Paid search CPCs in the US were around 50% cheaper on smartphone than on desktop in Q3, according to data from The Search Agency.
CPCs on smartphones stood at 31 cents compared to 49 cents on tablet and 59 cents on desktop, meaning the level of discount offered on smartphone is roughly the same as Q3 2011.
This is despite the fact that smartphone ads apparently have a much higher CTR than both computers and tablets.
The Search Agency’s report, which is based on client data from search engine advertising tools, shows that smartphone CTR has increased from 4.48% in Q3 2011 to 5.71% in Q3 2012.
In contrast, CTR on desktop and tablet has remained relatively flat around 2.3% and 3.6% respectively.
The report also highlights the increase in click share for mobile devices.
During Q3 2012 smartphones and tablets accounted for 22% of all click traffic - a considerable increase from about 10% of all click traffic in Q3 2011.
Smartphones have seen a 50% increase in click share year-on-year, moving from 8.23%to 13.32%, while tablet click share has increased by 339%, albeit from a much lower base of 2.6% up to 9.1%.
The comparatively high CTR and low cost of smartphone CPCs presents a good opportunity for advertisers, and stats from IgnitionOne show that the dollars have begun to pour into mobile search.
Spending on smartphones and tablets increased 333% in Q2 2012 compared to the same period in 2011. Overall, mobile search made up 14% of total search advertising spend in Q2, up slightly from 12.3% in Q1.
But despite the boom in mobile search, we have found that brands are failing to take advantage of the opportunity.
Looking at the PPC results for the top three search terms in the UK, only six out of the 15 paid search results linked to mobile sites.
This is a huge missed opportunity for these brands, and means some of the money they have spent on securing prominent positions in paid search is potentially going to waste as they have failed to account for the mobile searcher.
Reader comments (6)
10:09AM on 31st October 2012
Do you have anything on conversion levels for mobile traffic? We're finding it tends to be lower...
5:16PM on 31st October 2012
As asked previously, what about conversion rates? There are many factors at play with mobile and any kind of form/checkout, but an idea of the current state of play would be really useful.
Digital Marketing Executive at Koozai Ltd
5:24PM on 31st October 2012
I can see why this is the case as users are less inclined to scroll through the SERPS and therefore more likely to have a higher CTR. The conversion rates would be lower as its unlikely that all mobile campaigns have dedicated mobile landing pages that are optimised to fit the screen and be easy to create a conversion.
The real question is where Google and Siri are using API's to generate search results directly or predicting a users search habits when will a user be exposed to an Ad? They won't need to use the traditional search pages and then won't even see them.
I'm sure this has been considered as it seems to be the direction mobiles and mobile search is heading.
7:10PM on 31st October 2012
Did Google's stock price just jump on this news? Maybe not...
If a user is standing in Target, perhaps they are more likely to click on Walmart's easily accessible paid ad for a quick price comparison, even though, there is little to no chance of a conversion.
I'm not convinced conversion rate is as important with mobile as with desktop; Walmart would gladly pay for the click described above, even though there is little to no chance of an immediate online conversion.
11:44AM on 1st November 2012
Interesting article, but I agree with Chris that you would see a decrease in mobile conversion rates along with the increase in CTR - particularly where ads lead to non-responsive/mobile-unfriendly landing pages. I'd be really interested to see the conversion and bounce rates for these non-responsive/mobile-unfriendly landing pages, as well as which industries have the most success in mobile cpc.
1:59PM on 1st November 2012
Easy to explain. Small screen, sausage fingers.
The amount of times I have tried to close a pop up or inadvertently 'clicked through' on a banner/ad is laughable. I would say it might be a similar problem on tablets. It's an issue that doesn't occur on a desktop. I think the conversion rates that others have requested may substantiate my Sherlock Holmes type theory. PS: I have quite slim fingers, not at all like 100% Lincolnshire beauties.
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