Google Tablet CPCs Rise 1.7% Above Desktop For First Time [The Search Agency Report]

The Search Agency issued its Q2 State of Paid Search report today, finding that overall impressions were up 19.2 percent across all search engines quarter-over-quarter (QoQ), while overall clicks declined 7.8 percent. Cost-per-click (CPC) rose across all devices.
This marks the first quarter The Search Agency has seen tablet CPCs outpace those of desktops on Google. Tablet CPCs rose 26 percent QoQ, coming in 1.7 percent higher than desktops.

Overall tablet clicks dropped 8 percent QoQ. Year-over-year, however, tablet clicks were up 62 percent. Bing continued it growth on tablets, increasing its share of clicks from 8.7 percent in Q1 to 10.9 percent in Q2.
Smartphone were the only device segment to see an increase in clicks QoQ, with a slight uptick of 1.6%. Smartphone ad spend leaped 25 percent for the quarter.
CPCs Rise Across Search Engines
Overall cost-per-click increased 17.3 percent QoQ and 10 percent YoY.
On Google, CPCs showed an increase across every type of device QoQ,  with the largest increase coming on tablets at 26 percent. Bing’s average CPC increased 18.9 percent YoY and remained relatively flat QoQ.

The Impact Of Enhanced Campaigns 

While reports from RKG and Covario concluded that enhanced campaigns have had little impact so far on CPCs, The Search Agency finds otherwise. The report says, “The rise in marketplace competition caused a spike in CPCs during Q2″.
The report also suggests that enhanced campaigns played a role in the relative decline in clicks QoQ compared to impressions: Declining CTR “may indicate a shift in matching or query mapping changes at the search engine level.” Google impressions rose 21.4 percent while clicks fell off 7.1 percent QoQ.
CTR dropped sharply in Google from last quarter — from 3.46 percent to 2.66 percent. However, it looks more like there was a spike in Q1.

Though less dramatic, Bing also saw click declines. Bing impressions rose 15.6 percent while clicks dropped 4.1 percent QoQ. Bing also saw an increase in CTR in Q1 and dropped back closer to Q4 levels last quarter.
Overall CTRs fell across devices in Q2. Desktop was off 22.6 percent QoQ, though just 3.9 percent YoY. Smartphone CTR fell 18.6 percent QoQ and 16.5 percent YoY. And Tablets saw the biggest QoQ drop, falling 21.1 percent, and 15.1 percent YoY.
Desktop Losing Share of Spend 
The Search Agency found desktop share of spend continued to fall, coming under 75 percent for the first time this quarter. Desktop 74.5 percent share of spend marks a 12.5 percent drop YoY and 2.5 percent dip QoQ.
Smartphone share of spend has risen 70.4 percent YoY and 12 percent QoQ. While tablets have increased their share of spend by 74.7 percent YOY and 4.2 percent QoQ.

Mobile Efficiencies Still High On Bing

While Google CPC efficiencies compared to desktop are falling for both smartphones (11.3 percent down from 14.1 percent in Q1) and tablets (now 1.7 percent higher than desktops), there are still sizeable discounts on Bing. Bing smartphone CPCs were 28.3 percent lower than desktop in Q2 (way up from 16 percent in Q1), and Bing tablet CPCs are off 7.7 percent compared to desktops. That’s up from 5.2 percent in Q1.
The Search Agency sees device adoption on Bing continuing to grow and suggests there is a particularly strong opportunity to add tablet campaign on Bing. Overall they suggest adopting a consistent mobile strategy to better understand consumer search behavior and increasing clickshare on tablets and smartphones.

Surviving Google AdWords’ New Enhanced Campaigns

In "Cheaper Clicks from AdWords Coming?,"From a article from Feb. 2012, Someone questioned whether the then unprecedented decline in cost-per-click rates would be a blip or a trend. One year later, Google apparently thinks it's a trend, as Google is requiring all advertisers to adopt its new Enhanced Campaigns.
This will likely reverse the decline in CPC rates that resulted from increased adoption of smartphones and tablets, when advertisers expected lower conversion rates from mobile traffic, and bid down their mobile campaigns. With the new rollout you will still be able to bid down mobile phone clicks, but the way you do that will be much different. If you don’t properly migrate, you’ll be automatically opted into mobile campaigns — paying higher rates — and that could significantly impact the profitability of your campaigns.
To be clear, Google’s transition to Enhanced Campaigns is an important evolution in AdWords, and confers many benefits. It’s important that you prepare for this transition, however, or it could jeopardize the profitability of your campaigns.
Five important changes you should prepare for are as follows.

1. No Segmenting for Tablets

In the past, you’ve been able to segment different campaigns for tablet users and traditional computer users. But now you will no longer be able to. The reason this matters is that many merchants bid their tablet CPCs lower or higher depending on their rate of conversion from tablet users. Since you won’t be able to target unique bids to tablet users, you’ll need to factor this conversion rate impact into your overall bid strategy, which may require you to make significant changes to your bids.

2. No Mobile-only Campaigns

In the past, you’ve been able to create mobile-only campaigns — i.e. smartphones — that target specific keywords, and you’ve been able to adjust bids for individual keywords based on performance. After Enhanced Campaigns rolls out, however, you will have less control. You will have to adjust your smartphone CPC rates, on the campaign rather than the keyword level, by creating “mobile bid adjustments.”
This screenshot shows how the campaign level bid adjustments looks for mobile devices. In this case we’re setting the mobile bid adjustment to 20 percent. In other words, if you are bidding $1 per click on desktops/tablets, your bid for smartphones will be reduced 20 percent to $0.80.

Campaign level bids will need to be adjusted for mobile devices.

3. Campaigns Automatically Opted-in to Mobile

This is perhaps the biggest reason to take control of your migration to Enhanced Campaigns, by following prompts Google will display inside your account, like the one below.

Campaigns will automatically be upgraded to Enhanced.
If Google automatically upgrades you to Enhanced Campaigns, than your campaigns will automatically be opted into Google's mobile network, and you will be paying higher rates for mobile clicks than might be profitable for you. This has the potential to hurt a lot of small businesses who don’t know any better.
The right time to migrate may not be now, however. Once you migrate you cannot revert. If your campaigns are already designated by device, you may want to wait a few months and migrate immediately before the forced upgrade takes place. Companies operating smaller campaigns that just target searches from traditional computers, however, can migrate to Enhanced Campaigns as soon as they’d like.

4. Sitelinks Now Available at the Ad Group Level

In the past, Sitelinks — i.e., additional links below the main body of the pay-per-click ad — could only be setup at the Campaign level. But now they can be setup at the Ad Group level. To understand why this is important, consider the example of an online retailer bidding on the phrase “baseball cleats.” In the screen shot below, you’ll see the advertiser has Sitelinks set up — advertising “Name Brands Up To 80% Off,” “Gift Cards,” “New Arrivals,” and “Baseball Bats.”

Sitelinks can now be set up at the Ad Group level. In this example, Sitelinks are "Name Brands Up To 80% Off Every Day - Gift Cards - New Arrivals - Baseball Bats."
The reason these Sitelinks are so unspecific is that you can only set Sitelinks up at the Campaign level, which means the advertisers had to select generic Sitelinks that applied not only to, say, baseball cleats, but myriad related concepts. Now that Sitelinks can be set at the Ad Group level, the Sitelinks could be more targeted to concepts like “Popular Cleats,” “Clearance Cleats,” or “Nike Cleats.” This will result in a more effective and more profitable ads.
The screen shot below shows the interface for creating a Sitelink, and how they can be automatically adjusted based on the time of day, or day of week. You can also set a mobile preference to target specific Sitelinks to mobile users.

Google's interface for managing Sitelinks.

5. Offer Extensions Now Available at the Ad Group Level

This screenshot details the offer extension interface, which allows you to highlight time-sensitive offers directly within your ads. For example, if your conversion rates on “Baseball cleats,” plummet over the weekend, you can schedule special sales for Saturday and Sunday that will automatically stop on Monday.

The offer extension interface.

Conclusion

I talk with many online retailers who spend thousands of dollars per month on AdWords, and less than two hours per month on the management of those campaigns. Enhanced Campaigns is likely only one of many major changes Google will make to AdWords this year. Retailers who do not continually optimize their campaigns — in light of the changes — will incur higher costs. In the case of Enhanced Campaigns, in particular, there is a big cost to ignoring the upgrade.

Tablet Growth Encouraging for Mobile Marketers

Looking at 2013, mobile ad network Jumptap expects tablets to make up nearly a third of mobile devices, and iOS and Android operating systems to completely overpower RIM.
In its February MobileSTAT report, Jumptap reported that in 2012, feature phones still made up 4% of the market share, while smartphones made up 78% share and tablets saw 18%. But looking to 2013, Jumptap forecasts that tablet market share will increase to 29%, with smartphones’s share dropping to 70%, and feature phones coming in at only 2% of devices.


“We think smartphones and tablets can both grow in parallel at the same time, because they perform different functions,” said Matt Duffy, VP of marketing at Jumptap, highlighting how consumers turn to tablets more at night and in lieu of their PCs. Marketers must include tablet advertising and outreach as part of their strategies, he emphasized, even as most tablet owners are more tech-savvy and already own smartphones.
“There is a lot of value with hitting a consumer with a message on their smartphone, but also sending the same message or a follow-up message on their tablet,” Duffy told AdExchanger. “There is a lot of value in at least knowing how much you’re reaching the same consumer on multiple devices.”
In the rest of the report, Jumptap also predicted that iOS and Android will account for 96% of operating system market share in 2013, leaving RIM at 2%.

Samsung continues to be the leader when it comes to Android devices, with its market share rising to 56% from 42% in 2011, and continuing to grow in 2013. Jumptap notes that advertisers hoping to make the most of mobile outreach should not only focus on both iOS and Android operating systems, but also expect that most Android users will be accessing their content via Samsung devices.