Shift to Mobile and Eurozone Growth Fuel Search Spend on Global Scale | Street Fight

Shift to Mobile and Eurozone Growth Fuel Search Spend on Global Scale

Shift to Mobile and Eurozone Growth Fuel Search Spend on Global Scale

Global search spend increased by 11% year over year, according to digital marketing provider Marin Software’s Q1 2018 Digital Benchmark Report.

The study found that the increase in search ad spend has been spurred by higher cost-per-click rates, driven by mobile spending.

“If you look at mobile, there’s just a lot less real estate,” said Wes MacLaggan, senior vice president of marketing at Marin Software. “Being in the top two positions is increasingly important—that’s going to drive up prices.”

As publishers like Google and Facebook optimize their ad targeting, advertisers have also seen improved results, which can drive up prices, MacLaggan added.

Campaigns on Google Shopping represented over 30% of ad share spending across the globe, with the UK representing the highest share of that spend at 41%, versus 30% in the US.

Eurozone growth fueled a bump in search spend of 30% there, while in the UK it grew by 18%. Growth in the United States was in pace with global spend at 11%.

Spending grew most significantly in the healthcare industry, which posted 26% growth. Automotive industries saw a 21% increase in spending.

Even as the Eurozone led search spend growth, data privacy laws soon to be implemented in the region may create shifts in the advertising landscape there. In less than a month, the EU will introduce the General Data Protection Regulation, a law that MacLaggan said will reinforce Facebook and Google’s top positions in ad spending. “Growth in the industry is going to those two behemoths,” MacLaggan said.

From a systems perspective, small businesses will find it more difficult to gather consent from their users, said Brian Finnerty, director of marketing at Marin. Consumers may be more willing to opt-in to Facebook and Google’s data policies to maintain access to the companies’ now ubiquitous products.

Following criticism over Facebook’s influence on the 2016 U.S. election, the tech giant changed its algorithm to prioritize connections with friends over viral content. MacLaggan said that even as advertisers waited to see how the newly decluttered feed might impact them, his company didn’t see “anything drastic.”

Still, CPMs on social overall did decline from $3.14 in Q4 2017 to $3.08 in Q1 2018, while social CTR declined from 2.1% to 1.9%. MacLaggan warned, however, that this “may just be” representative of “annual cyclicality.”

Facebook and Google may also be the best-equipped to handle the ongoing transition toward mobile spending.

MacLaggan sees that growth continuing for at least the next several years, he said, especially as people become more comfortable with online transactions through Apple and Android Pay. Wearable devices and voice-driven technologies may also drive growth on mobile spending, he added.

For a preview of this tendency, look no further than Facebook, MacLaggan said. In its Q1 earnings released earlier this week, the company reported that 90% of its ad revenue now comes from mobile.

Even as mobile spend grows, tracking remains a challenge there, MacLaggan said. “It’s a little more fragmented when somebody searches on mobile.”

Looking at other key performance indicators, Marin’s report found that click-through rates increased 25% from 2017, as publishers continue to improve their ad targeting. While advertisers are more easily targeting certain ads to different demographics, MacLaggan said that advertisers still have room to grown when it comes to understanding ad performance based on geography.

Dynamic ad spending—in which publishers can personalize ad content to a user—was up 37 percent from last year, the report indicated.

The report aggregated data from advertisers active on Marin’s platform in the past five quarters to measure performance indicators and ad spend, breaking down stats by geography and industry.

Kate Talerico is a staff writer at Street Fight.