 15% 21% 28% 9% 2% 4% 33% 31% 20% Amazon Product Ad CPC Up 34% Year-Over-Year Average CPC for Amazon Product Ads was up significantly year-over- year in Q2, marking the largest Y/Y quarterly increase in CPC among CSEs for the second straight quarter. eBay Commerce Network CPC continues to hold steady as their flexible bidding options allow advertisers more ability to control CPC. CPC by Engine Amazon Product Ads NexTag Other PriceGrabber eBay Commerce Network Shopzilla- Bizrate $0.30 $0.00 $0.70 $0.40 $0.20 $0.10 $0.50 $0.60 2014-Q22013-Q2 $0.47 $0.63 $0.40 $0.49 $0.35 $0.36 $0.32 $0.39 $0.39 $0.40 $0.48 $0.53
  22. 22. COMPARISON  SHOPPING  ENGINES 22 Google & Bing Product Ad CSEs Offer Advertisers Great Returns Across all Comparison Shopping Engines, ROI was 26% higher than that of Google and Bing product ads in Q2. This is partly the result of the inefficiencies inherent in the rate card system of some CSEs, under which poorly performing products must be filtered out of the product feed as opposed to simply being bid down like search engine product ad targets. CSE vs Search Engine Product Ad ROI 60% 0% 140% 80% 40% 20% 100% 120% Google & Bing Product Ad CSE +26% Google PLA Q2 PLA CPCs Once Again Higher than Amazon Product Ads Average CPC for Amazon Product Ads was 20% lower than that of Google Product Listing Ads in Q2 after being 31% higher in Q1, when advertisers bid PLAs down as a result of decreasing demand following the holidays while Amazon’s rate card remained unchanged. In terms of CPC comparison, Q2 was much more like Q4, when CPCs for Amazon Product Ads were 18% lower than that of PLAs. Amazon Product Ads vs Google PLA CPC 60% 0% 80% 40% 20% 100% 120% Google PLA Amazon Product Ad –20% Google PLAs Continue to Grow Relative to Amazon Product Ads Among those participating in both programs, advertisers have consistently produced much more revenue from Google PLAs than Amazon Product Ads, and the difference continues to grow. Amazon Product Ads accounted for 7% as much revenue as Google PLAs in Q2 of 2014, down from 9% in Q1 and 11% in Q4 of 2013. Amazon Product Ads vs Google PLA Revenue 2014-Q12013-Q4 2014-Q2 +6% +8% +4% +2% +10% +12% 11% 9% 7% Google PLA BASELINE
  24. 24. DISPLAY ADVERTISING 24 2014-Q1 FBX Ad Spend and CPC Up Significantly in Q2 Advertisers increased their total FBX investment 72% Q/Q following a slower Q1 in which advertisers scaled back following the holiday season. The increased investment has been used to increase visibility for ad formats already in use as well as to try out formats new to the advertisers. We may continue to see CPC increase as the larger right hand rail ads recently rolled out for FBX result in less real estate and more competition. Facebook Exchange Ad Spend & CPC Q/Q 2014-Q1 2014-Q2 Ad Spend CPC 200% 100% 150% 0% 50% +72% +20% FBX CPC Up Q/Q Relative to Other Display Advertising While FBX CPC remains lower than that for other display ads, the difference is shrinking, as FBX clicks were just 24% cheaper in Q2 compared to 33% cheaper in Q1. Revenue per click remains nearly equal between the two, though FBX measured a hair higher than other display in Q2 after being slightly lower in Q1. Facebook Exchange vs Other Display Revenue Per Click –10% –25% –5% –15% –20% +5% CPC Display BASELINE Overall +2% –24% FBX Continues to Have Higher CR, Lower AOV than Other Display While FBX ads continue to convert at higher rates with smaller order values than other display ads, the gap between the two for both metrics seems to be closing as the difference in each is a meager 6%. This convergence may be a natural result of consumer behavior on social networks becoming more like that on the web as a whole. Facebook Exchange vs Other Display –10% –5% +5% +10% Conversion Rate AOV Display BASELINE Overall +6% –5%
  25. 25. DISPLAY ADVERTISING 25 Retargeting Strategy Far More Common Among Display Advertisers Between those advertisers pursuing a mixed strategy of prospecting and retargeting and those who are retargeting only, 94% of display advertisers include retargeting in their ad strategy. The share of prospecting only advertisers has dropped to 6%, down from 10% in Q1 and 12% in Q4 of last year, as more advertisers seek to take advantage of the typically higher ROI and customer retention qualities of retargeting. Percentage of RKG Clients’ Display Goals Prospect & Retargeting Retargeting Only Prospecting Only 67%6% 28% GDN Remains Small Part of Total Google Investment Google text ad and PLA spend continued to dwarf Google Display Network spend, accounting for 94% of total Google investment in Q2, the same as Q1. While Google does not reveal the share of ad revenue that is generated from the GDN, these results suggest that the percentage is fairly small. Share of Total Google Spend Google Text Ad & PLA Spend GDN Spend 100% 50% 75% 0% 25% 94% 6% Placements & Retargeting Placements & Retargeting Remain Primary Investment on GDN Advertisers continue to invest more heavily in Google Display Network placement and retargeting campaigns than contextual campaigns, as the gap between spend and CPC levels between the two only grew larger in Q2. Contextual spend was 15% that of placement and retargeting spend in Q2, compared to 27% in Q1. GDN Placements & Retargeting vs Contextual Spend CPC Placements & Retargeting Contextual 60% 0% 80% 40% 20% 100% 120% –85% –60%
  26. 26. Founded in 2003, RKG is a search and digital marketing agency that combines superior marketing talent with world-class digital media capabilities to create the industry’s most effective data-driven digital marketing solutions. RKG drives business to clients by maximizing a full range of opportunities including paid search, SEO, product listing ads, social media, display advertising and comparison shopping engine management services. In 2014, RKG became a part of Merkle, creating the largest independent search agency. RKG is headquartered in Charlottesville, VA with offices in Bend, OR and Boston, MA. For more information visit or follow the company on Twitter @rimmkaufman. ABOUT RKG, A Merkle Company @rimmkaufman METHODOLOGY Figures are derived from samples of RKG clients who have worked with RKG for each respective marketing channel. Where applicable, these samples are restricted to those clients who 1) have maintained active programs with RKG for at least 19 months, 2) have not significantly changed their strategic objectives or product offerings, and 3) meet a minimum ad spend threshold. All trended figures presented in this report represent same-site changes over the given time period. Unless otherwise specified, the data points in this report are derived from the North American market region. Merkle, a technology enabled, data driven customer relationship marketing (CRM) firm, is the nation’s largest privately-held agency. For more than 25 years, Fortune 1000 companies and leading nonprofit organizations have partnered with Merkle to maximize the value of their customer portfolios. By combining a complete range of marketing, technical, analytical and creative disciplines, Merkle works with clients to design, execute and evaluate connected CRM programs. With more than 2,100 employees, the privately held corporation is headquartered in Columbia, Maryland with additional offices in Boston; Chicago; Denver; Hagerstown; Little Rock; London; Minneapolis; Montvale, NJ; Nanjing; New York; Philadelphia; Pittsburgh; San Francisco and Shanghai. For more information, contact Merkle at 1-877-9-Merkle, visit or follow the company on Twitter @MerkleCRM. ABOUT MERKLE

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  • plabousset

    Jul. 31, 2014

Strategic marketing KPIs on paid search, organic search & social, comparison search engine and display. Concise and essential !


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