Apr 92013

RKG Digital Marketing Report: Q1 2013 Released

RKG released our Digital Marketing Report covering the first quarter of 2013 today.   We found consumers used tablets and smartphones to complete 25% of their online searches in Q1, a notable post-holiday uptick from the 20% level we observed for the previous quarter.

In order to reach this rapidly growing audience, advertisers increased their spending on tablet and smartphone search ads by a combined 171% on a year over year basis.  Tablet investment was up 162%, while smartphone spending increased 190%.

Desktop and Laptop Clicks Down, but Mobile Picks Up the Slack

For the first time, RKG found combined desktop and laptop search traffic declining year over year, with clicks down 0.7%.  However, as consumers have shifted their searches to tablets and smartphones, total click growth remained robust at 15%.  Overall, search spending increased 24% in Q1, with mobile cost-per-click continuing to close the gap with PCs.

Device Traffic Share Figures Highlight Benefits of Default Search Provider Agreements

While RKG found Google held a significant advantage over Bing Ads in the share of traffic each generated from mobile overall, Google’s 28% to 16% lead was not echoed consistently across devices.  Android phones generated 6% of total Google clicks, but just 1% of Bing clicks.

On the Kindle Fire, where Bing is the default search option, Bing generated twice the click share of Google.  Consumers showed reluctance to change the default search option on any device, as each search engine enjoyed a relative click share advantage on every device where it was the default.

Shoppers Using Tablets to Buy, But Not at Same Rates as Computers

With Google AdWords changing its campaign model this year and eliminating separate targeting of computers and tablets, RKG data suggests advertisers may face challenges maintaining their current levels of efficiency.

In Q1, tablets generated a 15% lower revenue per click than traditional computers.  As Android and other tablets have gained traffic share, they have also lowered the value of the tablet segment overall with revenue per click that is less than half that of the iPad.

Rapid iOS 6 Adoption Obscuring Organic Search Analytics

Utilizing paid search data, RKG found that iOS 6 accounted for 83% of Google search traffic from iOS devices at the end of the quarter.  With 75% of iOS 6 Google searches not passing a referrer due their defaulting to secure search, 13% of organic search queries appeared as direct site visits to popular analytics packages.

Newer Android devices also failed to pass referrers at relatively high rates, but the impact was far smaller, affecting less than 1% of Google organic searches.

The full RKG report offers over 40 charts with additional insights and analysis on paid search, search engine optimization, social media, comparison shopping engines, multi-channel attribution and more.

Among our published first quarter results, we found:

  • Google paid search ad spend was up 20% Y/Y in Q1, which was roughly in line with Q4 growth.  Ad click growth moderated, falling from 14% in Q4 to 11% in Q1, while CPCs continued their rebound, coming in 8% higher.
  • Bing Ads search spending increased 48% Y/Y as the engine continued to deliver strong impression growth on expanded keyword to query matching.  Ad clicks rose 44% while CPCs increased 2%.
  • Mobile drove 25% of paid clicks and 21% of spend in Q1.  Tablet CPCs eclipsed computers with spend increasing 162% Y/Y.  Smartphone CPCs also accelerated versus desktop with spend up 190%.
  • Mobile generated 28% of Google clicks, but just 16% of clicks for Bing Ads.  On devices where they were the default search provider, each engine held a relative advantage.

  • Product Listing Ads generated 33% of Google non-brand spend among RKG’s retail-leaning client sample.  PLA CPCs edged up relative to text ads.
  • iOS 6 devices did not pass a referrer on 75% of Google searches, resulting in 13% of Google organic searches being classified as direct by analytics packages.
  • Accounting for the iOS 6 issue, organic search traffic share was steady at 35%.
  • Mobile drove 24% of organic search visits in Q1, led by the iPad with 9% of visits, the iPhone at 8% and Android devices just under 7%.

  • Facebook sent 30X more visits than Google+ in Q1.  The entire social segment was still a small traffic referrer, sending just 2% of all site visits.
  • Facebook Exchange CPMs remained well below display averages, coming in 65% lower.  FBX click-through rates were 30% below average, but revenue per click was 17% higher.
  • Comparison Shopping spending increased 25% Y/Y in Q1, excluding costs associated with Google PLAs.

  • Shopping.com took share ahead of its rebranding as the eBay Commerce Network, generating 26% of CSE clicks and spend.


17 Responses to "RKG Digital Marketing Report: Q1 2013 Released"
Sandra Smith says:
Interesting set of data Mark. The piece of your report that stood out for me though was this: "The entire social segment was still a small traffic referrer, sending just 2% of all site visits." This pretty much confirms my own experience with social traffic in that most of the time it is a total waste of time. It is hard to see how Facebook can justify its valuation in the face of statistics like this.
Brad says:
I'm really surprised to see that windows tablet produces so much more ROI than the ipad.
Brad, the degree to which Windows tablets are outperforming other devices surprised me as well. It's still a very small segment of traffic, but there was a high degree of consistency in those results from site to site. Sandra, there's a good case to be made that the value of Facebook extends well beyond generating direct response revenues, but for that purpose, it does appear that it's still more about the potential than the current impact.
Some interesting data. It's interesting to see the click through rates (CTR) for the different devices. However, without additional metrics on conversions and average order value (AOV), I not sure how much of this can really be utilized to form a a strategy of engagement, budget allocation, etc.
Brad, I suspect this is an "early adopter" phenomena. When iPads first rolled out the Revenue per Click was MUCH higher than desktop. That's changed over time and become more in line. The people who buy the latest thing tend to be high income folks who pay the high prices to be the first kid on the block with the new toy. I bet this will normalize over time.
Robert, just to clarify, the report includes both traffic share figures and relative conversion performance (revenue per click) for the most popular devices. I'd recommend advertisers assess these figures for their own individual programs to determine the right strategy and budget allocation for them, but hopefully our results provide a good start.
Mika Sasaki says:
I remember that in Q4 2012 report, Amazon Product Ads were the largest traffic driver with 25% of CSE clicks. But in this Q1 2013 report, it was not. It seems Amazon Product Ads has less than 20% of CSE clicks in Q4 2012. Is there any change between this report and last one?
Hi Mark, For what seems like an eternity a friend has been banging on about how I am losing a fortune by not really bothering with social media at this point. This report totally justifies my decision... “The entire social segment was still a small traffic referrer, sending just 2% of all site visits.” I can't wait to see his face when he see's this!!! Thank you so much Mel
Great analysis, Mark! Given the difficulty with measuring cross-device interaction, are there any hypotheses around the lower RPC for phones being partly due to the inability to marry situations where users discover the product on their phone, but wait to buy with their iPad or computers? For instance, I'm on the train, I do a search for 'white blouse', click on an ad, discover a new company, and wait until I'm home to purchase on my computer, where it's easier to input credit card information. In this situation, I would assume you'd be unable to attribute that purchase to my click (it would probably go to a 'brand' search, or I'd just visit the site directly). While I do believe RPCs are lower on phones due to other reasons (the "fat fingers" syndrome, absent-minded browsing, etc), I'd also think that these numbers underestimate true RPCs, if you account for cross-device pollination. Has there been any thought into figuring out how to get past this hurdle, if possible? Chris
Hi Chris, thanks and good to hear from you! I agree that cross-device tracking would boost phone RPCs, but achieving a precise view of that behavior remains a challenge for advertisers. Google is probably best-suited to provide that type of insight, but they will have to tread lightly to avoid raising privacy concerns. I think we pointed this out more explicitly in our previous DMR, but advertisers are already spending more on smartphone traffic than the directly observed online revenue per click suggests they should, and we can view that as accounting for both cross-device and in-store purchases. Still, I think we'd all like to have a better handle on this.


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