Q2 takeaways: mobile, PLAs coming on strong
Published: July 18, 2013
Author: Joe Kerschbaum
The landscape of pay-per-click (PPC) is constantly shifting, and 2013 is shaping up to be one of the most pivotal industry years in recent history.
In conjunction with Google’s just-announced Q2 results, we’ll break down what we’re seeing in device traffic and ad types — notably, a long-anticipated shift toward increased mobile, and a dramatic increase in adoption for Product Listing Ads (PLAs).
Google is reporting that, comparing Q2 to Q1, clicks are up 4% and CPCs are down 2% overall, figures that are in line with the growth of relatively less expensive traffic in mobile and PLAs. But as we drill down, we’ll see that mobile clicks themselves are getting increasingly expensive, while PLAs are getting cheaper.
Let’s dive in.
Mobile is hitting its stride
For the last few years, marketing analysts have been predicting “The Year of Mobile,” when mobile devices would finally start to take a significant portion of search volume from PCs – and while those forecasts have taken a while to come to fruition, it looks like 2013 is the moment of truth.
We’ve already seen a shift in search volume across devices. We expect this trend to continue through 2013 as more advertisers migrate to Enhanced Campaigns — and, fairly directly, mobile and tablets. This trend should become even more pronounced in 2014.
More devices are becoming a bigger part of our lives every year. As people spend more time on these devices, marketers will recalibrate their strategies. As more marketers target mobile devices, the competition will get more fierce. We are already seeing the effects of these cultural shifts. Cost-per-click was elevated from quarter-to-quarter, but mobile saw the most significant boost in cost.
Before we launch into our Q2 findings, let’s be clear: the bulk of our traffic still come from PCs, but mobile and tablets are becoming more important.
Let’s start with mobile, which saw increases of more than 65% in both spend % and CPC from Q1 to Q2:
Tablets, which are currently indivisible from computers in the Enhanced Campaigns roll-out, have seen only modest gains in spend % but — predictably — more increased CPC:
And with mobile rising, computer spend % is dropping (CPC is also on the rise, which will be an interesting trend to track into Q3):
Meteoric rise for PLAs
The revolution of sorts happening via devices is mirrored in a big shift in ad formats. Google is making a huge push for Product Listing Ads by devoting more SERP real estate to this ad format, and advertisers are reaping the benefits. We have seen huge dramatic growth in our PLA activities, as evidenced by data pulled from a major client. Impressions, clicks, and sales have all increased in Q2, and CPC has plummeted as marketers learn and adopt best practices:
What comes next?
As SEMs are (all too well) aware, Enhanced Campaigns roll out to all marketers on Monday, which should only accelerate mobile’s growth. And with PLAs proving effective — and cost-effective — the SERP land-grab should only become more pronounced.