Paid Search Sees Growth in Q4 2013

Jan 21, 2014 1:26 PM  By

The fourth quarter of 2013 saw growth for paid search according to two separate reports by Kenshoo and Covario.

In the U.S., the holiday shopping season saw an increase in retail transactions of 26% and U.S. retail revenue from paid search increased during the most important shopping days, rising 34% on Thanksgiving and 24% on Black Friday, according to Kenshoo.

Mobile devices accounted for one of every three paid search clicks, which was up nearly 28% year-over-year, according to Kenshoo.

Kenshoo found that increased efficiency led to a 25% year-over-year increase in click-through-rate globally.

Other findings among the report found that marketers spent more globally in Q4 than any other quarter on record, increasing spending by 19% year-over-year and 29% quarter-over-quarter, according to by Kenshoo.

On a global level in Q4, cost-per-click increased 6% year-over-year and clicks increased 12% year-over-year while impressions decreased 10% year-over-year, according to Kenshoo.

In the Americas in Q4, paid search spend increased 18% year-over-year, cost-per-click increased 2% year-over-year, clicks increased year-over-year and impressions decreased 12% year-over-year, according to Kenshoo.

The report found, with an average global click-through rate of 2.33% and an average global conversion rate of 4.07%, retailers saw a 6-to-1 return on ad spend for the season, according to Kenshoo.

Kenshoo found that global retailers spend 138% more year-over-year on product listing ads, achieving return on ad spend for the season.

Clicks increased 13% year-over-year, leading to a 4% lift in online sales revenue and 21% increase in conversions, according to Kenshoo.

Covario, an independent search marketing firm, reported that global search advertising finished strong in 2013. Globally, mobile search advertising grew 23% in the fourth quarter compared to the third quarter and 55% year-over-year particularly with the Android and Apple iPhone/iPad activations.

This now represents 20% of total search spending worldwide.  The mobile ad spend breakdown widened in the fourth quarter to 34% for smartphones and 66% for tablets.

Covario found that in Q4 spending on pay-per-click advertising by its global technology, consumer electronics and retail clients rose 13% from the third quarter and 7% year-over-year.

Paid search advertising on mobile devices continues to be strong as spending grew 23% over the third quarter and 55% over the fourth quarter in 2012, according to Covario.

While the fourth quarter keyword pricing declined compared to the previous quarter, the average cost-per-click increased 10% versus the same period last year, according to Covario.

On a regional basis, fourth quarter spending in the Americas was up 17% quarter-on-quarter and 9% year-over-year, according to Covario.

Europe, the Middle East and Africa experienced a weaker overall search spend in the fourth quarter due to a front loaded 2013 budgets and an overall decline in costs-per-clicks, according to Covario.

According to Covario, quarter-over-quarter spending in the region declined 1%, while year-on-year spending was down 8%.

While 91% of all search spend in Europe, the Middle East and Africa is with Google, according to Alex Funk, director of global paid media strategy at Covario, the largest growth in the region is with Yandex in Russia and Eastern Countries where it represents 7% of total Europe, Middle East and Africa  paid search budgets.

Quarterly search spending in Asia/Pacific Region grew by 5% over the third quarter and by 21% year-on-year, according to the release.  Funk said this annual growth was driven by a 13% increase in click-through-rates and a 20% increase in click traffic.

Funk found that Chinese search engine Baidu captured 20% of the fourth quarter Asia/Pacific Region search budgets, with 75% going to Google and 3% to South Korea-based  Naver.

Baidu’s industry low cost-per-click 80% less than Google, higher than click-through-rates and sustained investment combined to generate 55% of all clicks in Asia/Pacific Region.

Google continues to dominate 84% of the world’s paid search market share.  Advertiser increases in the fourth quarter spending with Google were up 7% from the same period a year ago.

The Yahoo-Bing network, which holds 8% of the global paid search spend market share, saw a year-over-year quarterly spending growth of 27%, along with a 6% percent gain from the third quarter.