In the world of paid search marketing, tools and trends are constantly evolving as the market becomes more complex. Before you can decide where and how to best focus your advertising spend, you need to have a good understanding of the current landscape. To help you navigate the changing times, we’ve identified four key paid search trends we believe will impact your paid search strategy, whether you’re ready or not.
1. Competition Continues
Paid search spend continues to grow. As far as paid search goes, it’s still the number one digital acquisition channel, accounting for 48% of total digital spend – $35 billion - in 2016, according to Forrester Research. And unlike other ads, growing click volume suggests customers still use them.
Google reported Q4 2016 growth of 19% overall spend and 20% increased click volume (CPCs remained flat). Google attributes much of the growth to Google Shopping (as they extend PLA’s to image search and YouTube) and mobile. Mobile ad inventory grew from adding third and fourth position text ads, expanded text ads and promoted places in Maps.
Image Source: Merkle Digital Marketing Report Q4 2016
Consumer behavior shifts away from Google. Not surprising, consumers are finding other ways to search and discover products and information.
Search competes for more share of budget as budgets shift to social and video. According to Forrester’s US Digital Marketing Forecast: 2016-2021 dollars will shift towards social media and online video.
And while paid search still owns a dominant share of digital marketing budgets, it’s projected to grow at a slower pace - 8% CAGR - while Forrester projects a 17% CAGR for Social Media Advertising and 18% CAGR for Video.
Takeaway: Paid search is still one of the most effective acquisition channels. And competition continues as spend and inventory grow. But search – like all things digital – continues to evolve. Marketers are rebalancing their strategy as mobile search overtakes desktop and consumers shift their modes of discovery to social channels, alternative search channels, and intelligent agents like Siri.
P.S. The next frontier? Voice search. There are 33M voice-first devices in circulation today…and growing. (4)
2. Mobile Moves Up. Now 60% of Online Searches.
It’s official—mobile has overtaken desktop in online search share, now accounting for 60% of total search volume. Interactive Advertising Bureau (IAB) reported paid search spending grew by $6 billion overall, driven by mobile as overall spending on desktop declined.
But conversion rates vary significantly by device. Google brought back device-level bidding in Q3, allowing advertisers to shift spend in Q4 from tablets to the better performing desktop segment.
As you can see from the chart above, conversion rates and value per click are considerably different between tablet and smartphone.
Takeaway: Mobile is a critical part of paid search campaigns but not all mobile is created equal. Device-level bidding makes it possible for search marketers to get more from their mobile investments.
7.ai Gives Mobile A Boost With High-Frequency Device-Level Bidding When Google announced device-level bidding, we were one of the first in line to take advantage of it. We enabled predictive high-frequency bidding on our platform at the device level making two things possible:
- The ability to predict the value-per-click per keyword and device based on real-time behavior
- The ability to adjust and adapt bids automatically up to 168x a day (versus 1-4 times with other tools).
A leading online retailer saw a 25% increase in tablet ROI with device level bidding from 7.ai. You can too, learn how.
3. Google Shopping Shines
Online retail is seeing a significant shift to Google Shopping, which can be attributed to the extension of product listing ads (PLAs) to Image Search, YouTube, and third-party retail sites. For retail advertisers, PLAs now drive nearly 48% of total Google paid search clicks, up considerably from their 34% share in Q4 2015.
PLA growth outpaces text ads. Click traffic from phones grew 62% Y/Y in Q4 2016.
Source: Merkle Digital Marketing Report Q4 2016
Takeaway: PLAs continue to perform and advertisers continue to invest in the channel that converts. But retailers that aren’t aggressively bidding around the clock aren’t maximizing their budgets by tapping into intra-day opportunities. Luckily, Predictive Search Bidding can help. Read 4 Ways Advertisers Can Win At Google Shopping
4. Audience Improvements
Google is getting serious about the importance of audiences. Focus has shifted from just intent targeting to audience + intent targeting. They’ve come a long way from traditional RLSA retargeting to 2015’s Customer Matching, which let you reach new customers by excluding current customers, to the forthcoming Similar Audiences capability. Similar Audiences is still in beta, but once launched it will help you reach new audiences that look like your target audience. Additional cross-device targeting and demographic modifiers such as age and gender allow you to pinpoint your audience and understand intent for even better results. The time to embrace deeper engagement is now.
Give paid search a boost In the increasingly competitive world of paid search, understanding, anticipating, and acting on complex consumer behavior is the key to optimizing bids, campaigns, and budgets.
To learn more about how to find the right solution for your needs, check out 6 Things to Look For in Bidding Optimization Solutions.
Your custom analysis delivers 5 key insights:
- How to optimize for shifts in hourly auction and conversion patterns
- How to tune bidding at the device level to give mobile a boost
- Opportunities for account expansion
- How to identify and target high-intent consumers
- How to grow and gain efficiencies in long-tail keywords
- IAB 2016 Revenue Report
- Forrester’s US Digital Marketing Forecast: 2016 to 2021:
- Forrester’s State of Search Marketing 2017
- IR Digital Marketing Report, 2017
- Merkle Q416 Digital Marketing Report