Adobe Systems Inc.'s Digital Index report says that paid search is on the rise due to mobile technology and social media.
The Digital Index report analyzes the advertising industry for Q3, 2012, as well as provides an outlook through Q1 2013. By studying advertiser and user behavior from over $2 billion in annualized spending, the tech giant says that overall paid search among advertisers is continuing to expand.
Mobile technology --- including the adoption of tablets and smartphones equipped with 3G and 4G networking -- is one of the main factors for this boost in growth. However, cost-per-click (CPC), conversion rates and return on investment (ROI) varied across PCs and mobile devices.
In addition, the report finds that brand engagement is growing on social media site Facebook, which could make it a valuable social advertising channel businesses can exploit to reach consumers.
David Karnstedt, senior vice president, Media and Advertising Solutions, Digital Marketing Business, Adobe said:
"Mobile and social continue to play key roles in digital marketing growth. Smart marketers are activating this data; taking advantage of opportunities such as advertising on smartphones and tablets as well as capitalizing on Facebook's platform changes to reach customers in a more personalized way. By strategically adding these elements, marketers exponentially increase their overall ROI and can then accurately attribute value to each channel."
The key findings for Q3 2012 were:
- Search advertising maintained steady growth in the United States, the U.K. and Germany.
- U.S. search spending grew by 11 percent year-on-year, and ROI improved by 26 percent. Growth rates for the U.K. and Germany rose 36 percent and 25 percent respectively.
- Facebook brand engagement grew by 896 percent year-on-year, although the value of this is up for debate. Mobile users account for almost 25 percent of Facebook likes.
- Google CPCs decreased by 10 percent year-on-year, which may be attributed to an increasing share of mobile clicks, as they are less expensive.
- There is almost twice the monetization advantage for iOS than Android in conversion rates, so optimizing mobile search for different devices may increase ROI.
Based on the analysis of the last three quarters -- beginning Q4 2011 -- Adobe believes there are a number of key trends. Search spend is expected to rise in the U.S. and Europe, especially in retail given the holiday season's rapid approach. Growth rates are expected of 15 to 20 percent, and CPCs are expected to rise in Q4 due to Christmas and Google Shopping's new, paid model.
Mobile traffic is predicted to result in one out of five paid search clicks originating from a tablet or smartphone, and therefore marketers are likely to begin tailoring campaigns towards specific mobile operating systems, including Google's Android and Apple's iOS.