Report: Paid Search Offers Results, Especially on Mobile, at Time of Ad Saturation

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A new report from AI-driven search marketing firm Adthena, based on data from January 2017 to May 2018, shows evidence that paid search is a valuable beacon of light in the darkness that is consumer “banner blindness, ad fatigue, and near saturation of consumers’ digital ad experiences.” The report analyzes more than 140 million paid search ads, 135,000 advertisers, and 5.6 million search terms from Adthena’s proprietary dataset.

Mobile device targeting is still on the rise. In 2017, mobile ad spend exceeded desktop ad spend for the first time ever. Search engine results pages are more competitive—the number of advertisers competing for a first page ad position increased more than 13% last year—and there is steady growth in paid search ads in the U.S., the U.K., and Australia.

“As the SERP becomes ever more competitive, it becomes increasingly challenging for brands to maintain margins and ensure healthy ROAS,” says Ashley Fletcher, VP of marketing at Adthena, in the report. “Advertisers in search require reliable competitive intelligence that can propel search performance and help shape a brand’s digital strategy. A data-driven approach that provides search teams with actionable insights is key, and ensures that ad spend investment drives real results.”

One reason mobile paid search is generating better click-through-rates (CTRs) is because most mobile devices don’t have ad blockers, the report suggests, and advertisers are increasingly focusing on mobile in categories that report high cost-per-click (CPC), including finance and automotive.

“Such advertisers may be able to generate better return on ad spend with search ads that are optimized for mobile devices,” the report states. “Pure brand ads on mobile perform exceptionally well, with average CTRs over 4.14% higher than the industry average.”

Some paid search ads are employing new techniques that seek to improve the relevance of consumers’ ad experiences, which increase CTRs as they streamline online user experiences, and get consumers to the answers and products they are seeking faster.”

In the U.S., data for the home and garden category shows the lowest CPC, with apparel and sports and fitness following closely behind.

Automotive also sees better-than-average CTRs everywhere except for pure brand desktop ads, which is only slightly below average at -0.18% – but this category also has the highest CPC for pure brands on desktop and mobile. At the other end of the spectrum, apparel and consumer electronics have CTRs below the industry average in all segments, which may be attributed to more competitors.

Based on the data analyzed, the travel industry may have the best chance of expanding search term coverage to continue growing its already above-average CTRs. Average CTRs for travel and tourism exceed the industry average by more than 2% in all segments, according to the report.

“One interesting observation was how Travel CTRs performed well above average on generics in both the UK and Australia. This is a category that is currently undergoing significant development in the SERP, with the rolling out of [Google] Hotel Ads in February 2018,” the report states. “Further research is required to determine if this is driving above average CTRs.”

The report suggests that advertisers still have an incentive to continue innovating campaigns, testing new channels and methods and using new technologies to quantify results.

April Nowicki is a staff writer at Street Fight.