Mar 112011

Google Mobile CPC: 41% Lower than Desktop

Mobile paid search goals can vary significantly across advertisers with strategies ranging from branding to online ROI focused.  As such, mobile cost per click relative to desktop can also vary greatly from advertiser to advertiser.  Because of mobile's more limited ad real estate, with generally only a few ads being displayed, mobile CPCs in aggregate are also biased by the type of keywords that are most likely to achieve traffic, specifically, ads in high positions with high bids.

With that in mind, we wanted to get a truer sense of Google mobile CPC compared to desktop by eliminating as many variables as possible that could affect the aggregate view.  The simplest way to do this is by starting with search campaigns that are opted into showing ads on both desktop and mobile devices with full browsers.  The keywords in these campaigns have the same bids, copy and landing pages*.  We also restricted the list of campaigns to those showing on only to eliminate skewing effects of the Search Network.

From there we looked only at keywords on exact match to eliminate broad matching effects and compared mobile CPCs to desktop CPCs for the same keywords.  We found that mobile CPCs are a median 41% lower than desktop CPCs for the same term with the same bid, copy, matchtype, network targeting and landing page.   These results were quite consistent across a sample of clients with the standard deviation at 5%.

Given that the directly measurable value of mobile traffic to the advertiser is considerably lower than that of desktop, this was encouraging to see.  Even so, for advertisers steering their mobile efforts by directly measurable online ROI, this is not a large enough drop in CPC to keep mobile efficiency in line with desktop, given mobile sales per click rates of roughly 10-20% of that of desktop.  For those advertisers, our previous recommendations to parse out and bid mobile separately from desktop still stand.

Why are mobile CPCs so much lower than desktop with all else being equal?  There are a few potentially contributing factors:

  • Lower competition:  Again, we are looking at cases where our mobile bid is the same as our desktop bid, but if other competitors in these auctions have lowered their mobile bids due to the lower online conversion rates seen for mobile, it would clearly drive down CPC.
  • Higher Quality Scores:  According to Google, QS is calculated the same way for mobile and desktop so having a higher click through rate for mobile would seemingly drive down CPC.  But, we also hear that for keywords targeting both, they are not making a distinction between the two, so for this analysis, QS differences should not be a factor.  Supporting this, we do not see much if any correlation between mobile click through rate relative to desktop and mobile CPC relative to desktop.
  • Speculative Reasons:  Google may not be applying the same minimum promoted bid threshold, which serves as an artificial competitor on desktop searches and drives up CPCs.  It's also possible that Google is applying a form of smart pricing to mobile given its lower online conversion potential, but that is purely speculative.

As always, your results may vary and we can certainly imagine cases and verticals where the data is likely to look different.  Still, it appears that a mobile click is significantly less valuable to Google than the same desktop click.  With mobile growing very rapidly, expect a heavy push from the engines to consider alternative performance indicators for valuing mobile.  Given the tracking difficulties of connecting mobile research to online purchase, that's not a bad idea.

*In a number of cases, desktop pages redirect to a mobile page of similar specificity, but this should not materially impact the results since a QS distinction is not being made by device.


8 Responses to "Google Mobile CPC: 41% Lower than Desktop"
John Shea says:
Great post Mark. Re: speculation Google does smart price mobile ad clicks on high end mobile devices when they are served from a hybrid (mobile + desktop) campaign. The Smart Pricing does not apply when you segment out mobile ads with mobile-only campaigns as the system assumes bids in those campaigns are appropriately calibrated to mobile VPCs. This of course only makes your recommendation to manage mobile PPC distinctly from desktop even more relevant and useful for value-bidders. Let's hope those mobile VPCs catch up to desktop very soon. Please keep the great insights coming Mark! Be well, - John
Mark Ballard says:
Thanks John. What wasn't clear to me was whether smart pricing applied to mobile just for being mobile or if it only applies to the quality of the network traffic. Are you able to confirm either way?
John Shea says:
Yes. Sorry that was unclear... The above applies to the traffic segment you defined: "search campaigns that are opted into showing ads on both desktop and mobile devices with full browsers.... restricted... to those showing on only to eliminate skewing effects of the Search Network." In other words, If you have a search campaign that exclusively targets and serves to both full-browser mobile devices and desktop/laptop devices, Google may smart price your CPC bids for the mobile auctions. - John


Check out what others are saying...
[...] Google Mobile CPC: 41% Lower than Desktop, Rimm Kaufman [...]
[...] Google Mobile CPC: 41% Lower than Desktop – Rimm-Kaufman Group [...]
[...] mobile is only 10-20% of that for desktop.  This puts downward pressure on CPCs, which are already 41% lower than desktop for a keyword with identical [...]
[...] cheaper for marketers than their desktop counterparts — as much as 40-percent less, according to research last year by the Rimm-Kaufman [...]
[...] to Google, when mobile and desktop clicks are served from the same campaign, Google may apply smart pricing to lower the cost of the mobile [...]

Leave A Comment