Adobe Digital Index/ Branding & Communications Updates that Mobile SEM growth is on the rise

ADI - Adobe Digital Index & Branding & Communications Updates



Paid search growth momentum is slowing, according to Adobe Digital Index’s (ADI) “Q4 2015 Digital Advertising Report.” Global growth is down 75% year over year (YoY), which can be partially attributed to advertisers’ new willingness to spend on mobile search. 

n the fourth quarter of 2014, search engine marketing (SEM) saw a growth rate of 12% YoY. A year later (Q4 2015), that growth rate slipped to 3%. When breaking that down into North America vs. Europe, the largest declines took place in Europe—Q4 2014 SEM growth rate was 17%, while in Q4 2015 the European growth rate slipped to 5%.

Adobe Digital Index/ Branding & Communications Updates that Mobile SEM growth is on the rise
Image Credits : cmo.com
“Search growth momentum has slowed down, but it's not necessarily that paid search as a channel is shrinking year over year. It's just that the growth itself is slowing down,” said Becky Tasker, managing analyst at ADI. “On the other hand, we’re seeing that more money is being spent on mobile paid search than ever before. As a result, that’s generating more traffic.”

Mobile Search Wins

Advertisers are drawn to mobile because of the high content consumption levels on mobile devices, Tasker said. Also attractive is that mobile cost per click is less than desktop cost per click.
According to ADI, mobile spend is now 37% of all SEM spend (up 23% YoY). The gap between consumer behavior and advertiser spend looks as if it is starting to shrink as well, since mobile browsing accounts for 41% of all site visits.

“The percentages are really close, which indicates to me that advertisers are becoming more aware of what consumers are doing, and they’re trying to align their marketing efforts accordingly,” Tasker said.
ADI’s analysis also found that smartphones are knocking it out of the park in terms of growth. Smartphones contributed most of the mobile growth in Q4 (up 51% YoY), while tablet share continued to shrink (down 9% YoY). Advertisers are also seeing more traffic as a result of their mobile SEM efforts, with clicks up 35% YoY.
Adobe Digital Index/ Branding & Communications Updates that Mobile SEM growth is on the rise
Image Credits : cmo.com
“The caveat here is that a mobile click doesn’t convert as well once a consumer is on the website,” Tasker said. “So marketers should be aware that there’s going to be a gap between traffic and conversion, which means they have to think about how to optimize that.”

ADI also found that mobile search spend was shifting toward product listing ads (PLAs) in Q4, most likely based on holiday activity. This kind of shift happens every year, Tasker said. Overall, PLA spend grew 37%, which is much lower than the numbers reported in previous ADI reports.
Adobe Digital Index/ Branding & Communications Updates that Mobile SEM growth is on the rise
Image Credits : cmo.com

Display Advertising

In the display portion of its analysis, ADI compares the Facebook News Feed with Google’s Display Ad Network. The key finding is that Google is starting to close the display gap with Facebook.
In Q3 2015, Facebook’s CTR for display ads took off. They are still growing YoY, up 36% as a result of some of the changes Facebook has made. Google, on the other hand, was a little late to the game in optimizing its display ad network, but its CTRs are also increasing rather significantly YoY (27%).
Adobe Digital Index/ Branding & Communications Updates that Mobile SEM growth is on the rise
Image Credits : cmo.com
“This is primarily driven by contextual placement for display, auto conversion of text to image ads, and audience insights,” Tasker said. “What's happening now is that Google is catching up to Facebook in terms of growth rate.”
Google’s rate is up 219% quarter over quarter, while Facebook is up 77%. Tasker said it will be interesting to see whether Google catches up with Facebook or whether either platform does something else to widen or narrow the gap.
Overall, ADI found, display costs rose, with CPMs up 6% YoY. CTRs, however, improved by 22% but are still low, according to ADI.
Adobe Digital Index/ Branding & Communications Updates that Mobile SEM growth is on the rise
Image Credits : cmo.com
“It looks as if marketers are willing to spend more for better results, and they’re starting to optimize their ads,” Tasker said. “I’ll be interested to see if a shift from paid search to display occurs if these costs go up or if advertisers start working on optimizing their click-through rates.”

Holiday Insight

ADI also looked at search’s and display’s contributions to holiday revenue. Data revealed that nearly $1 out of every $3 in revenue came from one of those two channels.
During Thanksgiving weekend (Nov. 26 to 30), paid search brought in 10% more revenue than did direct traffic to websites, thus earning more. It also grew faster in terms of revenue growth than did direct traffic. Paid search was at 46%, while direct traffic was at 34%. CPCs for the holiday season were high overall. Smartphone CPCs peaked on Black Friday (a high-volume mobile shopping day), whereas desktop CPCs peaked on Cyber Monday.
Adobe Digital Index/ Branding & Communications Updates that Mobile SEM growth is on the rise
Image Credits : cmo.com
Looking at other channels, the winners that increased their share of sales are email, jumping from 14% to 15%, and display, increasing from 1.7% to 2.5%.

“What we are seeing here is a shift out of generic or broad-based marketing channels into channels such as email or display, which are really personalized nowadays, as advertisers increasingly cultivate a one-on-one relationship with consumers,” Tasker said. “I expect advertisers will start to allocate more budget to more personalized channels in the year to come.”

Original Source -  http://www.cmo.com/articles/2016/1/28/adi-q4-2015-digital-advertising-report.html?scid=social57748576&adbid=UPDATE-c3509272-6098821857081856000&adbpl=li&adbpr=3509272
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